Building
Knowledge
AMERICAN UNIVERSITY
2009–2010 ANNUAL REPORT
About the Cover
The 75,000-square-foot School of International Service building,
designed by renowned architect William McDonough and Partners,
opened May 14, 2010, at a ribbon-cutting ceremony attended by the
Board of Trustees. The eco-friendly building is constructed for LEED
Gold certification—the benchmark for Leadership in Energy and
Environmental Design.
Panels inspired by Buckminster Fuller’s Dymaxion map adorn the
building’s exterior. Fuller’s flat map more accurately portrays the
world than the traditional Mercator projection.
Table of Contents
From the Chairman of the Board of Trustees
2
From the President
3
Building Knowledge
4
Building a Community of Scholars
7
Building a Stronger City
21
Building Global Connections
31
University Administration
38
Board of Trustees
38
Financial Statements
39
From the CFO, Vice President and Treasurer 41
Report of Independent Auditors 42
Balance Sheets 43
Statement of Activities 44
Statements of Cash Flows 46
Notes to Financial Statements 47
From the Chairman of the Board of Trustees
At a time when many of the nation’s top universities are facing caution, cutbacks, and
retrenchment, American University is moving forward with confidence, commitment,
and results.
Our finances are solid—as outlined in this annual report. AU’s credit rating (Standard &
Poor’s) has been upgraded to A+, the Campaign for AnewAU has reached its successful
conclusion, and AU was ranked first (Cambridge Associates) among 150 reporting
institutions for the highest calendar year investment returns on our portfolio last year.
In support of our strategic plan, a vigorous academic commitment has been launched to
strengthen AU’s procurement of research grants and external support and to identify areas
with strong potential for academic collaboration. Meanwhile, our faculty scholarship and
creative achievements continue to reach new levels of prominence. And we have just opened
our new LEED Gold home for the School of International Service.
Equally gratifying is that, in addition to their daily efforts to build the best university possible,
AU faculty and staff donated more than a half million dollars during the last year’s annual
faculty-staff campaign—proving they strongly believe in where they work.
The infrastructure is solid, the achievements impressive, and the faculty and staff committed,
as we complete the first decade of the new millennium. The best is yet to come.
Gary M. Abramson
2
BUILDING KNOWLEDGE
From the President
It was another impressive year for American University as we began to implement our
strategic plan and continued our increasingly outstanding record of achievement.
AU students earned distinction as Truman and Udall scholars; as Pickering, Boren,
Skadden, and Robert Bosch Foundation fellows; as a Rhodes Scholarship finalist and a
student Emmy award winner. AU student-athletes earned a cumulative 3.37 GPA,
and our men’s and women’s diving team and wrestlers had the highest GPA in the nation
in their respective sports.
AU faculty earned prestigious grants from the National Institutes of Health and the
National Science Foundation; we launched partnerships with NBC News and Gannett,
hosted programming with the Smithsonian Institution, and unveiled the Center for Latin
American and Latino Studies as a natural fit, since more than 65 faculty are involved in
Latin American issues.
Our new home for the School of International Service makes a strong statement about
our enduring values and international commitment. As home to the next generation of
international leaders, the building’s LEED Gold status, green attributes, use of solar energy,
and water conservation practices all underscore a strong institutional commitment—as
we have pledged to become carbon neutral by 2020.
American University is proud of its achievements and cares about its community—
locally, nationally, and internationally. Enjoy the examples of that commitment in the
pages that follow.
Cornelius M. Kerwin
AMERICAN UNIVERSITY
2009–2010
3
Building Knowledge
earning from leaders has long been the cornerstone of the American University
experience. Professors such as intellectual property expert Michael Carroll,
cofounder of the landmark online licensing site Creative Commons, bring real-world
knowledge to the classroom. AU students, too, actively seek experience to complement
their academic studies. Most undergraduates pursue internships in Congress, at federal
agencies, and in nonprofit groups across our nation’s capital.
Carroll and AU’s dedicated students teach another important lesson about American
University: our recognition that as a community of scholars we have a duty to make the
world a better place. That lesson is also brought to life by many alumni. Jeff Franco,
executive director of City Year Washington, D.C., leads tutors, mentors, and role models
to make a difference in children’s lives while transforming schools and neighborhoods.
Anne Mahlum, founder of the nonprofit running club Back on My Feet, helps recovering
addicts lift their bodies, minds, and spirits.
Learning from leaders. Making the world a better place. That’s the foundation American
University is built upon. To think. To explore. To know.
4
BUILDING KNOWLEDGE
give students access to a
“ We
faculty of learning, stature,
curiosity, and influence. . . .
Students in turn question us,
push us, and make us better
at what we do.”
—Neil Kerwin, president of American University
“America reaps incredible
economic rewards because
we remain a magnet for
the best and brightest from
across the globe.”
—President Barack Obama, speaking July 1, 2010, at American University
6
BUILDING KNOWLEDGE
a Community of Scholars
partnership with the Smithsonian Institution. A commitment to world-class research.
A solid financial foundation and a campus plan that carefully balances the university’s
future needs with those of its neighbors.
Those are some of the highlights of the 2009–2010 year at American University.
It was also another banner year for student achievement. Students won a record number of
prestigious scholarships, including Boren, Bosch, and Truman awards. And in a year culminating
with the opening of the new School of International Service building—home of the largest such
school in the nation—every school of the university can justifiably point with pride to outstanding
academic accomplishments.
This year saw the Kogod School of Business jump 30 places in a national ranking and scholars
from the College of Arts and Sciences win Guggenheims and federal grants. The School of
Communication partnered with such organizations as NBC News, and a School of Public Affairs
research center captured an important national grant.
With the establishment of new cutting-edge research centers at the School of International Service
and the Washington College of Law—along with a groundbreaking interdisciplinary Latino studies
center—AU continues to expand on its tradition of scholarly excellence.
AMERICAN UNIVERSITY
2009–2010
7
a Solid Foundation
American University’s
scholarly pursuits rest on a
solid financial foundation.
In September 2009,
Standard & Poor’s (S&P)
upgraded AU’s revenue
bonds and its issuer credit
rating. S&P boosted its
long-term and underlying
ratings from A to A+ on
District of Columbia
revenue bonds issued for
AU while granting the same
upgrade to its issuer credit
rating. At the time of the
upgrade, only one other
private college or university
had been upgraded by S&P
that year.
Other financial indicators
are just as sterling. Don
Myers, AU’s CFO, vice
American University took part in the
U.S. Department of Veteran Affairs’
(VA) Yellow Ribbon GI Education
Enhancement Program. During the
first year of its participation in the
program, AU agreed to support up
to 18 veterans. With a matching grant
from the VA, veterans will be able to
attend AU at little or no cost.
Participation in the faculty-staff
campaign rose by 13 percent, from
596 donors last year to 685 this year.
Total gifts were $517,764.
8
BUILDING KNOWLEDGE
president and treasurer,
announced in April 2010
that Cambridge Associates,
in its “Comparative Asset
Allocation and Total
Return Report” for colleges
and universities for the
calendar year ending
December 31, 2009,
ranked American University
first among 150 reporting
institutions for the highest
calendar-year investment
return on its portfolio.
This news came as AU
surpassed the $200 million
goal of its AnewAU capital
campaign, in part through
the generosity of a
$1 million gift from Gary
Cohn, Kogod/BA ’82,
chair of the Finance and
Investment Committee on
the AU Board of Trustees,
and president and chief
operating officer of
Goldman Sachs.
As for the future, a priority
for AU’s developing 2011
campus plan—the 10-year
facilities plan required by
the D.C. government—is
student housing. AU now
has 200 students in triple
rooms, 200 others living
in university-leased housing
nearby on Massachusetts
Avenue, almost 500
more living on the Tenley
Campus, and others scattered in the surrounding
neighborhoods.
To address this demand,
the plan proposes housing
for 4,900 undergraduates
by 2020, about 900 more
than the university
currently houses. The
university would expand
Nebraska Hall and build
four residence halls on the
east campus (currently the
Nebraska Avenue parking
lot), three residence halls
on the south campus (near
the Letts-Anderson
pavilion), and two residence halls at the Clark
Hall site.
All proposed housing
would be within the
current university footprint, and plans are being
discussed in meetings
with members of the
surrounding community.
