Documents reveal wide scope of business school issues

The GW School of Business that Doug Guthrie took over in 2010 faced lagging research, sub-par teaching and insufficient financial support from the University at large, according to the plan he penned that year.

The plan advocated for about $35.5 million from GW to pay for new programs and better faculty over five years, and it provides the clearest backdrop yet to a deanship marked by funding battles, faculty pushback and mismatched expectations.

The college ended up with much less: about $10 million of GW investments through Guthrie’s three years.

Guthrie wrote the plan with business school administrators after the college faced a $4.5 million budget deficit the year before. To turn around the school, he wrote that the University should consider buyouts for faculty with poor research records, go after a $50 million donation to name the college and pump in investments to a school that’s “radically underfunded.”

Three years later, he was fired over the fallout of $13 million in extra spending, which he said was necessary because the University still wasn’t investing enough in the school.

“That plan was quite ambitious. You can see from it what kind of investment it calls for. There was some confusion – it was my understanding that the University was going to invest a significant amount of money. What they’re calling ‘the signed plan’ was much less ambitious,” Guthrie said.

Provost Steven Lerman told The Washington Post that the school still has work to do. “Has it yet made that quantum leap that Doug envisioned?” Lerman asked. “Probably not. But it’s on the pathway.”

A history of overspending
When Guthrie asked officials for larger investments in some of the business school’s most profitable programs – like online MBA programs and a executive MBA classes for star athletes – he called administrators out for taking more and more money each year from the school’s revenue to put toward the University’s operational costs, like student aid.

“If GW truly aspires to compete with schools at this level in the national rankings, it will be impossible with its current levels of funding,” the 2010 budget memo reads.

The business school’s revenues surged in recent years, outpacing expenses. But as the school hauled in more money, the University funneled more back into administrative costs.

Before Guthrie began his deanship, the business school was allowed to keep 44 percent of its revenues, down from 48 percent three years prior. Now, the business school keeps about half.

“Ironically, the better the School performs, the less support it receives from GW,” the document reads.

In a meeting of business school faculty last week, professors called out Rice Hall administrators as the “true enemy” in the budget battles, accusing GW of forcing the school to be a “cash cow” for the rest of the University.

Guthrie said last week that the University shouldn’t have been shocked by this year’s budget deficit because officials had always anticipated about $9 million of overspending.

“Everyone knew were were spending over budgeted expenses. That was part of the plan,” Guthrie said.

‘Unacceptable low standards’ for faculty
The money taken out of the school’s revenue stream, the 2010 working budget says, forced the business school to fall behind other schools in competitive pay rates for faculty, in turn diminishing the quality of teaching in classrooms.

Teaching standards at the business school were “drifting toward unacceptably low standards,” according to the document.

The report, centered on the business school’s lackluster rankings, heightened the tensions as Guthrie called for faculty buyouts, took control of tenure cases and demanded more teacher ratings and accountability .

A massive fundraising push
Guthrie’s plan also called for raising between $75 and $100 million for the school over seven years. He wrote that the school would struggle to pull in donations “if the central administration itself is not willing to invest in GWSB,” the document reads.

It also stresses a $50 million gift to name the business school – for which the school had identified eight potential donors.

The school’s endowment was about $26 million in fiscal year 2010, compared to competitor universities like UCLA’s $84 million endowment and the University of Michigan’s $316 million endowment.

Goals of the fundraising included up to $23 million for research, $5 million for financial aid and up to $45 million for the school’s endowed chairs.

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