REPOSTED from the Times of Texas.
When Jeff Sandefer bought a small plane, he chose one of the few models equipped with a parachute designed to protect occupants by lowering the aircraft to the ground in an emergency.
That desire to avoid unnecessary risks has guided his investments as well. After graduating from the University of Texas and Harvard Business School in the 1980s, Sandefer formed an oil company but eschewed the wildcatting style of his father and grandfather.
Instead, armed with $1 million from an investment firm, he subleased from Exxon, Chevron and other major oil companies in the Gulf of Mexico. Sandefer figured that a small, nimble and cost-conscious independent could make a go of wells where the majors couldn’t.
He was right. In four years, Sandefer Offshore Co. turned $500 million in profits, cementing his reputation as a savvy entrepreneur and giving him time and money to devote to his passion for education.
But in pursuing that passion, especially when it comes to public higher education, Sandefer has sometimes been more wildcatter than cautious player. And lately, the results haven’t been pretty.
Sandefer-flavored policies embraced by Republican Gov. Rick Perry and some members of the governing boards of the University of Texas and Texas A&M University figure prominently in a debate over the future of higher education in the state.
Critics of those policies, including some lawmakers, alumni and leaders in civic and business affairs, say philanthropic support, faculty recruiting and the national standing of the state’s universities are at risk. Even some GOP stalwarts, such as Peter O’Donnell Jr., a Perry contributor and major donor to UT-Austin, are crying foul.
At the root of the controversy are several “breakthrough solutions” outlined by Sandefer and endorsed by Perry at a summit of public university governing boards held by the governor three years ago. Among the recommendations: award bonus pay to teachers based strictly on student evaluations, put more emphasis on teaching productivity and less on research, split budgets into separate amounts for research and teaching, and treat students like customers.
The A&M System adopted Sandefer’s bonus-pay model and assigned red or black numbers to faculty members based on how much money they cost and how much they bring in. That drew an embarrassing rebuke in October from the Association of American Universities.
In recent months, Gene Powell, chairman of the UT regents, and Perry have drawn fire from the Longhorn faithful for actions and pronouncements that seemed to take pages from Sandefer’s lesson plan. The governor is pushing regents to freeze tuition for four years and to develop bachelor’s degree programs costing no more than $10,000 — a price point that would require a substantial online component, which Sandefer predicts is part of a coming “tsunami” of higher education reform.
Powell, elected chairman by fellow regents after the governor’s office signaled its wishes, hired an adviser to the regents, Rick O’Donnell (no relation to Peter O’Donnell Jr.), who previously was president of one of Sandefer’s charitable foundations, an adviser to another and, like Sandefer, a critic of much academic research. O’Donnell was later dismissed when he charged that officials were suppressing a list of costs and revenues for each teacher at the UT System’s nine academic campuses.
Another sign of Sandefer’s behind-the-scenes role: Emails, released under the Texas Public Information Act, indicate that he knew Alex Cranberg and Wallace Hall would be appointed to the UT board weeks before the governor’s office made a public announcement.
Last week , in a rare interview, Sandefer denied having a role in the governor’s selection of Cranberg, Hall and another UT regent, Brenda Pejovich, who, like Sandefer, is on the board of the Texas Public Policy Foundation, a think tank that helped organize the governor’s May 2008 summit for regents.
“That’s the governor’s job,” Sandefer said of the appointments. “That’s not my job.”
Asked whether he provided advice on the appointments to Perry, to whom he has given more than $400,000 in campaign contributions since 2000, he demurred.
“I’m going to be careful about private conversations, whether they’re with a student, or a teacher, or with you,” he said. “So if somebody asks my opinion, I’m happy to offer it. But picking regents is not my job.”
He acknowledged knowing Cranberg through the oil business for more than 20 years, noting that Cranberg had worked for General Atlantic, the investment firm that put money into Sandefer Offshore. Sandefer and Hall were both students at UT 30 years ago, when Sandefer was studying petroleum engineering, but “weren’t close friends,” he said.
Sandefer said he planned to “tone down the provocative questions for a while” but also sent a letter to friends declaring that higher education needs an overhaul, that a defense of research “cannot be used to hide waste and inefficiency” and that higher education insiders cannot be allowed “to frighten donors and alumni as a way of avoiding tough questions about faculty productivity and costs.”
Harsh words on academia
“Most of the rewards in the profession go to writing narrowly focused academic research articles that few read, the vast majority of which would never, and I want to stress never, be supported by the market,” he said.
“And the whole corrupt enterprise survives parasitically only by siphoning vast amounts of tuition and cross subsidization unbeknownst to parents, students and taxpayers.”
Sandefer predicted that the enterprise would collapse as for-profit institutions and online courses gain ground.
“Here’s a hint,” he said at the gathering. “If your subsidized costs are $30,000 and climbing and your competition’s costs are between $10,000 and $1,500 and declining for the same product, and your subsidies from endowments and from state government aid are flat at best or declining, you are doomed. Purely by the economics, you’re doomed.”
Asked about that speech, Sandefer said: “Maybe I was on a pessimistic bent on that day. I like the optimistic bent that you’re right on the cusp of a real revolution of changing things,” with the advent of sophisticated educational software, blended learning that includes classroom and online formats, and apprentice-based learning.
Sandefer wears multiple hats in the field of education: teacher, curriculum developer, philanthropist and co-founder of a graduate-level business school and a private elementary school, both in Austin. Three years ago, he sold all of his business interests, including a company that managed more than $1 billion in energy-related investments, to focus on education.