FIGHTING COPYRIGHT CHAOS
M
ichael Carroll sees the
artistry in copyright law.
“Every copyright lawyer I know
has a creative side,” said the
Washington College of Law
professor, himself an amateur
guitarist. “It’s the area of law
that deals with popular culture.
Music, movies, books. They
all realized they weren’t going
to be professional creators, but
they wanted to stay involved
in creativity.”
The dawning of the digital
age has led the arts and the
law to a crossroads, and
Carroll, a teacher, scholar, and
cofounder of the landmark
nonprofit online licensing site
CreativeCommons.org, is
helping direct traffic.
The son of William Carroll, a
government lawyer and now
adjunct professor at AU, Michael
Carroll worked as a journalist,
teacher in Africa, and in the
nonprofit world before going to
law school in the ’90s.
“We’re in the middle of
a big transformational
period in our culture
and history, and we
won’t even really know
what it means until
some later time. . . .
It’s really thrilling.”
“The story is I fought the law and
the law won,” he said. “I didn’t
really want to pursue that as
a career.” But in the nonprofit
world, he discovered, you need
an advanced degree, and a
law degree was both the most
flexible and the one he was best
suited for.
It was critically important to
Carroll that no matter what
he studied, it somehow be
intertwined with the budding
technology of the time, the
Internet. He quickly immersed
himself in cyber law, an umbrella
term for the myriad ways the law
responds to the Internet.
Seeking to bring some order to
the Wild West of information the
Internet had become at the turn
of the century, in 2001 Carroll
cofounded Creative Commons.
The nonprofit creates online legal
and technical tools that enable
people to copyright their work
for free.
“The copyright licenses that we
created have six basic options.
The most open is you can do
anything you want with this, as
long as you give me credit.
The most restrictive is you can
use this and make copies and
share it, but only if you give
me credit, you’re only doing it
noncommercially, and you’re
not changing it.”
Copyrights from Creative
Commons have become
ubiquitous on the Web. More
than 200 million links lead to
its license page, and in 2008
President Obama’s online
campaign page used one of
the organization’s copyrights.
“For me there were different
moments of fulfillment,”
Carroll said. “The first one
was when the New York Times
started telling people their
content was under a Creative
Commons license.”
The organization is now delving
into the worlds of education and
science, hoping to make it easier
for people to share their research
in a legal manner.
“We’re in the middle of a big
transformational period in our
culture and history, and we won’t
even really know what it means
until some later time. This is as
powerful as the introduction
of the printing press. It changes
the way we communicate, it
changes the way we think. It’s
really thrilling.”
AMERICAN UNIVERSITY
2009–2010
9
Victoria Kiechel, who teaches
Sustainable Cities and Sustainable
Design/LEED Training at AU’s
School of International Service,
received the 2009–2010 Most
Innovative Green Teacher of the
Year Award in recognition of her
efforts to highlight building design
from the perspective of sustainability
and find practical applications on
the AU campus.
James Girard, who teaches
chemistry in AU’s College of
Arts and Sciences, was named
a Franklin Fellow in the U.S.
State Department. His role is
to coordinate the U.S. report
on sustainability—focusing on
transportation, chemicals, mining,
and waste—to the United Nations.
10
BUILDING KNOWLEDGE
a Sustainable
Future
If a structure can epitomize
what a university stands for,
the School of International
Service’s new 75,000square-foot building amply
illustrates AU’s values.
“Our new home will go a
long way towards inspiring
our community to reach
new levels of global
responsibility and public
understanding,” said SIS
dean Louis Goodman. “It
will also inspire students
on multiple levels to engage
with the great issues
of our time, including
sustainability.”
The distinctive building
features a three-story atrium
and underground parking.
Environmentally friendly, it
has 3,230 square feet of
photovoltaic solar panels on
the roof to reduce reliance
on nonrenewable sources; a
passive solar air heating
system that warms up
air brought in from the
outside, reducing the need
for heating; natural daylight
and operable windows in
every office, which also
lower heating and cooling
system use; and a 60,000gallon cistern to collect
water for flush toilets.
The new building is a
perfect fit for one of the
nation’s most environmentally conscious institutions
of higher learning. AU
was the first university in
Washington, D.C., to enroll
in STARS (Sustainability
Tracking, Assessment, and
Rating System), an effort to
encourage sustainability
practices at colleges and
universities across the
country, and since the
1990s has followed a path
toward environmental
responsibility. After a
rededicated focus on the
original campus plan,
created by Frederick
Law Olmsted, AU was
recognized in 2004 by the
National Arboretum and
Botanical Garden Association, which designated the
campus as a public garden
and arboretum. Commitments to environmental
sustainability followed, and
in May 2010 AU pledged to
be carbon neutral by 2020.
“We already offset half of
our emissions by buying
renewable energy certificates in the same amount as
our electricity, which puts
us leaps and bounds ahead
of our competitors,” said
Chris O’Brien, who was
named director of the
newly created Office of
Sustainability in 2009.
REDEFINING DEVELOPMENT
A
re people “the poorest of the
poor” if they live on less than
a dollar a day?
debt. Together, they set out to analyze
the fashions and failures of decades
of development policy.
Is a country developing if its economy
is booming?
The problem they found is that
numbers can be misleading. A
country pushing to join the developed
world can appear on paper to be
making progress if aspects of its
economy are prospering. “Unless you
look at figures of inequity,” Broad
observed, “it can look good.”
The answers might seem obvious.
But sometimes, numbers don’t tell
the whole story. Robin Broad and
John Cavanagh have questioned
many of what they call the “myths
of development” in their effort to
understand how decades of
development policy have sometimes
done more harm than good.
The husband-and-wife team brings
both practical and scholarly expertise
to their recent book, Development
Redefined: How the Market Met Its
Match. Broad is a professor in AU’s
School of International Service with a
strikingly wide-ranging background.
She has, for instance, conducted
fieldwork among farmers in the
Philippines and also worked as an
economist at the World Bank and the
U.S. Congress.
Cavanagh is director of the Institute
for Policy Studies, a progressive think
tank, and an expert on Third World
Is a country
developing if
its economy is
booming?
Subsistence farmers, for example,
may not contribute much on paper to
a country’s economy. They may be
tilling a few acres of vegetables and
rice, but the harvest goes mainly to
feed their families—with, perhaps, a
few extra tomatoes or bags of rice
sold to neighbors at local markets.
They may earn so little in cash that it
amounts to less than a dollar a day.
Money isn’t circulating much. On
paper, it’s a grim picture. If their land
comes into the hands of the local
business elite or international corporations, things can start to look better.
Many small farms may combine into a
vast tract of sugarcane or pineapples
grown for export, bringing in foreign
currency and raising the gross
national product. The farmers,
meanwhile, may move to the cities
and earn more than a dollar a day.
Far away in Western offices the
numbers can be encouraging. But
Broad and Cavanagh have also done
fieldwork together, and they know that
those one-time farmers may end up
being squeezed into sprawling and
crime-ridden slums, struggling in
unhealthy conditions to earn cash that
doesn’t actually buy as much food as
they once grew. When that happens,
has a country truly improved?
Cavanagh and Broad have written
numerous articles together, and this
was their second book. “I love
collaborative writing,” said Broad.
“We don’t literally sit there and write
every word together, but you read
every word. You fight over every word.
You can’t get away with anything.”
AMERICAN UNIVERSITY
2009–2010
11
Student Scholars
AU president Neil Kerwin made
a rare double selection for the
President’s Award at commencement:
Seth Cutter (right) served as student
trustee to the AU Board of Trustees
during the 2009–2010 academic year
and also served a year as president
of the student government. Allison
Gold (left) melded her interests in
environmental advocacy, government,
conflict resolution, and the Middle
East in the Negev desert in Israel,
where she studied rainwater harvesting and wastewater management.
Both students were political science
majors in the School of Public Affairs.
In 2010, women’s basketball
team standout Michelle Kirk
was named to the Division I-AAA
Athletics Directors Association
Scholar-Athlete Team. The public
communication major was one of
only 10 female basketball studentathletes from around the country
to win the honor.
It was another outstanding
year for American University
students winning prestigious scholarships and
fellowships. Students won
a record number of Boren
and Bosch scholarships, and
AU celebrated its 10th
Truman scholar since 2000.
