Introduction:
In our investigation we found that Whittier College currently is losing money. Whittier College's deficit for 2022 was $7.3 million. On the surface this is a rather small sum for an institution used to dealing with higher numbers. The average deficit for the last 7 years has been $1.8 million. The majority of the deficit has been during Oubre's term as president of Whittier College and during most of that time it has been at least $7 million except the one year it was $8 million. However our analysis found that deficit might actually be higher in 2023 but we were not able to find out how much higher. Oubre has laid the blame exclusively on Covid 19 and what she alleges is a conspiracy of White Supremacy, claiming there was no racial diversity at Whittier before her arrival. We found this claim to be false. In point of fact, Whittier College was not founded by White Supremacists but was in fact founded by Quakers, a religious domination founded upon principles of equality and social justice and those were same principles upon which Whittier College was founded. We further found that Whittier College not only had more students prior to Oubre's tenure as president, but it also had three times as much diversity as it does now. We have heard from current students and on of the things they have been telling us is that there is actually less diversity on campus now than there was in 2012.
My only connection to Whittier College is that it was one out of 85 colleges across the US I had applied to back in the 90's. I ultimately picked another institution.
DEFICIT OF AT LEAST $2 MILLION BUT LIKELY A LITTLE MORE
While investigating Whittier College finances, we found Whittier College was operating with a $7.3 million deficit in 2022 and a likely bigger deficit this year. As you can see in the image below, for most of Linda Oubre's tenure, Whittier College has operated with a deficit of at least $7.3 million dollars and does not include 2021's $8 million surplus. This is not insurmountable. As you can see from the worksheet below, prior to Oubre's appointment tuition revenue at Whittier College had been increasing and it began declining after she took the position of President of Whittier College. Whittier College currently has assets valued at $294.3 million with liabilities of $64.7 million. Both assets and liabilities are currently the lowest they have been in at least the last 7 years, including two years prior to Oubre's appoint to the presidency. Gifts and pledges are pretty much flat and equal to what they were when Oubre first took office. However both total revenue and revenue from tuition and fees have declined drastically during the past 5 years of Oubre's leadership of Whittier College and as mentioned previously Whittier College has maintained an over $7 million dollar budget deficit throughout her career at Whittier College.
We also found that while Tuition was the main source of revenue in years past. The second and third sources of revenue for Whittier College in 2023 are government funds and auxiliary enterprises which would be things like charging students for housing. Investment income made up less than $1.2 million dollars of Whittier College revenue.
The college also received funds from endowments and other sources but none of it was enough to prevent this year's financial deficit.
Linda told multiple media outlets she was hired to be a change agent at Whittier College but former board members say otherwise. At a February rally at Penn Park earlier this year, former board member Vince Daigneault told attendees at the protest. "I had served on the board of trustees for 15 years. My term ended in May of 2019, so I was part of the board when Linda was hired. This is a public apology, very bluntly. In the interview process, the role of the president is to raise funds for the college. That's 75% of the job. We had infrastructure in place with senior administrators that would take care of the day-to-day of the college. As we were looking at Linda, the belief was that she would find alternative sources of funds for the college to take us to that next level. The science building was an aggressive project. It was the biggest building that the college had ever taken on, and it was with the intentions of attracting students and the job of the president was to raise money and the interview process, I presented the question to Linda or the statement to Linda that where I said our endowment in 2018 was 100 million. Your job is to increase that to 250 million in five years. That's the job, nothing else. And unfortunately as a board member relied too heavily on another board member that was an agent endorsing Linda. I did not do enough due diligence and I am apologizing for that." So Oubre's primary job was to go out and raise money for the college and she spent the last 5 years failing or refusing to do her job and chose instead to focus on stuff that was actually not part of her job as president of Whittier College. How do you get hired to a job where you don't even know what the primary role of the position you are applying for is??? "
A good question that readers ought to ask at this point is "what was the context behind Linda Oubre leaving San Francisco State University more than a month before applying for and being hired at Whittier College?" Her exit from SFSU appears to have happened under mysterious circumstances as there is no information available about the circumstances around it. Did the Board of Trustees talk to San Francisco State University before its decision to hire Linda Oubre? An employers when going through applicants is actually supposed to communicate with the applicants current and former employers in order to do due diligence and ensure they are not signing up for any potential issues by mistakenly hiring someone they otherwise would not. HR people from the different universities and even companies are supposed to be talking to each other about the applicants before them in order to get a fuller picture of those applicants.
