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Can Mills College Save Itself?

Questionable financial management has put the Oakland women’s college into a hole. With a new president about to take the helm, the school is grasping for a way out.


Back in October, before the campus became a cauldron of student protests and angst-filled town hall forums, 12 members of Mills College’s student newspaper, the Campanil, gathered around a whiteboard for their weekly editorial meeting. As the all-female staff discussed what issues to report on, one student piped up with some important news: A campus-wide announcement was imminent, she said, and it would reveal proposed curriculum changes affecting multiple academic departments. She had been tipped off by staff members who worried that, once the news broke, students would become anxious and have questions. “I saw the faculty come out [of a meeting], and they didn’t look happy,” she reported to her colleagues.

Sure enough, not two hours after the news team wrapped up its meeting, a memorandum was disseminated among the campus community. Titled “Transforming Mills’ Curriculum for the 21st Century” and sent by the school’s departing president, Alecia DeCoudreaux, the email outlined proposed “teach-outs”—that is, closures—of three undergraduate programs. While it also announced the possible creation or expansion of certain programs, mostly in the STEM and education fields, the letter stated, “We must keep in mind that our programs need to operate with greater efficiencies; some will be revised, some will be created, some will grow, some will need to become more efficient; and some will be eliminated or sunset.” Or, in the plain English befitting a top-tier liberal arts college: Here comes the ax. 

In the Campanil newsroom and outside of it, the proposed cuts were just another development in an ongoing collegiate melodrama. Over the last 18 months, Mills College has been the subject of a litany of news reports questioning the school’s economic vitality and long-term viability. After it was announced in March 2015 that Sweet Briar College, an all-women’s school in Virginia, would be shuttered due to “insurmountable financial challenges,” all eyes seemed to turn to Mills as the next inevitable casualty, (Sweet Briar was ultimately saved in the 11th hour by faculty and alumni who brought the case to court and raised $12 million to keep the school open.) In November 2014, Moody’s Investors Service downgraded the school’s debt rating to Baa3—one step above the classification of “substantial credit risk.” Its report on Mills’s financial status put it bluntly: “The outlook is negative.”

Indeed, a financial maelstrom has been brewing at Mills, one inherited by DeCoudreaux and worsened by unstable investments, bloated administrative salaries, and flagging enrollment numbers. With a $6.6 million budget deficit (which is, according to its own internal records, equivalent to roughly a tenth of its operating expenses) and a presidential transition under way, the school is scrambling, both financially and existentially. Interviews with dozens of members of the Mills College community—including administrators, trustees, tenured faculty, adjunct professors, and students—as well as outside financial experts reveal a tableau of fear and uncertainty surrounding the college. Even as its stewards frantically push it toward a more stable future, Mills continues to flirt with the specter of institutional collapse.

Located in a
serene tract at the foot of the Oakland Hills, Mills College occupies 135 acres of lush real estate. Deer, skunks, and other woodland creatures roam freely within the campus, which is fenced off from the surrounding Millsmont and Fairfax neighborhoods. Kids attending Mills’s highly regarded Children’s School are frequently seen about the grounds. The school’s chapel hosts weddings, and its pool is open to the public for recreational swimming and lessons. Over half of all undergrads live on campus, and first-year students are separated into “themed housing communities” that focus on topics like art, creative writing, and social justice.

Founded in 1852 (16 years before the University of California) as a “young ladies’ seminary” by miners and merchants who didn’t want to send their daughters east for an education, Mills is one of only three women’s colleges left in the state of California (the other two are in the L.A. area). In 1990, the school made headlines after the board of trustees voted to admit male undergraduates in order to boost enrollment; the decision was vehemently protested by students and ultimately scrapped. Mills made news again in 2014 when it became the first women’s college in the country to officially admit any student who identifies as female regardless of sex assigned at birth, a move that was soon picked up by other women’s schools around the nation.

But despite its status as a progressive utopia, Mills can’t escape the threat it faces as a niche college in a competitive market. After a number of news reports last year suggested that Mills might close, the school published a rebuttal on the Washington Post’s website, stating, “Recent articles in the media equating Mills to Sweet Briar have caused unfair and unnecessary panic for current and future Mills students by making some rather large and erroneous assumptions. It’s time for us to set the record straight. Mills College is alive and well!” (Soon after the letter was published, its author, Brian O’Rourke, then vice president for enrollment management, decamped to another university.) Attempts to quell the panic were reiterated in an internal email circulated among faculty in September that urged, “Please conduct conversations about the College’s financial matters and possible programmatic changes in locations that are out of the public eye and ear.” But while Mills continues to issue reassurances that its future is stable, its financial records tell a less sanguine story.