“At a time when more and
more applicants across the
country are competing for
nationally competitive
scholarships, AU students
continue to excel in an
impressive range of
competitions,” said Paula
Warrick, director of the
Career Center’s Office of
Merit Awards.
AU students won a dozen
Boren fellowships, which
provide up to $30,000 to
U.S. graduate students to
add area or language studies
to their education. Two AU
students won awards from
the Robert Bosch Foundation Fellowship Program, a
distinguished transatlantic
initiative that annually
offers 20 accomplished
young Americans the
chance to complete a
high-level professional
development program
in Germany.
Kelsey Stefanik-Sidener, a
political science major and
a 2010 Harry S. Truman
Scholar, plans to pursue
graduate training in law
and public health in
preparation for a career in
health law, communications, and advocacy.
Alexander Thorpe, a
student in the School of
International Service and a
2010 Udall scholar, will
focus his career on advocating for more sustainable
and livable cities.
As usual, scholar-athletes
distinguished themselves as
well. For the spring 2010
semester, student-athletes
earned a 3.37 grade point
average, matching the
highest single-semester
GPA in program history
since records began being
kept in 1995. Over a
third—88 out of 235
student-athletes—were
named to the dean’s list,
and 13 earned perfect
4.0 GPAs.
Among other scholarships
AU students won were a
Fulbright grant, George C.
Marshall undergraduate
scholarship, Morgan
Stanley Scholarship for
Study in Japan, Critical
Language Scholarship, and
Public Policy and International Affairs Fellowship.
An AU student was also a
Rhodes Scholarship finalist.
Boren scholarship winners Malina Keutel, Amber Jolla, Grant Livingston, Monica Sok,
and Amanda Osborn
12
BUILDING KNOWLEDGE
TURNING THE KEY ON LIFE BEHIND BARS
C
lasses at AU’s School of Public
Affairs don’t generally involve
poetry, fiction, and art.
But Robert Johnson (above, left) has
found an unusual way to engage
students with the disturbing realities
behind bars. The professor in the
Department of Justice, Law and
Society, who began using fiction in his
courses several years ago, coedited a
book with student Sonia Tabriz, SPA/
BA ’10 (above, right), that features
writing by AU students along with
fiction by prisoners and other writers.
Lethal Rejection: Stories on Crime
and Punishment is grim, poignant,
and chilling. The prisoners’ tales
provide an unvarnished look at what it
is to live and perhaps die in prison,
exactly the kind of insight Johnson
was trying to offer his students
when he began using fiction in his
SPA courses.
He often offers students the option of
replacing a traditional term paper or
take-home exam with creative writing,
and he has students in most classes
do ungraded “free writes,” a standard
creative writing exercise, in response
to readings and documentaries.
Some of his students have gone
on to publish their work in literary
magazines. Tabriz is one of them.
An honors student, she was so
moved by a freshman field trip in
Johnson’s class to a high-security
prison, the Maryland Correctional
Adjustment Center, that she began
working extensively with Johnson.
She now serves as volunteer managing editor for BleakHouse Publishing,
a small press Johnson founded that
focuses on justice.
“. . . it’s easier to
understand people
if you force yourself
to be them and
take on their voice.”
“In my teaching, I try to give voice to
prisoners and others on the fringes
of society,” Johnson said. Much of
his research has been based on
extensive interviews and participant
observation as he has tried to gain
a deeper understanding of the
prisoner experience. A few years ago,
however, he began feeling that using
research alone in the classroom
wasn’t enough.
So he started sharing the writings of
prisoners. He saw it as an extension
of a good interview: a way to
connect with the prisoners’ own
voices and points of view. The point
wasn’t to get students to sympathize
with the prisoners or argue their
innocence but to add depth to their
understanding of incarceration.
Students connected with his work,
and Johnson decided to try his own
hand at writing. It became, he found,
a means to express personal opinions
in a way that wouldn’t be appropriate
in scholarly writing.
As he began publishing in literary
journals, he also began to give
students the option to do creative
writing in class. One student, Dagny
Von Ahrens, CAS/BS ’10, even
performed an interpretive dance
as her final for his honors class.
Another student, Thais Miller, CAS/BA
’09, wrote a play that later appeared
in Lethal Rejection.
“A lot of time it’s easier to understand
people if you force yourself to be them
and take on their voice,” said Tabriz.
Johnson is also the author of two
collections of original poems, also on
justice issues, and has edited several
collections of stories and poems.
AMERICAN UNIVERSITY
2009–2010
13
New Centers
and Institutes
The School of Communication
formed a strategic partnership with
NBC News and NBC4 that will
enable faculty and students to
collaborate with NBC staff on media
projects and academic programs.
SOC has also partnered with such
organizations as Gannett.
The Center for Democracy and
Election Management in the
School of Public Affairs received
a $250,000 grant, making AU the
first-ever university to implement
the State Department’s Global
Connections and Exchange
Program, which links U.S. high
school classes with overseas
counterparts to tackle universal
issues such as gender equity,
health, environment, diversity,
and human rights.
14
BUILDING KNOWLEDGE
By 2050, one out of four
people in the United States
will be Latino. That demographic fact, highlighted by
Latinos replacing African
Americans in 2004 as the
country’s largest minority
group, has led to an explosion of academic research on
Latin American issues, from
U.S. foreign policy interests
to immigration.
With more than 65 AU
faculty members researching Latin American issues,
the founding of the Center
for Latin American and
Latino Studies is a natural
evolution. The center will
provide cutting-edge
research on issues confronting Latino communities in
the United States and Latin
American societies from
Mexico to Argentina.
“The Center for Latin
American and Latino
Studies at American
University is a rare
example of a regionally
based institute organized
on a campus-wide basis,
rather than under the
auspices of a single faculty,”
said Eric Hershberg, the
center’s director. “AU
will be at the forefront of
efforts to forge a truly
interdisciplinary intellectual
community devoted to
issues in Latin America
and Latino studies.”
Last fall, another newly
established international
research center, AU’s
ASEAN Studies Center,
sponsored its first event, a
conference on the strategic
relationship between the
United States and Malaysia.
The School of International
Service partnered with the
Association of Southeast
Asian Nations (ASEAN) to
establish the center, the first
of its kind in the U.S.
Two other schools have
established new centers
or institutes. Last year,
the Washington College
of Law inaugurated the
Center on International
Commercial Arbitration,
while the Kogod School
of Business founded
the Kogod Global
Management Institute,
an intensive one-week
program that focuses
on the critical importance
of emerging markets in the
global economy and the
business opportunities
they present.
“I hope that we help shape
the future of journalism.
If we do anything less, I’ll
be disappointed.”
SHAPING THE FUTURE
OF JOURNALISM
A
mid the grim statistics that
litter the ominous journalism
landscape—5,900 newsroom
positions cut in 2008 alone—
flickers a glimmer of hope:
flourishing nonprofits producing
exemplary stories.
At the nexus of this new world order
in journalism sits AU’s School of
Communication (SOC) Investigative
Reporting Workshop—recent winner
of a MacArthur Foundation grant.
With a bifurcated mission of producing
top-rate journalism while incubating
new models intended to shape the
future of the craft, the two-year-old
workshop already has established
itself as a key player in the changing
journalistic ecosystem.
“There is a kind of adventurism going
on. It’s really a thrilling time,” said SOC
professor Charles Lewis, the workshop’s cofounder and executive
editor. “I don’t know what it all means,
but we’re clearly on the cutting edge
of whatever is unfolding here. I hope
that we help shape the future of
journalism. If we do anything less, I’ll
be disappointed.”
If anyone can figure out where
investigative journalism is headed,
it’s Lewis, a former 60 Minutes
producer and the expert on journalism
nonprofits. Two decades ago he
founded the Center for Public
Integrity, a nonprofit dedicated to
“producing original investigative
journalism about significant public
issues.” It was a game changer. No
longer would investigative reporting
be the exclusive purview of big-city
dailies and television networks,
whose executives often target the
investigative desk when they set
out to trim newsroom fat.
Lewis went on to found other
journalism nonprofits, and today there
are upwards of 30 similar organizations churning out investigative news.
“There’s a diaspora of immensely
talented journalists with nowhere to
work,” he said. “They’re starting these
things themselves and becoming
publishers. It’s happening directly
because of the implosion of commercial newsrooms. The profession and
business of journalism are in crisis, so
it’s our job to assist.”