There is also the matter of professors and food service workers complaining they are not only not being paid enough but that their departments have been largely defunded over the last few years. Just recently the employees of Whittier College contractor Bon Appetite held a strike that ended only a week or so ago and was reported on by mainstream media outlets such as the Whittier Daily News and LA Times but not by Whittier 360. This has been another factor in students choosing to avoid Whittier. Though we must point out that speculation of Whittier College closing has also been a major factor in deterring high school seniors from applying to Whittier College as many don't want to waste their time if Whittier is going to close as some have claimed. Many are concerned their degrees and classes won't have any value if the college does end up closing and that Whittier College classes may be non transferrable. This is an issue that the Whittier College admissions department could actually address by holding conversations with other colleges and universities in the area such as Cal State Fullerton, Biola, USC, and others to ensure that such classes are transferrable even in the event that Whittier were to shut down in a couple months, a prospect we found to be highly unlikely. In fact we found that Whittier College has enough liquidity to remain open for at least another full academic year and one semester. It is up to the new president and the new Board of Trustees to act now to ensure Whittier College can remain open beyond that.
On January 6th Whittier College posted to their Facebook page bragging that President Oubre had been featured in the magazine Diverse Issues In Higher Education which applauded her for increasing Pell Grants to low income students. The problem with the post is that it is the US government, not a college president that decides how much each college student gets in terms of Pell Grant money. We found the post misstated what happening with the Pell Grant. In fact the increase in the Pell Grant came from President Biden signing bipartisan congressional legislation that was supported by both Republicans and Democrats. The new law increased the Pell Grant to $7,395 per year per student and does not have to paid back. Oubre told the magazine, "We should understand that affordability is one of the biggest challenges facing higher education, now and into the future, as evidenced by increasing student loan debt." People on both sides of the political spectrum are in agreement that even this is not enough help for today's students. The main issue is that college costs, even at government run universities and colleges, is out of hand and out of touch with both inflation and the cost of living. The total amount owed by all students and former students in the US today is over 1.75 trillion dollars and economists we spoke to said that is the bubble that presents the second greatest threat to the US economy after the real estate bubble. Just imagine on how that can impact the economy if that 1.75 trillion dollar student loans debt defaulted and led to a collapse in the student loan market. Regrettably Oubre focused on students of color instead of the reality which is the problem impacts all students regardless of color or other background. White students after all are not doing any better financially speaking. https://www.diverseeducation.com/students/article/15305083/pell-grant-increase-will-help-lowincome-students-but-more-is-needed Maybe, the City of Whittier could provide some assistance as far as housing in exchange for Whittier College opening up at least one of its athletics fields for the community's youth athletics groups to use during times when the college is not using the field itself and perhaps the city could provide a small amount of compensation in exchange for such a deal.
The Save Whittier Group responded to Oubre's claim about disinvestment, “recent projections by Dr. Nathan Grawe, Professor of Economics and college enrollment expert, suggest typical Whittier markets in the western US will have a period of flat growth or slight decline, but the drop-off will be more of a plateau than a cliff. President Oubré shares national data which does show more of a cliff, but not in the local markets she wants to invest in. This feels disingenuous by picking data that serves her narrative when it suits her.
Comparing Financial Audits 2016 Through 2022
To see how Whittier College was really doing financially we compared assets, liabilities, tuition revenue, and Gifts and Pledges for the years from 2016 to 2022.
