The TIAA Proposal – A Deep Dive


By Anonymous

Much credit should be given to Santiago Peralta, Michael Reardon, Nikhil Purwaha and Abhishek Nagaraju for their joint statement regarding the ongoing tug of war between the administration, TIAA, and to a lesser degree, Laureate.

Beginning with the mass emails sent to the students by TIAA and its student representative, Christopher Gosselin ’14, the organization has presented itself as a savior of sorts for the Thunderbird Community.  After all, with the increased and well-deserved scrutiny on for-profit education entities over the past few years, few students seem comfortable with the Laureate alliance on face value.  That said, the reality of the situation is that the school finds itself with $24 million in debt, and due to roughly 40% drop in attendance numbers post-recession, a negative operating cash flow.  Despite layoffs and cost-savings projects, the school seems unable to obtain solvency.  However, the exact nature of the situation is largely unknown to the student body as Thunderbird does not publicly publish its financials, an initiative some other business schools have undertaken.

But just how realistic is TIAA’s proposal?  Are there perhaps other motivations at work here?

This author, a current MBA student, reached out to the TIAA and Christopher Gosselin for comment on a wide range of questions, the answers to which are available separately.  Overall, the TIAA handled a tough line of questioning with relative grace and forwardness in their responses.

Regarding the recent email sent by Mr. Gosselin and its content:

According to TIAA and Chris Gosselin, financial compensation is not being provided to the members of TIAA, which operates as a volunteer organization.  Mr. Gosselin is not receiving financial aid or compensation for his efforts aiding the TIAA.  Further, The TIAA confirmed that Will Counts, Executive Director, is still an employee of the Hinrich Foundation. According to the TIAA, this information is stated in their non‐profit application to ensure there is not a conflict of interest. Mr. Counts serves as a volunteer for the TIAA, but his compensation from the Hinrich Foundation was not discussed.

Some current students may have been wondering about the wide range of job listings provided, which were exclusively within the non-profit space.  Many jobs required PhD’s in Marine Science-related fields, which brings into question the validity of the opportunities being “offered” by the TIAA.  The TIAA has confirmed that these jobs are not supported by any specific alumni.  To clarify, these job listings were provided by TIAA volunteer alumna, Lia Colabello ’02, who works within the NGO business space and receives a weekly email containing NGO job opening.  To the author’s knowledge, no job listing has the backing of an alumnus willing to help in the process.  While the students certainly appreciate any potential opportunities, the amount of direct help these listings provide the students is questionable.

When asked how many job openings have been posted by TIAA members, and/or how many Thunderbird students have been hired by TIAA members since Fall 2013, the TIAA was unable to provide an answer.

There was also mention of a mentorship program.  When asked for details on said mentorship program, the TIAA provided a general overview without any specifics as to the selection/matching process, mentor-mentee communications, and desired measurable outcomes.  While the description provided was positive, any proposed program should be evaluated on its specific merits, rather than positive rhetoric.  To be fair, the TIAA in their response stressed that this program is a work in progress.  Should specifics be ironed out, this mentorship program could be a fantastic opportunity for students and alumni alike.

With regards to the “student spotlight” opportunity, the TIAA clarified that all students are eligible, not solely those who participate in the TIAA.  Per the TIAA’s response: “All students who want to be spotlighted in TIAA’s regular communications to Thunderbird alumni should send their 150 word bio and a photo to”  It is hoped that after a certain period of time, the results of the spotlight program will be provided by the TIAA.

The TIAA also highlighted that “80+” alumni have contributed funds since the HLC decision.  This author requested information on the total number of alumni in the TIAA, the financials of the contributions made to date, and the spending breakdown of each dollar donated.  TIAA provided its number of subscribers (17,500) and contributors (350), which does not necessarily provide a clear answer as far as participating members.  Current students are likely included in the number of subscribers, and this author was just as surprised as everyone when the first TIAA email arrived.  The TIAA has yet to detail how it received a list of all current students, but the underlying implication here is that a sympathetic student forwarded an all-campus email to the TIAA for addition to their mailing list (an assumption which has not yet been confirmed by the TIAA).  It is hoped the TIAA provides a more cogent and tangible response to the question regarding active members.  However, on a strongly positive note, the TIAA explained it operates exclusively on the $2 million contribution made by its Board of Directors.  Donated funds to the TIAA Transition Fund are marked in a special and restricted account (details not provided as to the structure under which it operates) to only be used if Thunderbird accepts the TIAA’s offer to support the negative cash flows of the campus.  No details were provided as to how or whether funds would be returned in the event the school does not accept the TIAA’s offer, albeit that specific question was not posed.