At SOC, Lewis hopes not only to
continue his life’s work effectively,
as he said, “investigating the
bastards,” but to create new ways
for investigative journalism to survive,
and possibly even thrive.
“We’re the only investigative reporting
or nonprofit center looking at new
models devoted to the future entrepreneurialism of investigative journalism,” he said. “I hope we become a
beacon of information about what
people are trying, and also create new
models that are useful around the
world. I have great hopes and
ambitions.”
So what makes a good investigative
journalist?
“As I look back, I think there was
something in my craw,” he said. “Mike
Wallace, when I quit 60 Minutes, said
that all investigative reporters are
angry. We started screaming at each
other using expletives, and I realized
there is something about investigative
reporters, that there’s a sense of injustice that things are not as they should
be. I always loved the description
John Kennedy gave of himself, ‘an
idealist without illusions.’ Investigative
journalists are not the grim reaper;
they actually do have a sense
of idealism because their sense of
idealism is offended. The gap
fascinates us.”
AMERICAN UNIVERSITY
2009–2010
15
Research
Several programs at the Kogod
School of Business have leapfrogged
their way up national rankings, including
a jump of nearly 30 places for Kogod’s
undergraduate programs, in the 2010
edition of U.S. News & World Report’s
“America’s Best Colleges” ranking.
James Thurber, director of the
Center for Congressional and
Presidential Studies at the School of
Public Affairs, was selected for the
2010 Walter Beach Pi Sigma Alpha
Award by the National Capital Chapter
of the American Political Science
Association. Past winners include
Senator Paul Wellstone (D-Wisc.) and
former ambassador to the United
Nations Jeane J. Kirkpatrick.
AU has seen a year of
renewed commitment
to research, starting
with the work of the
Research and Grant
Infrastructure Task Force,
demonstrating that
world-class scholarship
continues to be a focal
point at the university.
Convened by Scott Bass,
provost, and Don Myers,
CFO, vice president and
treasurer, the task force is
a key part of maximizing
AU’s research potential. The
group has been assessing
the current environment
for research by talking
extensively with faculty
and studying best practices
at peer institutions. More
than 300 people have
been involved in meetings
sponsored by the task
force, including a series
of town forums.
One new initiative, as
explained by Rosemary
Wander, vice provost for
graduate studies and
research, is to think outside
the traditional framework of
schools and colleges and
identify areas of common
interest—such as the
environment, communitybased research, or Latin
American studies—that
faculty can “cluster around.”
Other important grants
include a $1.2 million
multi-institutional grant
(AU’s portion is $520,000)
from NSF to three professors in CAS’s Department
of Mathematics and
Statistics—Jeff Hakim,
Josh Lansky, and Jeff
Adler—to explore with
colleagues at other
institutions a project in
representation theory.
Commitment to research is
also reflected in grants that
university researchers have
won over the past year.
Among the marquee grants
AU received was a $1.5
million National Science
Foundation (NSF) award
to the School of Education,
Teaching, and Health in
the College of Arts and
Sciences (CAS) to develop
math teachers for District
of Columbia schools.
Separate National Aeronautics and Space Administration grants, totaling
more than $1 million, were
awarded to CAS physics
researchers Richard Kay
and Richard Berendzen. A
$200,000 Ford Foundation
grant went to the School
of Communication’s Pat
Aufderheide of the Center
for Social Media for the
center’s Future of Public
Media Project.
CAS professors Josh Lansky, Jeff Adler, and Jeff Hakim
16
BUILDING KNOWLEDGE
RE-ENVISIONING A LIFE’S WORK
A
merican University painting
professor Don Kimess was out
of town when water began spewing
from a burst pipe. For two weeks,
it filled his home until, with more
than four feet of water sloshing
through his painting studio, it burst
through the walls and into the yard.
That’s when a neighbor realized
what was happening.
His life’s work was under water.
Kimes, who has taught at the College
of Arts and Sciences since 1988, had
long engaged his students in discussions of time, nature, culture, and the
importance of embracing the accidental. Suddenly, “it was not an academic
abstraction. It jumped up and bit me
in the face.”
Everything was gone. All of his
artwork, family photographs, videotapes of his children, even the slides
of his artwork. “Nature took everything
back. It did not feel beautiful.”
What would he do? The answer came
as a question during a lecture: Have
you ever painted through pain? Kimes
decided to embrace the pain of the
flood and its aftermath by, in essence,
re-envisioning his life’s work.
He would use the destroyed images—
the washed out photographs, the
waterlogged slides—to create
images based on the “strange beauty”
that remained.
“The flood turned
out to be a gift. . . .
This is the strongest
work I’ve ever done.”
He had always been intrigued by
the intersection of nature and time
with culture, and had found inspiration
over the years in his regular visits
to Pompei.
Now he had his own ruins. What
could he make of them?
“The destroyed photos are almost
white. They have a little bit of structure, hints of color—but almost
nothing is left on them that can be
recognized,” he said. “I decided to
digitize that destroyed image, blow it
up, and print it out on canvas.
“If an area is white, I might say, ‘That
ought to be yellow.’ If an area is blue,
I might push that darker.”
By taking what life handed him
and making it his own, he created
lush abstractions where colors
seem to swirl and bleed into each
other. The images are both meditative
and insistent, with names that
reflect the notion of transience: “We
Once Were You.” “It Was.” “Promise
and Conclusion.”
“There’s a line from a play that says
every creative event that ever happened in the history of the world was
an interruption, unexpected and
unplanned. That idea about chance
and change—I talk about that in terms
of [my students’] lives, their work, and
a way to approach making things.”
It’s a lesson he forced himself to take
to heart, as well. The result has been a
series of critically acclaimed paintings
that are both masterful and inspiring.
“The flood turned out to be a gift,” he
said. “This is the strongest work I’ve
ever done.”
AMERICAN UNIVERSITY
2009–2010
17
a Digital Future
After the crippling snowstorm last winter that all
but shut down Washington,
D.C., AU president Neil
Kerwin thanked the AU
community for its resilience
in keeping the university
running, largely through
utilizing AU’s digital
infrastructure.
Composer Fernando Benadon of
the College of Arts and Sciences,
Department of Performing Arts, was
awarded a 2009 Guggenheim
fellowship, in part for his debut album
Intuitivo, in which he took improvised
solo recording sessions from seven
musicians into the studio and wove
a series of cohesive compositions.
“We have seen a significant
increase in the use of
technology and online
services, as people have
continued to work from
home,” Kerwin noted.
“The Office of Information
Technology support team
has continued to work at
the 24/7 Network Operations Center on campus
and also at home throughout the storm . . . and
the Center for Teaching,
Research, and Learning has
been working with faculty
to support their needs.”
Indeed, during the storm
Kogod School of Business
students held a Skype call
with a doctor who planned
to build a medical lab in
Tikrit, Iraq; School of
Public Affairs professor
Howard McCurdy carried
on his Science and Technology class online using
Blackboard’s discussion
board; and professors and
students across the university kept working while
most of the region ground
to a halt.
Such technical savvy reflects
the university’s ever-evolving
online sophistication.
Whether it’s the AU home
page adding increased video
capability and the usergenerated AUpedia, or the
university’s ever-wider
forays into social media,
exemplified by events such
as American Forum
meeting a broader audience
on Twitter and Facebook
and the first-ever streaming
of commencement speeches,
AU’s interactive presence
has expanded exponentially.
The Web Marketing
Association recognized the
innovative american.edu
site by naming it “Best Web
Site of Industry” in the
education category. AU
was the first institution of
higher learning to win in
this category since the
award’s inception.
In July 2009, Peter Starr,
formerly a professor of
French and comparative
literature at the University
of Southern California,
became the new dean of
AU’s College of Arts and
Sciences.
David Gregory ’92 (left) at SOC’s American Forum
18
BUILDING KNOWLEDGE
Students tweeting and texting at commencement
GIVING ARTFULLY: ROBERT AND ARLENE KOGOD
T
he generosity of Robert Kogod
’62 and his wife, Arlene, has left
an indelible imprint on the cultural
landscape of Washington, D.C. But
nowhere is their philanthropy more
important than at American University,
where the recently expanded Kogod
School of Business doubles as a
cutting-edge educational facility and a
a world-class art museum.