Tax records indicate that as far back as 2008–09, Mills’s total expenses have consistently been higher than its revenue, in some years significantly higher. Internal documents show that in 2014, total expenses exceeded total revenue by $5.6 million. As of December, that deficit had swelled to $6.6 million, the highest on record. Comparatively, Mount Saint Mary’s University in Los Angeles—one of the other two women’s colleges in California—experienced a surplus of $14.1 million in 2013–14. Scripps College, the third, had smaller revenue and expense totals than either Mills or Mount Saint Mary’s—yet enjoyed a $13.3 million surplus that year. 

Declining enrollment has frequently been fingered by administrators and outside experts as one of the biggest factors in the school’s growing deficit. But internal financial records indicate that the deficit has undulated up and down by several million dollars for several years (a function, it appears, of a consistent rise and fall in financial gifts to the college). Over that same period, the decrease in enrollment has been fairly moderate.

Fewer students paying the full-freight tuition of $42,990 (for undergrads) certainly equals less revenue, but tax records indicate that institutional revenue actually increased by 47 percent between 2003 and 2013. This year’s undergraduate count is 867 students. That’s down from a high of 997 in 2013–14—but the school had as few as 691 tuition-paying undergrads in 2000. Enrollment, it turns out, isn’t all that ails Mills College; a difference of a few hundred students doesn’t solely explain why the school finds itself saddled with a growing deficit.

Like most
colleges and universities, Mills maintains an endowment: money invested on behalf of the institution in diversified assets, which in turn provide a small payout annually. As of January, the school’s endowment stood at $175 million (having lost $8 million since June 30, 2015), considered by financial experts both inside and outside the college to be on par for a school with a total enrollment of just 1,405 students. Mills’s endowment, however, has been notably underperforming compared with its peers in recent years. Tax forms reveal that in 2011–12—DeCoudreaux’s first year as president—the endowment’s year-end balance dropped by a tenth, from $183.4 million to $165.8 million. Similarly sized local schools did not experience that significant a loss: Saint Mary’s College of California in Moraga, which has a larger student population but a smaller endowment, saw a drop of only 4 percent during the same time period; Dominican University’s endowment shrank by 6 percent. Meanwhile, some institutions—such as Davidson College—actually saw their endowments grow.

According to Roger Sparks, a tenured economics professor who has taught at Mills for 27 years, poor investment of the endowment has cost the struggling school a potential $20 million a year. Sparks calculates that if the endowment had been invested in low-cost index funds rather than the real estate and energy and resources funds currently preferred by the school’s investment firm, Hall Capital, the rate of return over the last five years would have been about 4 percentage points higher. That would have amounted to around $100 million more in the endowment over that period. Sparks says that when he presented his calculations to the board of trustees’ investment committee, he was met with a less than enthusiastic response. “I got a lot of silence,” he says drily. “They were definitely not happy with what I had done.” (Administrators at Mills dispute Sparks’s calculations, saying that their asset management strategy is designed to perform better over time than investing in index funds.)

But Mills’s numbers aren’t just disappointing. They’re weird. At most institutions of higher education, faculty and staff salaries are part of a school’s overall operating budget, and a separate budget encompasses the cost of managing the endowment. But last summer, Mills transferred the salaries of three members of the school’s finance department from the endowment budget into the overall budget. The move, says board of trustees chair Kathleen Burke, was “a disciplined effort to ensure our business practices are consistent with best financial practices for colleges and universities.” Sparks, however, points out that the salaries should not have been drawn from the budget for the endowment in the first place. “It was as if they were working for Hall Capital, rather than Mills College,” he stresses. “If I put myself in their shoes and try to figure out why I would do it that way, it would be in an attempt to show the college’s expenses aren’t as high as they actually are.”

By November 2014, Mills’s growing budget deficit and “elevated” reliance on the endowment’s payout were enough to push Moody’s Investors Service to further downgrade the school’s already declining debt rating. “Mills College’s continued deficit operations will be increasingly difficult to balance,” Moody’s concluded. That rating change led to a barrage of doomsday reports on the school, and in December 2015, Moody’s reported to San Francisco that Mills had refinanced its debt, transferring it from bonds to a private placement, thereby removing it from the public market. One board of trustees member says this was likely a way to avoid high interest rates—as well as shield shaky finances from public rating agencies.