A final point of clarification was requested as to whether the TIAA claims to speak for all 40,000+ alumni.  The TIAA’s response was based on the survey conducted in November.  While respondents numbered 1,153 of the total alumni, the TIAA explains: “[We] can statistically say that these results represent the alumni opinion with a 99% confidence level with a +/- 3% margin of error…[We] are able to say TIAA represents the majority view of alumni towards the formerly pending alliance between Laureate and Thunderbird.”  TIAA has also committed to continuing to try and understand the moods/opinions/sentiments of the school/students/alumni.  While the TIAA was clear that they understand no one group can speak for everyone, the implications of their proposal are just that; the TIAA would be essentially the controlling voice within the school community.     

Regarding the TIAA’s proposal, this author presented an aggressive line of questioning.  Underlying motivations of the primary stakeholders were questioned, as were potential conflicts of interest and apparent hypocrisies.  To bring students up to date, the TIAA submitted a formal complaint letter to the HLC about the proposed Laureate alliance, which can be found and read here:

Many of the questions posed to the TIAA dealt with the complaint filed as well as the recent proposal.

The first question addressed that while the TIAA proposal suggests covering negative cash flow it did not address retiring the school’s debt.  In essence, the fundamental issue would still exist, regardless of negative cash flows.  Further, the February 14 TIAA complaint to the HLC raised the concerns about Laureate being a in a highly leveraged position. If debt levels are of concern to the TIAA, why did their proposal not address the school’s debt issue? The TIAA responded that “[helping to retire the school’s debt] can certainly be discussed should the Thunderbird Board of Trustees wish to discuss TIAA’s offer.”  That said, this author feels that such a core issue should have been addressed up front in the proposal.  The lack of its inclusion raises serious concerns about the seriousness of the TIAA’s proposal and its aim to help the school remain solvent.

Initially, some accounts had stated that Mr. Hinrich’s original proposal was rejected due to a conflict of interest, as he served on the board during that time.  The TIAA has countered that Mr. Hinrich’s proposal was never presented to the entire Board nor was it in conflict with the proposals offered by “Hult, ASU or the other schools.”  No further details were provided.  Additionally, the TIAA was questioned whether Mr. Hinrich or any other TIAA members stand to financially benefit under the arrangement of the new proposal.  The TIAA has stated that it considered funds to be purely a donation—with the implication that the school is not bound to repay the funds.  TIAA has confirmed that as it is a non-profit, contributors may take advantage of the normal US tax credit in the same fashion they would as when they previously donated to Thunderbird or any other non-profit.  Per the TIAA’s response: “No donor will financially benefit from the proposed arrangement.”  The primary concern was that perhaps the TIAA could be serving as a tax-savings strategy for the wealth members of the TIAA, much as professional athletes often maintain their own non-profits.  The TIAA’s response states that its motivations are pure, and stressed that no individual will receive special tax savings.

In one of the toughest questions posed to the TIAA, this author requested comment on whether Mr. Hinrich’s resignation from the board, subsequent submission of the complaint letter and the rejection by the HLC have all serve(d) to strengthen the position of the TIAA’s proposal.  Further, comment was requested as to whether the TIAA’s ongoing engagement could constitute an attempt to take control of the school. The TIAA disputed both questions, stating that Mr. Hinrich’s original proposal was not a bid to purchase the School, and that its current offer is supported by hundreds of alumni.  Moreover, the TIAA emphasized that “[the proposal] is not a bid, but rather it is an offer to donate financial resources to the school to allow Thunderbird the time and breathing room necessary to make a decision that works well for the future.”  In this author’s opinion, the validity of the TIAA’s classification of this as a “donation” must be called into question when said donation comes with the conditions of handing a supermajority of the board to the TIAA.  Popular guidelines for donations may be the department that will benefit, naming rights, etc.—not complete board control.

