Q&A / Carlene Miller
Years of Growth

After 19 years as vice president and treasurer of Pomona college, Carlene Miller will retire this summer. In March, Miller sat down with PCM’s Mary Marvin to talk about the substantial growth in the endowment during her tenure, new financial aid initiatives, congressional requests, the challenges facing the next treasurer, and the two best decisions she’s made in her life.

When you graduated from Smith College, there weren’t many women pursuing financial careers. How did you get your start?
I majored in economics at Smith, which was unusual in those days. When you go to a women’s college, you do everything—it’s not that men do this and women do that—so you figure out what you want to do and pursue it. After I got my master’s at the University of Wisconsin and while my husband was finishing his Ph.D. in physics there, I taught economics at a local high school. My mother was a teacher and my father a banker, so I guess it all kind of came together. I ended up working for the University of Wisconsin doing budget analysis and when we moved to California, I got a similar position in the UC President’s Office. Throughout my career, I’ve been able to tie my economics background to education, which is something I’ve always valued.

What brought you to Pomona?
I’d been working in the UC system for 16 years when I got a call from a recruiter about the position at Pomona. I think the fact that I went to Smith was very influential in my decision because I’d always appreciated that kind of small, residential liberal arts college. I tell people that the two best decisions I’ve made were to marry my husband and come to Pomona.

I’ve always had a more idealistic vision of what I’ve wanted to do. I like being associated with something I value as opposed to just thinking about the bottom line. On the other hand, I’m delighted by our endowment growth, but that’s not the be-all and end-all. The point of having a good endowment is being able to support the programs that are important to the College.

The growth in the endowment has been remarkable. Where does Pomona rank in terms of other college endowments?
We’re number one among colleges in terms of the value of our endowment per student. The endowment was $290 million when I came here, and it was $1.7 billion at the end of the 2007 fiscal year. Our operating budget also has grown. It was about $45 million when I started and is now $130 million. The endowment grew by 45 percent in one year in the late 1990s primarily because of our early investments in venture capital.

Pomona survived the collapse. What do you credit that to?
Smarts (laughs). I think our investment committee is very savvy, and we have a smart consulting firm, Cambridge Associates, that has advised us since 1980. They helped us think about how we could conserve the tremendous gains we made in the ’90s. We could have made a lot of money and then lost it, which is what happened to some colleges. But we did very well and lost very little because Cambridge advised and our investment committee listened. We have an aggressive policy in that we have about 90 percent of the endowment in equities and equity equivalents, and we wouldn’t do that without diversification. The other key is that we’re in very good quality investments. We’re fortunate we’ve been advised well and that our committee listens—it’s a wonderful marriage.

What ongoing programs are supported by the endowment?
We’re able to provide a world-class education to students for much less than the $80,000 a year it costs per student, which means that every student at Pomona benefits. When it comes to admissions, we’re totally need-blind and we fully fund documented need, which are two things that aren’t true everywhere. Our faculty salaries are very competitive in comparison with our peers, and I think we’re among the few institutions that have such a generous home loan program for faculty. We also have the flexibility to respond to new initiatives—this year we were able to eliminate loans in student financial aid packages, because of the size of our endowment. Just as important is the other principle of endowment management, which is ensuring intergenerational equity by making sure that future students have the same benefits from the endowment as our current students do.

With success, comes scrutiny—like the recent request from the U.S. Senate Committee on Finance for information about tuition, endowment, financial aid and other issues.
We were one of the 136 institutions that received a letter from Senators Max Baucus and Charles Grassley. The thrust of their letter was that they wanted us to spend more of the endowment and not raise tuition as much. A lot of people in the political and for-profit arena don’t deal with endowments and have a fuzzy understanding of what they’re about. Fundamental to the response we provided was an effort to educate them.

There was also some pressure to mandate an increase in the percent of the endowment spent to a minimum of 5 percent, the same amount required of foundations.
That’s not on the table anymore, but there still is pressure. Foundations are very different from colleges and universities. They don’t have the ongoing operational responsibility that we have. A foundation gives out one-time grants to a variety of organizations. Pomona does, however, have plans to increase the spending rate to 5 percent. It’s a five-year ramp up, which means an increase of .1 percent each year, until we reach 5 percent.

Where will the money go?
It’s all tied to the strategic plan, which was approved by the trustees last October. There is almost $1 million for new academic initiatives in next year’s budget, including a couple of new faculty positions and an increase in funding for stipends for chairs and program directors. We’re also increasing the amount for debt service, because we’re planning to issue a bond to help us with some new construction.

What are the biggest challenges you’ve faced at Pomona?
One of the things that became increasingly clear during my first few years was that there had been some neglect of the physical facilities, because we couldn’t afford to do as much as we should have been doing. That led to creation of the long-range renovation plan in 1998, which the buildings and grounds committee urged us to develop. I spent the summer of 1998 trying to figure out how to pull it together—not only which buildings to fix, but also how much it would cost and whether there was a plan to pay for it. It’s on a rolling 10-year basis and is updated every year, so it gives us a road map for the future. Marrying all of that was intellectually challenging and interesting.

What challenges will face the new treasurer?
There are several. The sciences were a focus in the ’90s, and now we’re turning to the arts, which haven’t been getting as much attention as they deserve. We’re going to have to continue to address issues associated with sustainability and trying to control or reduce our carbon footprint. We’re also into a period, as illustrated by the Baucus/Grassley letter, where people from the outside are beginning to ask very fundamental questions about how we do business. You can’t turn on a dime when it comes to rethinking some important processes, but we do need to try and anticipate what will be required down the line. Another challenge is just being able to thrive in a complicated world. There are a lot of uncertainties out there for everyone in higher education. It will be an interesting period that will have its own set of challenges. When I came here my predecessor was predicting doom and gloom. I’m not predicting that, but there will be many challenges, I’m sure.

CAO of Los Angeles Named as Pomona’s Next Treasurer
Karen Sisson ’79, who holds the top management job in Los Angeles’ city government, has been appointed vice president and treasurer of Pomona College effective July 1.

Sisson will take on the role of the College’s chief financial and investment officer at a time when Pomona is preparing to carry out an ambitious strategic plan involving major capital projects.

“I am thrilled and excited to have been selected for such an important position at an institution whose values I treasure and endorse,” Sisson says. “I look forward to the challenges ahead and to being a part of a great management team.”

As City Administrative Officer for the nation’s second-largest city, Sisson currently holds the city’s highest-ranking non-elected position, responsible for fiscal matters, including the city’s $7 billion budget. She is the first woman to hold the position, to which she was promoted in 2006 by Mayor Antonio Villaraigosa.

Along with her B.A. in international relations from Pomona, Sisson holds an M.B.A. from the University of Chicago.