After the media storm hit Mills, a group of faculty members grew concerned enough to take matters into their own hands, at least as best they could. In late 2014, they set up an Indiegogo campaign (total raised: $3,556) to bring in outside financial analyst Howard Bunsis, an accounting professor at Eastern Michigan University, to evaluate the school’s financial stability. Like a number-crunching Navy SEAL, Bunsis (who has conducted similar evaluations for institutions around the country, including the California State University system) was flown in to Mills and tasked—independently of the school’s administration—with reviewing its financial records. As was to be expected, his was not the rosiest of pictures: In his 88-slide presentation, which was open to anyone on campus and attended by various faculty, students, and administrators (DeCoudreaux did not attend), Bunsis determined that the school had ample reserves but small margins of cash flow. He reiterated Sparks’s claims, noting that the endowment’s investment portfolio had grown riskier over the previous six years. And, notably, he suggested that too much money was being allocated to administrators’ salaries rather than faculty paychecks, echoing the gripe of the professors who had hired him. “Administrative salaries are high everywhere, but at Mills they’re quite high compared to what the faculty get paid,” Bunsis tells San Francisco. DeCoudreaux’s annual total compensation is listed as $510,591 on the school’s 2013 tax return. That’s 17 percent higher than the median salary of $436,000 for presidents of private universities nationwide, according to a survey by the Chronicle of Higher Education. Records show that her salary has increased annually since her first year at Mills (though school tax returns after 2013 are not available) and that her compensation includes a furnished, landscaped, on-campus residence. “There’s a lot of people who make the decisions who may not be standing up to the core academic mission,” Bunsis continues, “and I think that’s a problem.” The average salary for an associate professor at Mills—$93,700—is actually slightly above the national average, according to data from the American Association of University Professors. That doesn’t take into account, however, that more than half of the school’s teaching staff are adjuncts, who are currently paid between $5,000 and $8,000 per course.

In many ways,
Mills is not just an embattled institution but an anachronistic one as well. According to the Women’s College Coalition, there were 230 women’s colleges in the United States in 1960; today there are 43. Michele Ozumba, president of the WCC, chalks up the decline to progress. “When the coed movement of the 1960s created more choices, it led to women’s colleges going coed or closing. Now we’re 40, 50 years on, and societal changes in general contributed to that [drop],” she says. Though Sweet Briar was ultimately saved, many of its students still ended up transferring (including to Mills), and its future remains murky. While some could argue that the hallmarks of a women’s college—equity in the classroom, communal sisterhood, greater access to certain job opportunities—are no longer necessary in today’s society, others, including Ozumba, suggest that there is still an important role for women’s colleges to play in the field of higher education. “Women’s colleges,” she says, “have a great opportunity to develop new curricula and new principles and protocols to help redefine women in the workplace.”

It remains to be seen whether Mills can seize that opportunity. In an annual special meeting last April, a straw poll was taken among the faculty regarding a potential no-confidence vote against DeCoudreaux. The result was overwhelming support for her removal. “At the time, the discussion was that we needed to send a message to the board of trustees that the college was being managed poorly,” says Sparks. “We hadn’t been able to get through to them in other ways.” Soon after, DeCoudreaux announced that she would not renew her contract, which expires this June. The president says that the decision to leave Mills had to do with personal family duties and was not a result of the looming no-confidence vote or the barrage of attention regarding the school’s fiscal shortcomings. “There was a lot of speculation, and a lot of people in the community were concerned that I knew something that the rest of the community didn’t know,” she says. “Mills College is facing enormous challenges, but we’re addressing them head-on.”

Despite murmurs regarding Mills closing its gates, the school seems dead set on opening them wider, and to more students. In January, Mills announced that it would no longer require SAT or ACT scores for admission, joining nearly 200 other colleges across the country that consider the requirement an unnecessary metric that weeds out underrepresented populations. That same month, the international language and exchange program Education First reopened its bureau at Mills, bringing 70 new students to campus. This summer, the school will roll out a new translation MFA program, bringing in more students and educators. And after an anxiety-ridden fall semester marked by demonstrations and town hall meetings over the proposed curriculum changes, the school announced in December that it would, in fact, retain the undergraduate dance program, considered the longest-running such program in the country—and one of the three marked for possible discontinuation. The fates of the book art and American studies programs, also proposed for closure in DeCoudreaux’s October email, have not yet been disclosed.