In 2016, Whittier College experienced a slight decline in student enrollment and hence the first decline in tuition revenue. 2016 was two years before Oubre became President of Whittier College in 2018. Prior to 2016 we found that both assets and liabilities as well as tution revenue had all been growing at Whittier College. Covid 19 would not hit until 2020, 4 years later.
https://www.whittier.edu/sites/default/files/media/businessoffice/WhittierCollege_Issued_FS_6_30_16.pdf
In 2017, assets, liabilities both decreased. But the biggest cut was to liabilities. Who ever was able to do that knew what they were doing. Current leadership should seek them out and ask them for advice. Tuition revenue and gifts also declined. In 2016 Whittier College had $92.8 million in tuition revenue and $3.1 million in gifts and pledges. In 2017 those had dropped to $90.8 million dollars in tuition revenue but gifts and pledges jumped to $3.4 million.
In 2018 we saw sharp decline in revenue for Whittier College. Tuition at this time dropped to 83.6 million from $90 million the previous year. Assets during 2018 were $299.6 million and liabilities were $75.4 million. Pledges and gifts dropped to $2.8 million. This would appear that there was a slight financial issue at Whittier College prior to Oubre's appointment as president of the college. She was appointed President of Whittier College in 2018. This was also the year the Whittier College's current financial deficit began. Revenues were $68.2 million which was a drop from 2017's $77.4 million. However the expenses paid by the college did not decline as much as revenue did and ended up at $75.4 million which created a deficit of $7.2 million where there had been a surplus just a year earlier.
According the 2019 independent auditor's report, Whittier College lost close to half of its tuition revenue in the year after Linda Oubre was selected to lead the college. Asset values continued their slight decline to $295.6 million while liabilities slipped to 73.7 million dollars. While there was no change in the amount of gifts and pledges, there was a sharp decline in the tuition revenue of the college. In 2018, Whittier College collected $83.6 million in revenue from tuition and fees. In 2019 that number had dropped to $44.4 million. Hence we believe the main problem with the decreasing revenue that was something that happened in or began in 2019.
2020 was the year of COVID 19 and the shut down of many colleges and universities in a mistaken and failed effort to stop the virus from spreading. Oubre and the Save Whittier College Group both said they believe the deficit began this year. According to our analysis of their financial documents, the deficit began before the Covid 19 shutdowns and hence could not have been caused by it but the shutdowns could have made the deficit even worse than it already was. Despite the shutdown however, revenue from tuition payments experienced only a slight decline to $41.6 million while gifts and pledges were at $1.9 million dollars. Total Revenue dropped to $64 million and expenses dropped to 66.5 million dollars showing the deficit had decreased to just $2.5 million dollars.
"And no marvel; for Satan himself is transformed into an angel of light." 2nd Corinthians 11:14
It is well known that another source of cash for Whittier College at the end of 2020 was the MacKenzie Scott donation of $12 million. Scott was the former wife of Amazon Founder Jeff Bezos. The grant was given to Whittier College exclusively for the purpose of promoting DEI programs and might not be usable for any other purposes which makes its utility rather limited. Further we found these funds are being used to pay the salary of Oubre's son who is Whittier College's current Director of Equity and Inclusion, a post to which he was appointed by Oubre's supporters on the board and in the administration. Further, Oubre herself stated on multiple previous occasions. We found that the Scott donations can only be for limited purposes which leaves most other college programs and facilities with inadequate funding. The gift from MacKenzie Scott in the amount of $12 million at the end of 2020 created a temporary surplus for Whittier College but also created a distorted picture of its financial health. The gift appears on the 2021 financial statement.