Indeed, the Kogod School of Business
is one of only a half dozen other
business or professional schools—
including Harvard, Columbia, and the
London School of Economics—that
can boast their own art collections.
Last spring, the $14 million building
expansion, which included a substantial gift from the Kogods, became
the first AU structure built entirely with
philanthropic dollars. More than 25
donors funded the expansion.
The 20,000-square-foot expansion
more than doubles the size of the
business school. The expansion
includes the following:
• the Financial Services and
Information Technology Lab,
equipped with a trading wall
that features a stock ticker and
news feed, and 37 workstations
• the Kogod Center for Career
Development, the focal point of
the first floor
within the budget for the project, he
decided, was to build a collection
of limited-edition prints.
• seven new classrooms, two of
which are outfitted for video
conferencing and other modes
of connectivity, and three new
breakout rooms and three
student lounges
The art gives an overview of postwar
schools and styles: conceptual,
mystical, minimalist. The range of
artists represented is also broad:
art world “names,” emerging talent,
and the accomplished but lesserknown, drawn from the United
States and around the world.
The 20,000-squarefoot expansion
more than doubles
the size of the
business school.
Now, with an art collection newly
donated by the Kogods for the
building expansion, the business
school has more than 200 pieces
of art gracing its classrooms, halls,
and public spaces.
“I wanted to appeal to a younger
audience and expose students to the
highest-quality works possible, by
some of the best modern and
contemporary artists,” Robert Kogod
says. The best way to accomplish this
On the wall of the main staircase,
lyrical, earth-toned abstractions by
American master Robert Mangold
softly glow. Across the way, the
exuberant, hard-edged colors of
two works by Sol LeWitt introduce
a very different aspect of abstraction.
This contrast in mood and method is
repeated throughout the corridors and
larger spaces, where pieces by artists
already in the history books hang with
compelling works unfamiliar to all but
hard-core art lovers.
“The question is,” says Kogod,
reflecting on the collection’s ultimate
impact, “students are surrounded by
art—will that give them a wider frame
of reference?”
Sol LeWitt’s “Stars” (above) hang in a
classroom in the new Kogod School of
Business expansion.
AMERICAN UNIVERSITY
2009–2010
19
“Our teaching uses the city of
Washington as a laboratory for
learning, and the service that
we do as part of our mission
touches every community . . . ”
—Neil Kerwin, president of American University
20
BUILDING KNOWLEDGE
a Stronger City
t’s called AU Park for good reason. American University fits in perfectly with its leafy, wellmanicured neighborhood. With its beautiful, open campus—graced by more than 2,000 trees
and a garden-like setting—AU is Washington’s only university arboretum. As neighbors who visit its
weekly farmers’ market on the quad or enjoy its wide variety of cultural offerings can attest, the
campus offers a rich, inviting presence.
Cultural attractions range from an award-winning play at the Greenberg Theatre or a world-class
concert or exhibit at the Katzen Arts Center to a stimulating lecture at the Osher Lifelong Learning
Institute at AU or a Pulitzer Prize–winning author speaking as part of the Smithsonian Institution’s
Resident Associates—and they’re all available to American University’s neighbors.
Community service has always been part of the university’s DNA, starting with the thousands of
hours students spend each year preparing meals or fixing up houses or painting schools, engaging
in a variety of volunteer activities during the annual Freshman Service Experience. Whether it’s the
College of Arts and Sciences boosting the number of D.C.’s qualified math teachers or alumni from
all the schools getting involved in organizations such as City Year Washington, D.C., AU enriches,
and is in turn enriched by, its neighbors and the greater Washington community of which it is
such a vital part.
AMERICAN UNIVERSITY
2009–2010
21
a Tradition of
Volunteerism
If you think AU’s annual
Freshman Service Experience is a one-off opportunity
for the school’s incoming
students to get a taste of
community volunteering,
you may want to think
again. Not that the 19th
edition of the program,
whose theme was “Our
Home, Our D.C.,” wasn’t
impressive.
A record 640 students put
in more than 14,000 hours
of hard work at 46 sites
before classes started last
fall. Over three days they
canvassed D.C. neighborhoods with opinion
surveys, prepared meals,
AU’s School of Communication
joined with New America Media to
organize the first Washington, D.C.,
Ethnic Media Awards, to honor
excellence in reporting.
22
BUILDING KNOWLEDGE
cleaned national parks, and
worked with senior citizens
and children.
AU students planned a
vegetable garden to teach
kids about sustainability.
All in all, an impressive
performance for a program
that started in 1990 with
only 30 students.
• At City Gate, a community organization that
serves Washington’s
Trinidad neighborhood,
they committed to
mentoring youngsters.
But for a few freshmen,
that was not enough.
Last October, seven groups
received $500 grants from
the student-run Eagle
Endowment to continue
their volunteer work in the
community. Among the
funded ventures:
• At Bancroft Elementary
School in Mt. Pleasant,
• In Columbia Heights,
the Latino Federation
of Greater Washington
got help in managing
gentrification through
grassroots activities.
• In Southeast D.C.,
Facilitating Leadership
in Youth (FLY) at Barry
Farm benefited from a
pledge to help build
a studio where kids
can express themselves
through poetry and
dance.
The opening of the school
year also occasioned
another AU volunteer
tradition: the Washington
College of Law’s seventh
annual In My Backyard
service day. More than 200
WCL students, faculty, and
staff volunteered their
services at D.C. organizations and nonprofit groups,
including the Community
for Creative Non-Violence,
Martha’s Table, and D.C.
Habitat for Humanity.
CELEBRATING 30 YEARS
ON THE AIR
W
AMU 88.5 FM’s Diane Rehm
may be a nationally known
interviewer with an audience of
2.2 million, but she’s first and
foremost a Washington treasure
and an important member of the
American University and D.C.
community.
then to be prepared to listen
so that you’re not jumping ahead
to the next question you have
in mind, but rather to create a
genuine conversation by listening
to what that person has had to
say,” Rehm said. “If I can do that,
I think I’ve done my job.”
In 2009, the Peabody Award–
winning Rehm celebrated 30
years on the air. Yet her ascension
to media stardom was an unlikely
one. As a 37-year-old wife and
mother, she started volunteering
at WAMU, the NPR station
licensed to American University,
in 1973. Six years later she
became host of Kaleidoscope,
a local show geared toward
people in the home.
Each week, Rehm’s producers
pour through up to 250 books,
searching for subjects important
to her audience.
“I inherited the program from a
woman I respected a great deal,”
Rehm said. “For the first few years
I was hesitant to do anything other
than what she had done. Then I
kind of got bored and I thought,
‘Either I’m going to make this
program my own or I’m going to
get out,’ because it was just not
grabbing me.”
In 1984 WAMU hired a producer
for the newly configured broadcast, and The Diane Rehm Show
was born.
“Even though my voice is
different, even though the
pace is different, even
though I don’t allow the
hotheads to take over,
people tune in because
it’s reliably informative.”
“I began to concentrate far more
heavily on current affairs, be they
political, scientific, historical,
medical, everything that was in
the news,” said Rehm, who now
has five full-time producers and
one half-time one. “It is an attempt
to be conversational, it’s an
attempt to be inquisitive without
being impolite, it is an attempt to
inform the audience and represent
the audience.
“The key to being a good interviewer is not only to prepare, but
“Even though my voice is different,
even though the pace is different,
even though I don’t allow the
hotheads to take over, people
tune in because it’s reliably
informative,” Rehm said. “People
know that when they tune in,
they’re not going to hear people
yelling at each other. They’re going
to hear thoughtful conversation.”
Just as strongly identified as an
important voice for the D.C.
community is Rehm’s WAMU
colleague Kojo Nnamdi, host of
the award-winning The Kojo
Nnamdi Show. Nnamdi has been
named a “Washingtonian of the
Year” and one of the “150 Most
Influential People in Washington”
by Washingtonian magazine. His
show often focuses on local and
regional politics.
In 2010, Nnamdi’s show won the
InterAction Award for Excellence
in International Reporting and the
James Beard Foundation Award
for Best Webcast or Radio Show,
which recognizes the show’s
focus on culinary topics. Awards
in 2009 include Best Talk Show
and public affairs awards from the
Chesapeake Associated Press
Broadcasters Association and the
Gracie Award for Outstanding
Public Affairs Program in a local
market from the American Women
in Radio and Television.