Regardless of these efforts, an air of uneasiness still pervades Mills’s campus. Anxiety is high, say many students and faculty members, and both groups are quick to rail against the school’s leadership. In February, it was revealed that the associate dean of education, Sabrina Zirkel, will depart Mills in June for a position at Santa Clara University. The chair of the faculty executive committee, Zirkel has been directly involved in managing the faculty’s fraught relationship with its administration. In December, the committee was asked by DeCoudreaux to nominate fellow faculty members to help review current and future salary plans. “These are talented people that could get more prestigious jobs at universities elsewhere, but they want to be in the Bay Area,” Sparks says of his colleagues. “The weakness is the leadership; the decision making goes from bad to worse. I’m counting the days until we have a new administration.”

He won’t have to count for very long. On March 2 (six days after telling San Francisco that the presidential search had not been narrowed down), Mills announced that Elizabeth L. Hillman will take over DeCoudreaux’s post, starting July 1. Hillman, a current provost, academic dean, and professor at UC Hastings College of the Law, previously served in the U.S. Air Force and has done extensive work on gender issues within the military. But in order for Mills to ensure its future success, it needs a president who can juggle the various demands coming from adjuncts, tenured faculty, and students. It also needs someone who can come up with a rigorous and fast-acting fix for the school’s deep-seated financial woes. The proposed addition of a data science program and boost in existing computer science and mathematics majors could be an important step forward in bringing more women into the STEM field, which could increase the school’s popularity. Though graduate programs have been coed since being established in the 1920s, and the addition of male undergraduates is “the third rail,” in the words of one board of trustees member, the latter is an important consideration for an institution running a deficit of $6.6 million. Those inside and outside the college point out that such a move wouldn’t just add male students; it could incentivize more women to come as well. But it would also eliminate the one factor that makes Mills different from nearly every other small, leafy-green liberal arts campus in the state.

Either way, Mills has the chance to reinvent itself as a sustainable institution with a healthy future. The only question is how much longer it will wait.

UPDATE (3/25/16): Mills College Responds 

Mills has replied to the magazine with an open letter rebutting some of the claims made in this story. A portion is excerpted below; the full letter is posted on the college's website.

An Open Letter to the Editor of San Francisco Magazine.

Despite the recent headline to the contrary, Mills College is most definitely not on academic probation. While these types of cheeky sound bites may make for good copy, they lead to very real angst for the school’s students, alumnae, parents, faculty, and leadership. It is for that reason that we feel compelled to write to set the record straight.

It is true that Mills, like many women’s colleges, faces profound challenges borne out by the changing landscape of higher education. Virtually all colleges—big and small, private and public, coed and single sex—are struggling to manage student fees, maintain enrollment, and innovate for a new generation of students and careers. In our backyard alone one can witness the struggles of our major public universities all the way down to our community college districts. Mills’ challenges are further compounded by its desire to maintain its commitment to undergraduate women’s education.

Unfortunately, this story ignores the bigger picture and instead the reporter chose to cite just a small, skewed fraction of the data she was provided by external parties to paint a decidedly lopsided story. It is simply inaccurate to imply that Mills is being cavalier in its approach to dealing with the school’s finances or that it has failed to take its fiduciary responsibility seriously. While it is too cumbersome to now correct all the inaccurate numbers in the story, we do want to make it clear that the allegations regarding the underperformance and mismanagement of the school’s endowment are completely off base. According to the NACUBO (National Association of College and University Business Officers), a survey of 812 schools from 2010-15 showed Mills’ endowment performance consistent with and, in some cases, outperforming comparable schools and NACUBO averages.

On the other hand, it is fair to say that Mills has been struggling to manage a long-term systemic deficit, one inherited by this administration and compounded by the Great Recession, which has proven intractable. Prudent choices are being made to right the ship and to bring expenses in line with revenue. But these choices can be painful and sometimes controversial, as evidenced by the anxiety of those who are devoted to areas of study being considered for reorganization. The need to reimagine programs like dance or book arts in no way diminishes the value of those fields, but it does reflect the reality of falling enrollment and budget mandates.

At the same time, Mills is also looking for opportunities to evolve to meet the needs of the 21st-century student. Program opportunities for women in leadership, STEM fields, business, and language are on the rise and will bring a new generation of students to Mills’ front door. As such, Mills has re-envisioned its general education requirements and created a new core curriculum that will launch in fall 2016. The new core curriculum was developed by faculty to provide a 21st-century liberal arts education that aims to create engaged global citizens—Mills graduates with the confidence and tools to think for themselves as well as the grace and compassion that compel them to care deeply about the needs of others. The core curriculum will prepare students to participate in a rapidly emerging and evolving world community and to develop their sense of responsibility for the needs of the planet and its inhabitants.


Alecia DeCoudreaux


Kathleen Burke
Chair, Board of Trustees

Originally published in the April issue of
San Francisco

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