Grand Canyon Univ. sold; trustees in advisory role
PHOENIX (BP)--Grand Canyon University, founded by Baptists in 1949, has been sold by its self-governing trustee board to California-based Significant Education, LLC.
A local Phoenix reporter speculated that the GCU sale to a private education management firm marks the first time venture capitalists have purchased an existing university. Selling a college is certainly a new step for trustees who have declared their independence from a state convention.
Grand Canyon trustee chairman Donald E. Pewitt announced Feb. 2 the sale of "certain assets" of the previously Southern Baptist-related school to Significant Education, LLC, a for-profit subsidiary of a company known as Significant Ventures.
Financial details of the transaction have not been disclosed, although the Arizona Republic described it as "a combination of cash, debt assumption and lease agreements."
The Significant Ventures firm was hired in January to shore up the debt-ridden college and expand its enrollment by encouraging nontraditional education through distance learning via the Internet. The entity will be renamed Grand Canyon University Institute for Advanced Studies (GCUIAS), with Significant Ventures founder Michael K. Clifford serving as managing director and Brent Richardson as chief executive officer. A search is underway for a new president after Gil Stafford resigned in December to pursue the Episcopal priesthood.
Stafford told Baptist Press, "From what I know, it appears that this is a new, creative and innovative way to create a partnership that will ensure the future for the university." He reiterated that his decision to resign came prior to discussion of the sale. "My decision was made a while ago. While the timing was right, I was simply trying to follow the will of God."
Current trustees will hold the option to veto new faculty and will serve as an advisory board to the firm. "I didn't want to be the sole person deciding on new faculty," Clifford told Baptist Press. He anticipates "substantially greater opportunities for the faculty and staff than have been available in the past" and plans to review their compensation and tenure. "We remain impressed with the faculty and staff and their dedication to the University," Clifford said.
One area that needed attention involved the management of the school's business, Clifford said. "The people that have been running the school have hearts of gold. They are trusting, honest Christian people who have really been taken advantage of by vendors. A lot of things we've discovered involved well-meaning people who were more interested in the spiritual and academic quality." As a result, he said, business contracts are being reviewed to improve the management process.
Actual oversight of the university is in the hands of Significant Education's seven-member board which includes two current trustees. "You can either raise donations or raise investment capital," Clifford said when explaining the decision to place the university under a for-profit company. "We felt the best way to raise capital to right this ship and grow as we wanted was through the for-profit model."
The existing non-profit entity, meanwhile, has been restructured to continue to hold endowments, scholarship funds and annuities now with GCU, Pewitt said. All of the buildings and land also will remain with the non-profit entity.
Begun by Arizona Baptists to provide training for preachers, Grand Canyon University remains Arizona's only private, Christian, liberal arts university. GCU claims an enrollment of more than 3,000, while the Association of Southern Baptist Colleges and Schools lists the number of fulltime undergraduate students at approximately 1,350 and graduate enrollment at 2,635. GCU is still listed as a member of the association, but its Southern Baptist connection was dropped when trustees declared their independence from the Arizona Southern Baptist Convention four years ago. The number of Southern Baptist students attending the school has been estimated as fewer than 5 percent.
Pewitt, in a letter posted on GCU's website, voiced assurance that the integrity of GCU's Christian mission would be maintained. "As we promised in our last letter, the Grand Canyon University Board of Trustees has been working diligently the last three months to bring GCU into a stronger financial position to provide academic excellence within a Christian liberal arts institution," he noted.
GCU alumnus Thane Barnes, executive director of the Nevada Baptist Convention and a former trustee of the Arizona college, said he is encouraged to learn of the new ownership of the school. "Michael Clifford and the Significant Education group have proven to be men of integrity and honesty," Barnes told Baptist Press. "They want to return the university to its historic Christian roots and uniquely Christian mission."
Barnes takes news about the school personally, recalling several significant events from his student days. "My life fell apart at the school and it was during that time that I met the Lord." He was called to preach during his college years and met the woman he eventually married.
Having resigned from the GCU board due to a frustration that "the school seemed to have veered off-course theologically," Barnes said, "This new day in the life of Grand Canyon University can be seen as a course correction by many."
Barnes said he had felt that GCU had shifted from an evangelical to an ecumenical approach. "The school was going in a direction theologically divergent to its roots. Now we see a commonality of views consistent with the heritage of the school 50 years ago. My hope is that the evangelistic fervor will return and that conservative theology will be the norm at GCU."
Clifford reassured Barnes and other Southern Baptists interested in the future of Grand Canyon University. "First and foremost, we are going to honor the heritage. I don't know all of the history of where Southern Baptists feel the school has gotten away," he said, "but I have some really good friends that are Southern Baptists and I'm asking them for help." Clifford said a GCU representative will attend a meeting of the Arizona convention's historical commission seeking input as to "how the school can honor that heritage and make it a part of our mission." Closer to home, a question-and-answer session for current faculty and staff was held on campus Feb. 6.
Both Pewitt and Clifford said GCU alumni have been underutilized in the past. "The alumni are very important to the new team and will be called upon to help students of the present and future better prepare themselves to advance the cause of Christ and contribute successfully in society and the job market," Pewitt wrote on the GCU website.
Significant Education has adopted the school's current mission statement "to maintain a university, and to encourage, support, maintain, and promote education under Christian influence and auspices, with the view to the development of the best type of character and to the advancement of the gospel of our Lord and Savior, Jesus Christ, and the extension of the Kingdom of God among men."
Grand Canyon University will remain the name of the campus-based program, Pewitt wrote, with all majors currently available to be maintained. "It is anticipated that substantially all such programs and majors will remain in place for the foreseeable future," he stated in his letter. "In short, the outstanding academic curriculum offered by the University will remain."
Encouraging feedback from students, faculty and staff, Pewitt said the interim leadership team is evaluating "many intriguing opportunities" proposed by the GCU community.
One idea proposed by Clifford is likely to please students: "We are going to lower tuition dramatically," he said, setting a reduction goal of 25 percent. While annual tuition at GCU is priced at about $14,000, Clifford said comparable schools charge $21,000. "We will try to price ourselves under out-of-state tuition for the state schools, using a six-sigma business methodology. That's our secret sauce," Clifford said, referring to an approach made famous by Jack Welch, former General Electric CEO.
Described as a highly disciplined process that helps a company focus on developing and delivering near-perfect products and services, "sigma" is the word for a statistical term that measures how far a given process deviates from perfection. By measuring how many defects there are in a process, a company can work to systematically figure out how to eliminate them.
"Significant Education is now in the process of building a world-class management team that is respected by the educational and financial community," according to a news release on the GCU website. "The company's goal is to grow the 50-year-old institution into a major world-class Judeo-Christian campus on par with Baylor, Liberty, Taylor, Regents, and Oral Roberts University, while significantly increasing enrollment in its online programs. In order to reach this goal, Significant Education will be implementing changes that will lower tuition, retain and enhance academic quality, and provide more scholarships."
Clifford anticipates enlisting "nationally respected Judeo-Christian leaders from business and industry" to a national advisory board. "We're going to increase value of the GCU degree in business circles by strategically partnering with high-quality universities globally, the Fortune 1000, and Arizona-based businesses locally," he added. "In addition, we believe GCU's high-quality education, which promotes traditional values and ethical behavior, is very relevant today, especially in corporate America."