AMERICAN UNIVERSITY
2009–2010
23
Community
Voices
Last summer, AU’s School
of Education, Teaching, and
Health partnered with the
United Planning Organization
to bring 12-year-olds from
low-income neighborhoods
in D.C. to campus for two
six-week sessions. The
goal: inspire the students
to attend college.
The story of Washington,
D.C., is more than Capitol
Hill and K Street. There are
hundreds of stories to tell,
as students in innovative
courses and professors
conducting research beyond
the marbled halls of
Congress well know.
That’s why Professor Angie
Chuang of AU’s School of
Communication (SOC)
sent students in her Race,
Ethnic, and Community
Reporting class all over the
D.C. area, from Langley
Park, Maryland, to
Anacostia and Columbia
Heights, in search of the
rich human stories that
would bring these places on
the map to life.
This same search for D.C.’s
stories prompted filmmaker
Students watching firsthand documentaries
24
BUILDING KNOWLEDGE
SOC professor Angie Chuang
in residence Nina ShapiroPerl, in her Documentary
Storytelling course, to team
up with anthropology and
film students to help small
nonprofit organizations tell
their stories through the
words of the people they
serve. The films will help
the nonprofits raise
awareness about their
programs and raise funds.
Chuang and Shapiro-Perl’s
courses gave rise to AU’s
Center for Community
Voices, linking SOC, the
Department of Anthropology in the College of Arts
and Sciences (CAS), and
the University Library. The
center looks for innovative
ways to capture and
document the voices of
Washington, D.C., of the
“working people’s Washington,” said Shapiro-Perl.
It is this other Washington
that also interests Sabiyha
Prince, an anthropology
professor in CAS. A
cultural anthropologist
whose recent work has
focused on her hometown’s
changing neighborhoods,
such as Shaw, Trinidad, and
Petworth, Prince said:
“Frequently how you feel
about [changing neighborhoods] is affected by how it
impacts you. If you’re a
middle-class black person
and you share in certain
tastes, you may be happy
to see the impact. But you
may also be very resentful
to see the traditional
community you grew up
in become whiter.”
Students in the community voices class
ADDING MATH TEACHERS TO D.C. SCHOOLS
T
he math is discouraging: In
2007 only 9 percent of eighthgraders in D.C. public schools
qualified as proficient or above
proficient in mathematics. Perhaps
as disconcerting, only 43 percent
of “core subjects” math lessons
in D.C. public schools are taught
by qualified teachers, according
to the D.C. Office of the State
Superintendent of Education.
But a new partnership between
Math for America D.C. and American
University aims to change that
equation. With a $1.5 million grant
from the National Science Foundation
(NSF), the partners will make
qualified math teachers available
for D.C.’s public and public charter
secondary schools.
“AU has a long history of educating
and placing exceptional teachers in
Washington, D.C., schools,” said
Sarah Irvine Belson, dean of AU’s
School of Education, Teaching, and
Heath, or SETH.
“Partnering with Math for America
strengthens our connection to D.C.
schools and underlines AU’s commitment to serving our community,” Irvine
Belson said.
with degrees in math or related
disciplines. The fellows were selected
in a competitive process.
AU is the only D.C.-area school to
partner with Math for America and
one of only 10 partner universities
nationwide.
Fellows commit to teaching in D.C.
public and public charter schools for
four years after their training. The
program plans to recruit 34 fellows
between 2009 and 2013.
James H. Simons, mathematician and
president of Renaissance Technologies Corp., founded Math for America
in 2004 to improve math instruction in
U.S. public schools through recruiting,
training, and keeping successful
secondary school math teachers.
“The support from NSF will be a huge
boost for math education in D.C.,”
said Maxine Singer, Carnegie president emeriti and principal investigator
of the grant. “Research shows that
rigorous mathematics education in
secondary school correlates with
success in jobs and college.”
The grant, made possible by the
American Recovery and Reinvestment
Act of 2009, covers tuition, stipend,
and mentoring costs for the first 14
fellows who are college graduates
As a program partner, AU—through
SETH and the Department of
Mathematics, also a part of AU’s
College of Arts and Sciences—will
provide fellows with an intensive
graduate education culminating in
an MA in secondary school math
teaching and certification to teach in
D.C. schools.
“The mission of the Math for America–
D.C. program is aligned with AU’s
strategic commitment to improving
D.C. schools, and we are thrilled to be
involved,” said Irvine Belson.
Sophia Lallinger (above), a 2010 Math for
America fellow, teaches a numeracy class at
Oyster-Adams Bilingual Middle School in D.C.
AMERICAN UNIVERSITY
2009–2010
25
Back Locally
After the District of Columbia
government cut Sunday hours
at public library branches, the local
Shakespeare Readers Group
found itself without a home. AU
stepped up and offered the group
space at Bender Library.
AU’s Washington College
of Law hosted a moot court
competition for local high school
students to teach them about
their constitutional rights.
AU graduates have a way of
gravitating to community
service, whether it’s guiding
mentors and role models to
where they’re needed or
directing a vital part of
D.C.’s artistic landscape.
Take Jeff Franco, SIS/MA
’97, Kogod/MBA ’05. As
executive director of City
Year Washington, D.C.,
Franco leads tutors,
mentors, and role models
in their mission to make a
difference in children’s lives
and transform schools and
neighborhoods. City Year
gives people ages 17 to 24
an opportunity to provide a
year of full-time service to
the community.
“I have always been
attracted to the idea of
leaving the world better
than you found it, which is
what drew me to international development, as well
as volunteer opportunities
within my community and
church,” Franco said.
The passion to get involved
also led Courtney McSwain,
SPA/MPP ’06, to join
Local Initiatives Support
Corporation (LISC), a
nonprofit organization
that tackles issues from
community development
to affordable housing to
educational access. At LISC,
McSwain is responsible for
proposal development and
corporate donors.
“It’s great to know that
even if I’m working in an
office in Washington,
D.C., it’s helping students
across the country get
excited about changing their
communities,” she said.
Community service took
on another form for Molly
Smith, who in 1976 earned
an MA in performing arts
from AU’s College of Arts
and Sciences. She took on
a campaign to build a new
theatre complex at Arena
Stage, culminating in the
Arlene and Robert Kogod
Cradle in fall 2010. The
new 200-seat performance
space will complement
Arena’s two existing stages,
which are being substantially renovated.
“This is a defining moment
in the history of one of
America’s most important
cultural institutions,”
said Smith, Arena Stage’s
artistic director.
Jeff Franco ’97, ’05 (left) with two members of City Year Washington, D.C.
26
BUILDING KNOWLEDGE
FOSTERING A PLACE WHERE CURIOSITY NEVER RETIRES
P
erhaps no program better
epitomizes American University’s
dedication to the community than
OLLI at AU—the Osher Lifelong
Learning Institute. The program,
founded in 1982, offers study groups
and classes on topics from politics
to music to history.
For the second consecutive year, the
institute offered a series of School of
International Service–themed classes.
Ambassador Anthony Quainton,
distinguished diplomat in residence,
spoke on foreign policy challenges
facing the Obama administration and
summed up his experience with OLLI
students this way: “The audience is
made up of a broad cross-section of
well-informed senior citizens, most of
whom have had extensive experience
in international relations. Many are
former government officials. They are
smart, articulate, and engaged.”
Clearly, OLLI at AU, part of a nationwide network of institutes across
the country, lives up to its motto:
“Curiosity Never Retires.”
“The audience is
made up of a broad
cross-section of
well-informed senior
citizens . . . They
are smart, articulate,
and engaged.”
The organization, formerly known
as the Institute for Learning in
Retirement, was renamed in 2005
after an initial $100,000 grant from
the Osher Foundation. The grant
helped buy equipment such as
hearing assistance for classrooms,
large-screen TVs, computer
projectors, and laptop computers.
Funds from a second grant were
devoted to advertising the program.
“All of a sudden we started growing
by leaps and bounds,” said Anne
Wallace, OLLI’s executive director.
“This really started to propel us in
new directions.”