Part of the source for this author’s concern stems from the fact that the TIAA originally stated in a previous email that they would not submit a proposal because they had no interest in buying or running the school. Now, however, the condition of gaining a supermajority of board positions essentially constitutes control of the school.  While the TIAA did point out that their supermajority request relates to the number of Thunderbird Alumni, their offer letter also clearly states: “The alumni members of the board shall include the trustees of the TIAA trust” and that “the current board shall agree upon any [Board] resignations and/or amendments to the by-laws necessary to accomplish these changes in consultation with the TIAA.” (Author’s emphasis)  It is difficult to understand how such conditions do not hand control of the school’s affairs, at least on the board level, to the TIAA.  To the above point, the TIAA in their February 14, 2014 complaint letter raised issue with the manner in which board members would be appointed under the Laureate proposal. This author requested that the TIAA elaborate on how board members will be selected and elected under their proposal, as well as compensation levels (and corresponding methodology) for the board members.  The TIAA’s response was thorough, and while lacking exact specifics, it was a fairly comprehensive response. The TIAA proposed the following; “updating the governance policies of the Thunderbird Board to modern day best practices, [including] sunset laws, minimum financial (contribution) responsibilities by each member of the Board, along with guidelines for attendance and a supermajority of alumni sitting on the Board. There will be no compensation for board members.” (Author’s emphasis)  More details are needed as far as the selection process for board members; including whether the TIAA will commit to a minimum number of board positions that will be filled by non-TIAA Executive Board members.

In the February 14, 2014 letter to the HLC, the TIAA raised the issue of the speed at which the proposal was moving. The TIAA ended their recent offer letter to Thunderbird with a statement that seemed to imply a decision within 10 days.  It could seem that the TIAA was guilty of the same “rushing” that they previously criticized.  However, they have clarified that they simply wish for a response to the offer within 10 days, not that it must be a full decision. TIAA further stressed that they wish to be able to sit down with the Thunderbird Board to discuss the offer and work together with all constituencies to determine what is best for Thunderbird.

The primary reason this author reached out to the TIAA about their proposal was that, in many regards, it felt as if it could be classified as a request for “unconditional surrender” from the School.  This question was put forward very directly to the TIAA.  Their response was that they wish “to provide Thunderbird with the breathing room necessary for a time to heal and bring all constituencies back together. As stated in the offer, [the proposal] is meant to provide the school with the ability to take the time in looking toward any and all long-term solutions.”

For the student body, it is likely that there will always be some lack of transparency from the administration regarding any outside proposal.  Some of that stems from the more formal relationship between students and members of the administration.  The temptation that arises when an organization such as the TIAA appears is to suddenly stop thinking critically and take everything on face value.  Puerto Rican author Cristina Marrero states, “To question the world around us and all its complexities is not blasphemy, but simply using the mind God gave us for its intended purpose.”  Now, more than ever, we as students should be questioning any party claiming to represent our best interests.  The point of the questions posed to Mr. Gosselin and the TIAA was not to demonize either him or the organization.  Rather, it is to ensure that the best interests of the current and future students are being represented—not those of the alumni, whom, respectfully, have less at stake at this point in time than those of us who currently attend the school.  This author is not a flag bearer for Laureate, or any other organization for that matter.  The TIAA has made an honest and earnest effort to answer some tough questions.  On some fronts, their answers were forthcoming and positive.  On others, they were unable or perhaps unwilling to answer.  And other answers seemed to toe a party line rather than attempt to give a thoughtful and comprehensive response.  This author hopes the above helps the students to gain a better understanding of the TIAA as an organization and its proposal, from which they can draw their own conclusions.

And so we end with a quote from Shakespeare; “It is not in the stars to hold our destiny, but in ourselves.”


The practice of anonymous authorship is not something this publication will normally take part in. Due to the sensitivity of this article we felt the material needed to reach students. Please note that we will not make this a regular occurrence and that all material comes from reliable sources and the facts have been double checked by our staff.

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