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The Admissions Dilemma

Having just returned from a lengthy meeting with the dean of Birdwood Business School and the director of its development office, Janel Lehman sat down at her desk to gather her thoughts. As Birdwood's director of admissions, Lehman knew her recommendation to admit the daughter of a trustee and prominent businessman would not only have an immediate impact on the future of two applicants, but also might affect the capital campaign Birdwood had recently initiated. Additionally, Lehman realized that her decision would set a precedent upon which future admissions criteria could be based.

Birdwood Business School

Birdwood Business School had long been regarded as one of the premier business schools in the country. Like other top programs, the school relied heavily on the generous financial contributions of its alumni and other wealthy patrons to help finance the program and its continued development. To maintain its strong academic reputation and its elite status among business school programs, Birdwood attracted top faculty and provided cutting-edge resources and classes to its students. These efforts came at a hefty price, but they set Birdwood apart and allowed it to attract the best applicants and a long list of corporate recruiters year after year. To build and maintain a top program was expensive, and tuition alone did not cover a substantial part of the overall program cost.

To effectively cultivate the necessary contributions to finance a top-tier program, Birdwood maintained a development office that staffed four full-time and four part-time employees. The office kept a database of both personal and professional information on all graduates dating back to the first graduating class in 1957. This information was used to develop relationships with current and potential donors. For the wealthiest alumni, the office kept personal files, the contents of which reflected years of fundraising efforts. Birdwood believed this detailed and long-term commitment to fundraising resulted in the largest donations. During the previous capital campaign, the department's efforts brought in several $10 million commitments, which helped build a new library and computer centre and funded several full scholarships for outstanding applicants. Coincidentally, several recipients of this scholarship would graduate from Birdwood in the spring.

A year earlier, Birdwood had initiated a highly publicized multiyear capital campaign. One of the most-talked-about alumni within the development office was Joseph Lipscomb, class of 1970. After graduating from Birdwood, Joseph had started LipCo, one of the largest oil services companies in the world. At the company's stock price of $70, Joseph had a net worth estimated to be $800 million. Birdwood's development office had been courting him for the past year and had made significant strides toward securing a potentially sizable donation. He had been invited to join the board of trustees two years earlier and had taken an active role on the policy committee. In a private conversation that followed one of these meetings, Birdwood's dean had learned Joseph wanted his daughter Caroline to follow in his footsteps and attend Birdwood. Caroline had been working at LipCo since her graduation from Yale three years prior, and Joseph hoped that one day she would have the interest and skill set to take over control of the company.

The Dean's "Watch List"

At the request of the dean and the director of development, Lehman pulled Caroline Lipscomb's application from the pile of packets that made up the "Dean's Watch List" and began reading through it once again. Similar to its peer institutions, Birdwood maintained a list of candidates who were personally sponsored by distinguished alumni, faculty members, and influential outside patrons. This list, known within the office as the "Dean's Watch List," was handled with extreme sensitivity. While some of the candidates on this list met the school's academic standards for admission, many did not. This latter group of candidates posed a dilemma for the office each year. For various reasons, Birdwood had historically admitted several candidates from this list, often applicants who would not have been accepted based upon their academic merit. If an applicant from this list were denied admission, the dean would make a personal phone call to the applicant's sponsor about the decision and the reasoning behind it. From Birdwood's perspective, greater communication with the sponsor might mitigate any damage to the school's relationship with that person.

Birdwood's application process was highly competitive. The school received roughly 3000 applications annually for just 300 spots. So far, this year's applicants had been extremely competitive on all fronts. Historically, those admitted to Birdwood averaged a 3.5 GPA, a 690 GMAT score, and four years of work experience and were quite active in their communities. There were subsets of candidates within the applicant pool, which helped add context to the evaluation process. This process was typical for most business schools. The basis for these subsets could include gender, ethnicity, cultural background, and previous work experience. The disparity between the average grades and test scores of the different groups could often be significant, so the school made an effort to recruit the top candidates from each subset. While the admissions office might find it easy to fill a class with "white male bankers" or "Indian engineers," the goal was to deliver a class of candidates that would best contribute to the program's rich diversity and academic excellence. Falling short in either area would undermine the school's effort to provide its students with a rich and well-rounded experience.

3.0 GPA/580 GMAT

Caroline Lipscomb's 3.0 GPA at Yale University and her 580 GMAT score were below both the school average and that of the admitted females in the class. On the positive side, Caroline had played field hockey at Yale and served as vice-president of her sorority for two years. Caroline was also active in her community and, according to her references, had outperformed her peers during her three years at LipCo. Clearly, Caroline was intelligent and driven, two essential qualities in all Birdwood students. Yet while Caroline's application was good, given the strong current class of applicants, she fell short of being admitted based upon her own merit.

As Lehman sipped her coffee, she thought about Birdwood's relationship with LipCo and how it had weakened over the past few years after the company had stopped recruiting at Birdwood in favour of other top programs. Lehman could not avoid thinking about the $10 million donation Joseph Lipscomb had made to Yale when Caroline graduated in 2002, a gift that funded the Yale Center for Investment Management.

Lehman was well aware of the importance of large donors in any capital campaign and had seen Birdwood's capital campaign goals. These goals were based upon widely used fundraising statistics that showed that during a typical capital campaign, roughly 2.4 percent of a school's graduates provided 78 percent of the funding.

Exhibit 1 The Admissions Dilemma Percentage of Alumni Percentage of Goal 0.08% 40.0% 0.41% 56.7% 0.79% 66.0% 2.39% 78.0% 5.32% 83.3% Alumni Contribution Data and Forecast I 97.6% of alumni I 2.4% of alumni (a) Percentage of Alumni Who Contribute and Percentage of Goal They Provide (b) Expected Breakout of Capital Campaign