Those grants were a prelude to a
much larger gift, a $1 million grant
in 2008 from the Bernard Osher
Foundation that allowed a wider range
of class offerings in more locations for
a growing number of students. OLLI
at AU became eligible for the gift
by hitting the target of 500 enrolled
participants. The organization
will become eligible to request an
additional $1 million when it doubles
that size.
AMERICAN UNIVERSITY
2009–2010
27
Talented young opera singers and
accompanists from around the
country have the opportunity to
study with professionals at an
annual summer workshop that
started last year at AU. The
Washington National Opera
Summer Institute at American
University is part of a partnership
between AU and the Washington
National Opera.
This year, more than 140
AU students volunteered
several hours a week at seven
sites across D.C. as part of
D.C. Reads.
Community
Involvement
a Class Act
At American University,
community involvement is
as much a part of the
curriculum as research
papers and final exams.
That’s why history professor
Kathleen Franz and her
students took on the task of
developing a plan to create
up to 25 exhibits at
Arlington National
Cemetery and Arlington
House, where Robert E.
Lee once lived.
“People come and they
know about Arlington
House and they know
about Kennedy’s grave
and the changing of the
guard, but there are so
many sections of this place
that nobody thinks about
visiting. We’d like to tell
the stories of the nurses’
section, or the chaplains’
section, or the astronauts
who are here,” said Emily
Weisner, CAS/MA ’07,
now a park ranger at
Arlington House and a
former student of Franz’s.
Another AU class provided
publicity assistance for Just
Neighbors, a Northern
Virginia nonprofit that
provides legal services to
low-income immigrants
and refugees. Gemma
Puglisi’s School of Communication class developed a
public relations strategy for
the group, creating a
database of media contacts,
a promotional video, and a
social networking site. The
class even landed an
Park ranger Emily Weisner ’07 giving a tour
at Arlington House
28
BUILDING KNOWLEDGE
interview with the director
on a local TV news show.
And the involvement of five
Kogod School of Business
students and their professor,
H. Kent Baker, was vital
to the launch of Sunflower
Bakery, a nonprofit based
in Potomac, Maryland,
devoted to helping developmentally disabled adults
learn new job skills. The
Kogod team, part of the
Applied Business Practicum,
developed a business plan
and market niche: produce
only products that meet the
highest kosher standards.
At AU, now as in the past,
community involvement
remains the highest standard
of all.
Sunflower Bakery cofounder Sara Milner (right)
with a trainee
RUNNING FOR HOPE
I
n the darkness and drizzle of a
dreary March morning, life was
looking bright to Chris Moskowitz.
Though the sun had yet to rise, his
forehead was drenched with sweat.
He had just returned to Clean and
Sober Streets, the shelter he currently
calls home, from a jog with Back on
My Feet, a nonprofit running club
founded by AU alumna Anne Mahlum,
SOC/MA ’03 (above, center), to help
recovering addicts lift their bodies,
minds, and spirits.
Started in Philadelphia in 2007, the
organization unveiled its Washington
chapter in March 2010 with an early
morning run through the empty
streets of the capital.
“I used to be in excellent shape,”
said Moskowitz, 38. “I’m really
looking forward to getting back
to where I was—in everything. I’d
like to get back in shape and find
a job.”
Running as a catalyst for substantive
social change may strike some—
particularly nonrunners—as odd.
But Mahlum learned the sport’s
therapeutic power as a teenager
dealing with her own problems, and
it’s a lesson she never forgot.
“There are so many metaphors that
surround it,” she said. “The discipline
it takes to be a runner is extraordinary.
If you’re going to go out and run 10
miles and you haven’t trained, you’re
not going to make it. If you’re going to
take shortcuts, it never works. The
same thing holds true in life. You just
have to keep moving forward.”
Washington is Back on My Feet’s third
chapter. Mahlum conceived of the
idea while living in Philadelphia, where
her running route took her past
a group of men hanging out near
a shelter every morning.
“I remember looking back at them
and thinking, ‘I’m cheating them,’”
she said. “I’m running by these guys
every morning, moving my life forward
physically, spiritually, mentally, and
emotionally. This is the best part of my
day, and I’m leaving these guys in the
exact same spot.”
And so she contacted the shelter to
see whether any residents would like
to join a running club, and she sent
out e-mails to everyone she’d ever
known asking for donations of shoes,
shirts, or money.
As it turned out, nine of the shelter
residents signed on. From those nine
and one volunteer—Mahlum—has
grown an organization whose budget
was more than $3 million last year.
Before the D.C. chapter opened, 650
volunteers and 200 shelter residents
were Back on My Feet members.
Washington joined Baltimore and
Philadelphia, with Boston soon to
follow and one day, perhaps, New
York and Los Angeles.
AMERICAN UNIVERSITY
2009–2010
29
“Democracy is a system of
freedoms . . . let us not be
afraid of participation . . .
let us not be afraid to give
up power, because in reality,
reaps
incredible
weAmerica
are not
giving
it up. We
rewards because
areeconomic
giving
it back.”
we remain a magnet for the
”
—Michelle Bachelet, first female president of Chile,
speaking at commencement 2010
best and brightest from
across the globe.”
—President Barack Obama, speaking July 1, 2010,
at the new School of International Service building
30
BUILDING KNOWLEDGE
Global Connections
ake a stroll across AU’s bustling campus, with students gathered from more than 140
nations, and the whole world fills your ears. French, Spanish, German. Korean, Chinese,
Arabic. All within sight of the School of International Service’s stellar new environmentally sustainable
building, home of the largest school of international service in the country.
On such a globally connected campus, it’s no surprise that over half of AU students study abroad.
What might surprise you is the passion so many AU people—students, faculty, and alumni—bring
to global causes.
It could be a Kogod alumna “tweeting” to raise money for a school in Africa. Or Washington College
of Law students and their professor traveling to Copenhagen to participate in climate talks. Or
School of International Service and School of Public Affairs students pitching in to help Haitian
earthquake victims. It could be School of Communication students teaching Middle Eastern high
school kids underwater photography for an ecology project. Or a College of Arts and Sciences
alumna raising the AU flag at a Red Cross station in Baghdad. Whatever cause the AU community
gets involved in, one fact stands clear: American University is building global connections.
AMERICAN UNIVERSITY
2009–2010
31
on Global Issues
Michael Black of the College of
Arts and Sciences won a Fulbright
fellowship for teaching and conducting
research at Sankalchand Patel College
of Engineering in Visnagar, India.
Claudio Grossman, dean of the
Washington College of Law, was
reelected chair of the United Nations
Committee against Torture. He also
was reelected to the board of the
International Association of Law
Schools and is currently the only
dean from an American university
to serve on the board.
32
BUILDING KNOWLEDGE
When AU students travel
abroad to study, they do
more than sightseeing.
Norwegian-American
cooperation to fight
global climate change.
Just ask David Hunter,
who teaches international
environmental law at AU’s
Washington College of Law
(WCL). In December
2009, Hunter led six WCL
students to the United
Nations climate change
summit in Copenhagen,
where the students sat in
on climate-talk negotiations
and participated in
environmental group
strategy sessions.
This dedication to the
international community
is hardly surprising for a
university ranked second
among medium-sized
colleges and universities
in the number of Peace
Corps volunteers. More
than 50 AU alumni
currently volunteer
around the world.
A few months earlier, at the
Norwegian Polar Institute
in Tromsø, Norway, two
School of International
Service students were part
of a newly established
partnership between AU
and the Norwegian
Embassy to enhance
AU also sets the standard
for alternative break
programs. Instead of
heading to the beach,
many AU students opt
to tackle social justice issues
in such places as Colombia,
Bangladesh, Zambia, and
Nepal. “Social justice is
always central to our
mission,” said Shoshanna
Sumka, coordinator
of AU’s Global and
Community-Based
Learning. “We go
beyond building houses.”
That’s why the AU
program, praised by U.S.
News & World Report
as a “strong example of
schools that focus on
new and innovative social
justice issues,” is a model
for such programs around
the country.
It’s only fitting, then, that
when alumna Michelle
Risinger, CAS and SIS ’07,
became assistant station
manager of the Red Cross’s
station in Baghdad—a
job she calls “simultaneously exhausting and
rewarding”—she brought
along an appropriate
memento to display at the
nearby U.S. Army base:
an AU flag.