Some how Whittier College assets increased in value in 2021 to $322 million as a result of the Scott distortion. Liabilities continued to decline and there was a sharp decline in student tuition revenue. That amount had dropped from $41.6 million in 2020 to $33.3 million in 2021. The Scott gift distorted the picture by increasing the gifts and pledges revenue amount to $14 million, more than enough to cover that year's deficit. Total revenue was 57.7 million dollars while expenses were 49.8 million dollars. Scott's gift gave the illusion of a nearly $8 million surplus when in reality Whittier College was facing a $4.1 million dollar deficit that the Scott gift had temporarily blinded the administration, faculty, and alumni of Whittier College to. Because of the distortion, very little was done if anything to address the short comings and this forced President Oubre to take emergency measures starting at the end of 2022 and the first half of 2023 that were extremely unpopular and controversial. One strategic the College made for was using the Scott gift to create a new position that was in turn given to Oubre's son. It was also wasted on increasing financial aid to students despite the decreasing number of people attending Whittier College. If President Oubre and the Save Whittier folks, along with faculty and alumni had worked together they could have instead directed the Scott gift toward filling the deficit. The animosity and finger pointing between the groups at Whittier College prevented that from happening. What we are saying is that the current deficit exists because of two things: a mirage and infighting among Whittier College folks. Linda Oubre also stated that when the Scott donation arrived she massively increased the amount of financial aid that students received from Whittier College from the already high $78 million that was being spent on it. We estimate that the increase could have taken the financial assistance part of the budget to over $100 million, or about $22 million maximum far more than the value of the Scott donation. This was at the same time she created the new position that went to her son. However Oubre did not provide precise numbers of how much she increased the aid but we do know that it was targeted to students who came from a specific racial background and as such may have violated federal discrimination laws. Whittier is subject to such laws because based on the financial audits we link to later in this article, it does in fact receive state and federal funding and one of the major rules for such funding is that you are not allowed to discriminate or exclude students based on racial background. Hence the boosting of financial aid for only students who were of a specific racial background may have been illegal under both state and federal law due to the receipt of government issued grants. Our next article will discuss how this actually led to decreasing enrollment as students from other racial groups were excluded. However this does not necessarily mean that Oubre or the Board of Trustees were racist, only that their policies had negative racial effects. There are many good things which often lead to negative outcomes.
2022 Tuition Revenue Continued To Decline As Enrollment Declined
In 2022, the most recent statement available, the College had $294.3 million in assets. That's a reduction from 2021's $322 million in assets. Liabilities dropped slightly from 66.9 million in 2021 to 64.7 million in 2022. Tuition which was $33.3 million in 2021 dropped to just $25.8 million in 2022 and continued to drop in 2023 due to lack of student interest. Gifts and Pledges which were $1.9 million in 2020 and $14 million in 2021 when the Scott give is included but only about $2 million when it is not included had actually increased to $2.9 million. Further we found that it appears that government grants to Whittier College also increased though we didn't look at that in the other financial statements but you can check that for yourselves since we are linking to all of the financial statements used in this article. In 2021 the total revenues for Whittier College from all sources were $57.7 million. In 2022 revenue from all sources have indeed dropped to $45.7 million which is a decline of $12 million. Expenditures in the same period jumped from $49.8 million to $57 million which was a nearly $10 million (about 7 million if you want greater precision) increase in spending at a time which Whittier College's true financial condition literally could not afford the extra spending. While it is true that Oubre was the one that pushed for the extra spending, it still had to approved the then Board of Trustees which was pretty much rubber stamping everything and not asking many questions.
In regards to alumni donations we found that in 2022, alumni provided one of the most important sources of funds to the college but despite a recent offer of over $500,000, that funding has, for the most part, dried up as many alumni report they were insulted or turned off by how Whittier College is currently being managed. Last year, the ECMC Foundation gave Whittier College a grant of only $50,000 to help ensure students' academic success. Depite their claims to the contrary, Oubre's supporters have been able to raise only a little over $120,000 while Oubre's opponents have raised more than half a million dollars for the college but their contributions are contingent on changes in how the college is being run, starting with the resignation of Mrs. Oubre. Despite these issues we found that liabilities had actually dropped from 71 million in 2021 to 67 million in 2022.