A passionate philanthropist
Jeff Davis Sandefer was born in Abilene, and education is in his DNA. His great-grandfather, Jefferson Davis Sandefer, was president for 31 years of Hardin-Simmons University, a private school in Abilene, and is buried on the campus. The grandfather was named after the president of the Confederate States, Jefferson Davis, but the grandson got a shortened first name to break ties to the Civil War past while preserving the family tradition.
Sandefer, who is trim and looks younger than his 50 years, is partial to button-down shirts and khakis. He speaks in a rapid-fire style, sometimes stumbling over words in his eagerness to make a point.
Although he says he’d be happy living in a 3,000-square-foot house, he actually lives in Woodlawn, an 8,154-square-foot mansion in West Austin that has been the home of two former governors and that he has spent millions to restore. He reads all or part of about 250 books a year, and his library, split between Woodlawn and his office in downtown Austin, holds about 6,000 volumes.
Sandefer once started a company in Russia that employed local people selling soap and shampoo door to door just to prove that the Russians weren’t serfs in the post-Soviet era. Internal Revenue Service filings show that he has contributed more than $100 million to his Ed Foundation. He has pledged to give away multiples of that to exhaust his holdings by the time he dies.
The Ed Foundation donates to a variety of civic, religious and educational organizations. Records for 2009, the most recent available, show that the largest gift that year, $4 million, went to the Acton School of Business, which Sandefer co-founded.
He describes himself as “a Bill Buckley libertarian,” a reference to the late William F. Buckley, a conservative commentator who founded the National Review magazine. Sandefer dined from time to time at Buckley’s home and has served on the board of the Constitutional Enterprises Corp., the company that owns the stock in National Review, since 2007, filling a seat once held by former President Ronald Reagan.
“The reason I so admired Mr. Buckley was that he could debate an issue with passion while still respecting someone with an opposite position,” Sandefer said.
John Lawson, who serves on the board of the Ed Foundation, said Sandefer doesn’t seek the philanthropic limelight. In fact, Sandefer changed the foundation’s name from the Jeff D. Sandefer Foundation a few years ago.
“He didn’t want any credit for his gifts,” said Lawson, who was a fraternity brother at UT and remembers Sandefer as “our straight and narrow guy” who knew when to socialize and when to study.
A passionate business educator
Sandefer is also, by all accounts, a gifted teacher.
“He was awesome,” said Scott Uhrig, an Austin-based executive recruiter who took Sandefer’s class in entrepreneurship in 1993 at UT’s McCombs School of Business. “I probably spent more time on his class than all my other classes combined that semester. I still got a B, but it was worth it.”
Sandefer had a bitter and public falling-out with UT in 2002 after helping to build the nationally ranked entrepreneurship program. He disagreed with UT’s hiring of tenure-track faculty members rather than part-time teachers with real-world experience. He quit and fired off an email to alumni charging that teaching had been sold out for research.
“My view,” UT President Larry Faulkner said at the time, “is there’s no way to have a leading business school without a strong research component.”
Sandefer taught at the University of Oklahoma for a time and then at St. Edward’s University in Austin before co-founding the Acton School of Business in Austin. Acton is affiliated with Hardin-Simmons, and all of its instructors are successful entrepreneurs who teach part time.
“The great joy of my life is finding that student with that amazing gift and that drive to be an entrepreneur,” Sandefer said in an online video about his pledge to give away all his money. “And so I both teach and give back to entrepreneurship because it’s the right thing to do and because it’s the fun thing to do.”
He thinks some of Acton’s strategies should be used far more widely, including faculty pay based largely on student evaluations, an emphasis on teaching over research and a classroom style heavy on Socratic-style discussions involving case histories of actual companies rather than lectures.
Sandefer doesn’t pretend that Acton is the perfect model that the rest of higher education should follow. After all, it occupies an unusual niche in higher education.
Its 27 students take all of their classes together in a one-year, 90 -hour-a-week program culminating in a Hardin-Simmons MBA in entrepreneurship. Tuition runs about $50,000 a year. Some students, but not all, get full-ride fellowships from donors.
Students are not eligible for federal financial aid because Acton operates through a contract with Hardin-Simmons under which Acton provides all of the instruction, said Lanny Hall, president of Hardin-Simmons. It is technically not a satellite or branch campus.
The name of the school reflects its philosophy. Lord Acton was a Victorian scholar and historian who fought the notion of papal infallibility and promoted the study and advancement of freedom. His most famous quote: “Power tends to corrupt, and absolute power corrupts absolutely.”
The importance of political, religious and economic liberty is a running theme at Acton, whose required curriculum includes a class called “Life of Meaning.”
Teaching with a purpose for all ages
A sense of larger purpose also infuses the Acton Academy, a private elementary school founded by Sandefer and his wife, Laura. It currently operates out of a converted law office in West Austin, but negotiations are under way to acquire a new site in East Austin.
The school’s 18 students range in age from 6 to 10 and learn together in the same classroom, with a mix of discussions in the round and computer-based study using such software as Rosetta Stone, a foreign language program. It’s the antithesis of what Sandefer calls the “assembly line approach to schooling” on his blog, http://transformingeducation.tumblr.com .
Graphics on the wall sum up Sandefer’s view of how education, and life, ought to be pursued: “I am on a hero’s journey.”