Oberlin Observer. 1997-08-29

              Faculty and StaffNotes
Offices Take On OPUS
INSIDE
2 Transitions 3
3 H.H.Kung and the $6 Million Gift 4
%e Volume 19, Number 1Obsewec29,1997
THE O B. E R L I N COLLEGE FACULTY AND STAFF NEWSPAPER
Trustees Approve
New Policy for
Endowment Spending
At its June 14 meeting the Oberlin Col¬
lege Board ofTrustees approved a new
endowment-spending policy to support
the annual operating budget ofthe Col¬
lege. The goals ofthe new policy are to:
• increase the value ofthe endowment
in real terms,
• protect the purchasing power of the
endowment from inflation,
• provide stable and predictable in¬
creases in spendinginreal terms, and
• maintain equity between current
and future generations who are ben¬
eficiaries ofendowment spending.
With the new policy annual spend¬
ing will increase at a constant percent¬
age that is related to an inflation index
such as the Higher Education Price
Index. The policy also provides for the
percentage increase to be constrained
by a "collar^'—upper and lowerlimits on
the spending as a percentage of a mov¬
ing average marketvalue ofthe endow¬
ment.
"The new endowment-spending for¬
mula will be a solid foundation for the
financial planning necessary to help
Oberlin cany out its mission success¬
fully," says Andy Evans, vice president
for finance. "Previously, the pay-out
rate could fluctuate based on market
conditions—even with a procedure
for smoothing year-to-year spending
fluctuations—creating unacceptable
swings in budget support. The new pol¬
icy allows for better planning by taking
a longer view. It asks, What can we af¬
ford to spend over the long term while
meeting our four goals?'"
The collar will insure that the en¬
dowment is not overspent during a pre¬
cipitous decline in the financial mar¬
kets (as occurred in the early 1970s) or
during sustained high rates ofinflation
(as happened in the late '70s and early
'80s), Evans says. The collar will also in¬
sure that the endowment is not under-
Trustee Meeting
spentwhenfavorable markets or an un¬
usual volume ofgifts affords opportuni¬
ty for faster growth in spending. Falling
below the established floor could penal¬
ize the current generation of endow¬
ment-spendingbeneficiaries to the ben¬
efit of future generations while
exceeding the established ceiling dur¬
ing periods of poor investment perfor¬
mance or abnormal inflation could pe¬
nalize future generations.
Evans and Robert Knight, financial
planning and budget director, led a
team effort to develop the new policy at
the request ofthe board, whohad asked
the administration to present an analy¬
sis and recommendation for a new rule
governing endowment spending. The
team—whose members came from the
finance office, the development office,
and the board—developed a model that
can be used to estimate the future im¬
pact of investment performance,
fimdraising, and spending on the size
and growth rate ofthe endowment.
The model shows the explicit link¬
age between the endowment-spending
formula and the annual budget, and
highlights the strategic role of the en¬
dowment in supporting the mission of
the College. The team's research sug¬
gested that a constant-growth policy
might be superior to other endowment-spending
formulas because it allows for
better long-term financial planning. At
the March 1997 board meeting mem¬
bers ofthe trustees' Investment, Devel¬
opment, and Budget and Finance com¬
mittees jointly reviewed the merits of
the proposal.
The rule went into effect this fiscal
year, which began July 1. To allow ade¬
quate time for thorough evaluation of
its effectiveness the new policy will re¬
main—barring extraordinary circum¬
stances—for at least five years, through
the fiscal year that ends June 30,2002.
Besides approving a new endowment-spending
policy (see story this page)
Oberlin's trustees welcomed new mem¬
bers Harry Stang and Myron Szold at
their June 14 meeting. On the occasion
of his retiring from the board, trustees
recognized Alan Wurtzel for his contri¬
butions to the College, especially on the
trustee Investment Committee. The
group heard memorial minutes for hon¬
orary trustees Bernard Gladieux and
Jewel Lafontant-Mankarious, both of
whom died in May.
The board gave President Nancy
Dye a standing ovation after accepting
the Broad Goals for Oberlin's Future,
the long-range-planning report that
was the result of the College commu-nit/
s widespread discussion last
school year.
New and returning students descended on the computer store this
week, and computing-center folks Chester Andrews, Reg Lyman,
Shelby Warrens, and Elliot Jolesch were there to make sure
everyone left happy.
Office of Communications Now
Office of College Relations;
New Functions Added
Don't look for the Office ofCommunica¬
tions in the 1997-98 Fussers—the office
has changedits nametothe Office ofCol¬
lege Relations. Don't look for the director
of communications in Fussers, either,
and especially don't look for him in the
yellow house at 153 West Lorain. Al
Moran, formerly the director ofcommu¬
nications, is now vice president for col¬
lege relations, and his new office is next
doorto the yellow house, in Daub House.
The changes are part ofa general re¬
structuring that goes with preparations
for the communications side ofthe capi¬
tal campaign, now in early planning
stages. Anne Paine, former publications
director, has moved over to Daub House
to take responsibility for capital-cam¬
paign publications, and Cynthia Nick-oloff,
editor ofthe OberlinAlumni Mag¬
azine (OAM), is taking over Paine's
former role with all other publications.
Nickoloff is in Daub House now, and
will move to the yellow house as soon as
a national search results in a new OAM
editor, who will be in Daub House. Yel¬
low-house resident Rick Sherlock, who
was the art director, is now assistant di¬
rector ofcollege relations.
Peter Nicholson '91 has returned to
the office as a public-relations specialist
covering the conservatory while a na¬
tional search seeks to replace Larry
Herman, who formerly directed conser¬
vatorypublic relations. Nicholsonwasthe
communications-office intern in 1991-92.
This is not the first time Oberlin has
had an Office of College Relations.
From the 1978-79 school year through
1983-84 the office used that name.
Other names the office has been called
include College Information, Public Re¬
lations Office, Publicity Bureau, and
News Bureau.
Poet Will Address OC Employees, Souls
Poet David Whyte says, "Institutions
must... honor the souls ofthe individ¬
uals who work for them." And he in¬
vites workers to "explore the possibility
ofbeing at home in the world, melding
soul life with work life "
Whyte will speak at Oberlin Tuesday,
September 9. Drawing on a topic he cov¬
ered in his book The HeartAroused: Poet¬
ry and the Preservation of the Soul in Cor¬
porate America, (source ofthe quotations
above) Whyte will give two hour-and-a-half
sessions to College employees, at 10.
and2.At8hewilltalkto the general Ober¬
lin audience about being connected to a
community, material drawn from his lat¬
estbookofpoetry, TheHouseof Belonging.
All sessions will be in Finney ChapeL
"Almost anybody can relate to his
messages," says William Stackman, as¬
sociate dean of student life. Manfred
Lassen, Protestant chaplain, calls
Whyte "very engaging" and "powerful."
What distinguishes Whyte favorably
from motivational speakers, says
Lassen, is that he recognizes that "life is
terrifying as well as beautiful." Stack-man
and Lassen were instrumental in
bringing Whyte to campus.
A videotape of one of his perfor¬
mances, to be shown at the September 4
breakfast forAdministrative andProfes¬
sional Staff, will giveA&PS employees a
preview ofWhyte's messages and style.
tc#The first issue of Oteriin Holm for the new school year came out Wednesday. If your building is out of paper copies, catch The information on line at www.oberlin.edu/~wwwcomm/onotes/CUR188UE/main.html.