Radio Interview About David Geffen

Susan Lacy and David Geffen

PBS recently ran an "American Masters" episode about David Geffen who just donated $100 million to the UCLA med school.  [See yesterday's post.]  Yours truly did not see the PBS program but there was a radio interview with the program's director, Susan Lacy, aired on KPCC on Nov. 20.  One amusing anecdote is that Geffen got his first (mailroom) job by stating (apparently falsely) that he was a UCLA grad.  I'm sure he could have an honorary UCLA degree at this point if he wanted one.  The interview can be heard at the link below.

Legislative Analyst Says Everything's OK With UC Faculty Pay

Legislative Analyst's summary:

In this report, we assess UC’s ability to recruit and retain tenured and tenure-track faculty. We find that (1) UC has been hiring candidates who have received their highest degree from some of the most selective universities in the nation, (2) UC has a long history of hiring its top choice faculty candidates, (3) most new entry-level faculty stay at UC long enough to earn tenure, (4) less than 2 percent of faculty resign from UC each year, and (5) UC’s faculty compensation is competitive with other top universities. These findings indicate that UC generally has been successful in its faculty recruitment and retention efforts. In light of these findings, coupled with the continuing need to prioritize limited state funding, the Legislature will need to assess the relative trade-offs between providing funding for faculty salary increases and other competing budget priorities involving faculty and higher education more generally.

Full report at http://lao.ca.gov/reports/2012/edu/uc-faculty/uc-faculty-121312.pdf

So not to worry!!

California has a "529" Tax-Favored College Savings Program

In case you didn't know it, California maintains a tax-favored "529" savings program for college tuition (and related college expenses) that works something like an IRA.  It can be used for any qualified institution nationwide, not just UC.

Details are at https://www.scholarshare.com/home.shtml

Excerpt:

Contributions and Any Earnings Used to Pay for Qualified Higher Education Expenses are Federal and California Income Tax-free.

The earnings portion of any distributions used to pay for qualified higher education expenses will be free from federal and California income tax.

Federal Estate and Gift Tax Benefits
Contributions to ScholarShare may reduce the taxable value of your estate. For example, contributions to the Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $13,000 per donor ($26,000 for married contributors), per beneficiary. If an account owner's contribution to a ScholarShare account for a beneficiary in a single year exceeds $13,000 ($26,000 for married contributors), the account owner may elect to treat up to $65,000 of the contributions, or $130,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.

Flexible Features

Anyone May Open an Account
Parents, grandparents, relatives and friends who are U.S. citizens or resident aliens and at least 18 years of age may open an account and contribute to ScholarShare on behalf of a beneficiary*. California state residency is not required. However, investors residing outside of California should consider their own state's plan first as it may have tax advantages that are only available through that state's plan.

Funds Can be Used at Eligible Schools Nationwide
Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used at any eligible higher educational institution in the nation and many abroad.

Funds Can be Used for a Variety of Qualified Expenses
Funds can be used for tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs, certain expenses for "special needs" students...

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Yours truly was reminded of this program by a blog note from the Sacramento Bee mentioning that the account limit in this program was likely to be raised to $371,000 per beneficiary from $350,000.  See

http://blogs.sacbee.com/capitolalertlatest/2012/12/am-alert-new-election-cycle-new-contribution-limits.html [scroll down]

And as it happens, there is a report on the use of such accounts today in Inside Higher Ed with a link to a GAO study:
http://www.insidehighered.com/quicktakes/2012/12/13/few-families-use-education-savings-accounts

The Gift of Human Capital is Good News for UCLA and for the Donor

The Good News

By the time you read this posting, you will likely have heard or read about David Geffen's gift of human capital - in the form of scholarships - to the UCLA med school. From the official UCLA media release: 

Entertainment executive and philanthropist David Geffen has established an unprecedented $100 million scholarship fund that will cover the entire cost of education for the very best medical students attending the David Geffen School of Medicine at UCLA (DGSOM). The school was named in his honor after his $200 million unrestricted gift in 2002. With this recent gift, Geffen's total philanthropic support to UCLA exceeds $300 million, making him the largest individual donor to UCLA and to any single UC campus. The David Geffen Medical Scholarship Fund, conceived by Geffen and announced Dec. 13 by Dr. A. Eugene Washington, vice chancellor for health sciences and dean of the medical school, ensures that DGSOM will have students who graduate from medical school debt-free, allowing them to pursue lifesaving research and patient care without the economic burdens that restrict the choices of many young physicians and scientists...

Full release at http://newsroom.ucla.edu/portal/ucla/100-million-david-geffen-scholarship-241543.aspx

Gifts of this type can be thought of as contributions of human capital.  Other forms include endowed chairs, research grants, etc.  Such gifts have no termination unlike physical capital gifts, which can someday be demolished.  Human capital gifts, therefore, are true legacy gifts.  Structures are not.