Investments:
But what about investments revenue? Regrettably all the markets that Whittier College invested the most in are currently suffering continued economic impact of COVID 19, as well as the ongoing trade war between the US and China, the economic response to Russia's invasion of Ukraine, extremist political partisanship in the US that has seized control of both political parties, and the ongoing concerns about the debt ceiling in the US. During the past decade India and Africa have been emerging as rapidly growing economies with India expected to bypass China sometime around 2050 in terms of population. The African Economic Zone is in a similar situation but like India has attracted little attention from Americans. The African market is expected to be the largest by the year 2100. Their only problem is that they literally mortgaged that future to China to build infrastructure and bombs to kill each other with. See the Sudan conflict for example. If not for infighting and foreign meddling, Africa would soon join the US, EU, and China as an economic superpower. Other emerging and growing markets are Mexico, Indonesia, and the Middle East, including Iran and Saudi Arabia who recently signed a treaty with each other that excluded both the EU and the United States. China for its part has almost reached the point of joining the US in the terms of being a mature economy than will soon begin its decline if it hasn't already. If Whittier College wanted to make money from foreign investments in emerging markets the worst they can do is not invest in India and Indonesia at the moment. Africa will need to wait until they get their stuff together. Whittier College currently only has $5.6 million invested in emerging economies. But they don't say which ones. But this writer is just some random person who has a degree in Business Administration with a concentration in accounting that they never used. On investing, we don't offer advice, only analysis. You'll have to do your own research on these markets.
Conclusion:
Upon reviewing the budgets and independent auditor's reports for the past 7 years we find that while the Oubre administration has been beset by declining tuition revenues and $7 million deficits since her first in the position, we also found evidence she was trying to prevent the losses. That can be kind of difficult when you have people who don't trust you and are casting doubts on your abilities.
What is this based on? Return to the 2022 7 year worksheet above. Yes tuition revenue along with total revenue are down a lot since 2018 and both expenses and the deficit are up a lot. But liabilities are now at their lowest point in 7 years. Further, donation to Whittier College have no declined but have in fact remained flat on average over the previous 7 period. It is interesting to note that Oubre sold the Wardman House to address the deficit. However that sale is not enough to make up for the deficit because it sold for less than half the value of the deficit.
As far as diversifying revenue sources, Oubre actually had the right idea. But that will have to wait until our next article which will address student enrollment. There are trends that are being missed there. However we do suggest continued employment of Nate Oubre and changing his job to one of seeking alternate revenue sources as well as recruiter of new students. Whittier College also needs to prioritize its spending. The biggest and most important item for them to concentrate on currently are the student housing facilities which are turning students off from Whittier. It is recommended that Board members and alumni tour the facilities in their current state to get a fuller understanding of the condition they are in. They will also need to address concerns about departments being underfunded.
Did Linda Oubre run Whittier College into the ground financially? While circumstantial evidence says yes, direct evidence in the form of the auditor's report indicates she was doing what she could to eliminate that deficit and actually succeeded in doing so in 2021 only because the once in a lifetime Mackenzie Scott donation created the illusion of financial stability. However the 2021 report also contained a distortion caused by a once in a lifetime event that created an illusion of a surplus that would not have existed except for that once in a lifetime event. While the Scott donation boosted Whittier's finances in 2021 to surplus levels, that boost did not last very long, only a few months. The 2022 deficit may have been caused by stuff beyond her control such geopolitical events in far off lands that most Whittier residents have never heard of prior to 2022. However we found the claim that Linda Oubre alone is responsible for Whittier College's current deficit to be false based on the facts. In fact while we found that she alone is not responsible for the deficit, we did find evidence that she bears much of the responsibility for the deficit in her capacity as the public leader of Whittier College due to her failure to bring all sides and interested parties together. In fact we found there is plenty of blame to go around. Second the claim that Whittier College will not be open in the Fall or thereafter is false in the short term. They have enough to stay open at least a year and a half, maybe even two year if they spread it out. but everyone involved with Whittier College is going to have to work together, putting aside their differences, if they want it open past that time. And it can happen only if they want it to.
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