Yours truly was an undergraduate in the early 1960s at Columbia.  A prominent structure that had just been built at the time was Ferris Booth Hall, named after an investment banker.  Below is a picture of Ferris Booth Hall. 

The now-demolished Ferris Booth Hall

If you went to the Columbia campus today, however, you wouldn't see Ferris Booth Hall.  Why? How could such an imposing structure disappear? Because it was torn down and replaced by another building named after someone else in the 1990s.  That is, a little more than three decades after the donation, the fruits of the large gift had disappeared.  

Proposed UCLA hotel-conference center

By the way, you might have noticed that Ferris Booth Hall looks uncannily like a certain UCLA hotel-conference center project.  So there is a lesson to be drawn: Massive structures may seem like legacy donations.  But they can disappear.  In contrast, human capital donations, properly endowed, will last.  Physical capital donations are Good News for the build-and-bond bureaucracies that depend on them for employment.  Human capital donations are Good News for the university and the donors.

Missing the Point on the UC Logo

I thought we could put the UC redesigned logo story to bed - at least for awhile.  (See the previous and earlier posts.)  But, alas, KPCC this morning aired an interview with a "brand developer" who totally missed the point.  She rattled on and on in a British accent (so who could doubt what she said?) about how the whole problem was the "process" by which the new design was introduced.  If only there had been more participation in the logo design.  Etc. Etc.

Here are the problems and they have zero to do with process.

1) UC has bigger issues to deal with.  Why was anyone spending any time on redesigning the logo?  Could it be that someone thought it was important?  Why would anyone think that, if so?  What kind of priorities would such a person have?

2) What will the redesign bring about?  Will it raise the budget allocation from the state for UC?  Will donors give more money to UC thanks to the redesign?  Will more research grants be obtained by faculty?  Will courses become less crowded?  What?

You can say there is a UC "brand" if you like, but that brand has nothing to do with a new logo.  For that matter, it had nothing to do with the old logo.  UC's brand is its reputation. 

There is an old saying: A job not worth doing is not worth doing well.  Too bad that simple notion escaped the brand developer KPCC interviewed.  Let's hope no one at UC headquarters heard the program or took it seriously. Otherwise, we will all be involved in a time-wasting "process." 

You can hear the radio interview at the link below:

The New UC Logo is Just Part of a Fad

OK. Enough fun with the new UC logo.  But let's forget the rationale about how it was done to look nice on the Internet.  What we have is a general fad about simplifying old logos to make them look "cool" and "modern."  UC got swept up in the fad. Take a look at the old and new city logo for Santa Monica above.  The old one was, well, old fashioned with its Latin phrase (even though it does have little helicopters).  So someone did to the Santa Monica logo what UC has done to its logo.  The difference was that no one in Santa Monica seems to have noticed or made a fuss about it. But the same impulse was at work in the designing.

Trivial Pursuit?

The California State Auditor examines the accounts of state agencies including UC.  Chapter 8 of its latest report focuses on an unnamed administrator who came from CSU and apparently misspent travel funds there to the tune of over $150,000 before arriving at UC.  When this problem at CSU became known, UC tightened up the oversight of the administrator’s UC travel.  Nevertheless, the auditor found a few thousand dollars in improperly charged UC travel expenses.

From Chapter 8:

…In October 2012 the university reported that it intends to seek reimbursement from the official for the wasteful expenses identified in this report. In addition, the university stated that it has reviewed the official’s most recent expenses for fiscal year 2011–12 and that it would seek reimbursement from the official for any additional improper expenses it finds. Further, the university stated that the official is leaving university employment at the end of 2012.  In responding to the four policy‑related recommendations, the university stated that it is prepared to explore ways to strengthen its expense policies and procedures. Consequently, the university stated that it has assigned an individual to work with the systemwide campus controllers to analyze the recommendations and determine the feasibility of adopting the recommendations into applicable university policy.

I had the impression – back in the day when I headed on ORU – that university accounting procedures were designed to prevent you from stealing less than $50.  Great efforts were spent on trivia.  Big problems went undetected unless a scandal came to light.  The auditor’s report reminds me of that impression.  UC has a $22 billion budget.  An entire chapter of this report goes into the travel problems of one official – albeit one who had probably set a record of travel overcharges at his prior employer (CSU).  [The hiring process by which UC acquired the unnamed official is not discussed.]  As we have noted in earlier posts, the University has a huge capital budget which proceeds with only nominal oversight by the Regents. Even a champion at travel expense padding would have a hard time running up bills that could compare with potential capital expense missteps.

You can read the report at the link below.  Scroll to chapter 8 for the UC segment.

121211 State Employee Audit