GIVING VOICE TO THE SILENCED
T
his past spring saw the
culmination of a cross-disciplinary
exploration of the arts, history,
memory, and identity—all originating
from a forgotten play penned by
prisoners in a Nazi ghetto.
The project began in 2008, when AU
theatre professor Gail Humphries
Mardirosian (above, left) was awarded
a Fulbright grant to teach at the
Academy of Performing Arts in Prague.
Soon afterwards, Mardirosian learned
of a play written by Zdenek Elias, a
playwright who had been imprisoned
by the Nazis at Terezin, a ghetto near
Prague where Jewish artists, musicians, and scholars were clustered
and allowed to practice their art, until
they died of disease or malnutrition or
were loaded onto the transports.
The play, Smoke of Home, couched
metaphorically as a story of prisoners
during the Thirty Years’ War, was an
emotional look at life within walls
and the dreams of a vanished home.
Astounded by the prisoners’ ability
to create and practice their art under
such oppressive circumstances,
Mardirosian decided to direct the play
as the artistic component of her year
abroad, and AU students traveled to
Prague during spring break 2009 to
participate in the experience.
aspects of the project beyond their
class—acting, singing, helping with
production lighting.
When Mardirosian returned to AU for
the 2009–2010 academic year, she
brought with her an expanded vision
of what could be done in a year of
teaching and learning. Although
staging the play at AU was the focal
point, the Terezin project reached out
well beyond the performing arts.
Meanwhile, the project grew to include
a choral performance of Songs of
Children, a musical adaptation of
poems written by children of Terezin;
discussions with the audience and
visiting experts; behind-the-scenes
collaborations between AU and the
Embassy of the Czech Republic; a
workshop for local high-school
students; as well as a library exhibit,
film screenings, and poetry readings.
With the help of Pam Nadell, director
of the Jewish Studies Program,
Mardirosian developed and taught
an honors class that attracted
students from all disciplines. Those
who were used to academic research
papers found themselves stretched
in new ways.
The students heard from guest
lecturers, read papers, and viewed
films from the time and then had to
“come up with a creative way to
demonstrate ownership of the
materials,” incorporating music,
movement, and visuals. Students also
provided background research to help
performers deepen their understanding of the play and participated in
At the end of the boundary-stretching
experience, the students were steeped
in the history and arts of a ghetto they
once knew nothing about. But they
had also learned much more—about
humanity, morality, justice, and
education. And the ideas planted
continue to seed new projects.
“Teaching this course has been one
remarkable journey,” says Mardirosian. “This was a multi-layered
educational experience. The goal was
to reach out internally and externally
with the story of Terezin, and we’re
still doing that.”
AMERICAN UNIVERSITY
2009–2010
33
to Global Needs
Celeste Wallander, a professor
in AU’s School of International
Service, serves in the Office of the
Undersecretary of Defense for Policy
as deputy assistant secretary of
defense for Russia/Ukraine/Eurasia.
Esther Kisaakye ’09, an
alumna of AU’s law school,
was named a member of
Uganda’s supreme court.
To catch a glimpse of how
the university community
responds to the international
call for help, take a look at
these snapshots of how AU
students and alumni reacted
to the devastating earthquake in Haiti that killed an
estimated 230,000 people
and left a million homeless:
• Peace activist Amy Gopp,
SIS/BA ’94, helped raise
$1 million for emergency
aid in less than a month.
“I credit SIS for the work
I do today,” she said. “I
learned at a young age
what it means to be part
of a global community,
and that I have a responsibility to give back.”
• Randy Smith, Kogod ’11,
bought a plane ticket to
Port-au-Prince with no
plan or place to stay. But
he quickly found ways to
help. During his
weeklong spring break
stay, he helped build a
makeshift school for
orphans in the mostly
destroyed city.
• The U.S. ambassador to
Haiti, Kenneth Merten,
SPA/MPA ’86, on his
third tour of the country
when the earthquake
hit, defended Haitians
against charges that they
became violent as the
situation deteriorated:
“The reality is, the
Haitian people have
behaved with tremendous
grace and dignity,” he
said. “Most have lost
everything they ever
had. They’ve lined up
peacefully for food,
they’re dealing with huge
levels of uncertainty and
a lot of personal loss,
and I’m not sure how
Kenneth Merten ’86 (left), U.S. ambassador to Haiti,
at a disaster site in Port-au-Prince
34
BUILDING KNOWLEDGE
many other nations on
the planet would deal
as well.”
• SIS student Ari Katz
also wanted to travel to
Haiti to help. He ended
up hitching a ride on a
plane piloted by actor
John Travolta. “I felt like
I had to do something
directly to help the
Haitians,” said Katz, who
helped medical teams set
up operations. He also
treated trauma victims
himself by providing
first aid.
Unfortunately, the earthquake destroyed the
building in which just a
year earlier AU’s School of
Public Affairs had begun an
innovative public policy
program with Haiti’s
central bank. For now, that
program is on hold.
Ari Katz ’11 (left) helping with the Haitian
relief effort
“Diane’s pioneering
contributions to the
law of accountability
and war crimes make
her a perfect choice
for the Office of War
Crimes issues.”
AU alums also answered the call
to provide aid for Africa:
• Social media company
Thankfulfor.com, a Web site
developed by a tech company
cofounded by Jenn Consalvo,
who earned an MBA at the
Kogod School of Business and
an undergraduate degree at the
School of Communication,
took part in a “Tweetsgiving”
event that helped raise money
for an African school.
• Former NBA player Kermit
Washington, SIS ’73, AU’s
most famous athlete, fasted
for a second year to raise
awareness and donations for
the organization he founded
in 1995, Project Contact
Africa. “You try to identify
with the people you’re
helping,” said Washington.
His organization operates a
school, health clinic, and food
distribution center in Kenya.
PURSUING A
PASSION FOR
INTERNATIONAL
JUSTICE
T
o find dedication to international justice, look no further
than AU’s Washington College
of Law (WCL).
WCL professor Diane Orentlicher
was named deputy of the Office
of War Crimes by the U.S.
Department of State. Her office
advises Secretary of State Hillary
Clinton and helps formulate U.S.
policy regarding atrocities and
support for war crimes accountability in the former Yugoslavia,
Rwanda, Sierra Leone, Cambodia,
Iraq, and other regions.
Orentlicher is codirector of WCL’s
Center for Human Rights and
Humanitarian Law, and from
1995 to 2004 she served as
faculty director to WCL’s War
Crimes Research Office. (Her
colleague, WCL professor
Jonathan Baker, also joined the
Obama administration. Baker
was named chief economist at
the Federal Communications
Commission.)
Kermit Washington ’73
“Diane’s pioneering contributions
to the law of accountability and
war crimes make her a perfect
choice for the Office of War
Crimes issues,” said WCL dean
Claudio Grossman.
Grossman himself was unanimously
reelected as chair of the United
Nations Committee against Torture,
to which he was first elected in
April 2008. The committee
monitors compliance with the
Convention against Torture, which
comprises independent experts
elected from 146 countries.
“The Convention against Torture
embodies the conviction held by
men and women from the most
diverse backgrounds and cultures
that a world without torture is
achievable and depends on us,”
said Grossman.
Grossman also received the 2010
Henry W. Edgerton Civil Liberties
Award from the American Civil
Liberties Union of the National
Capital Region. Past winners
have included U.S. Supreme
Court justices William Brennan,
Harry Blackmun, and Ruth
Bader Ginsburg, as well as
Archbishop Desmond Tutu and
Salman Rushdie.
AMERICAN UNIVERSITY
2009–2010
35
for a Global
Audience
Five School of Communication
students helped mentor
a multicultural group of 60
Western and Middle-Eastern
high school students, teaching
them to videotape their
experiences at Ocean for Life
in Florida and California.
If you think you’ve seen this
movie before, you’re right.
Once again this year,
international film legends
who got their start at AU
added to their credits.
Among them was Barry
Levinson, SOC/BA ’67,
director of Diner, The
Natural, Avalon, and the
Academy Award–winning
Rain Man. Levinson, who
received the 2010 Laurel
Award for Screen honoring
lifetime achievement in
outstanding motion picture
writing, also produced
Homicide: Life on the Street.
He received the award from
the Writers Guild of
America, West.
Another Academy Award–
winning AU alumnus,
Russell Williams II, SOC/
BA ’74, joined an elite
group of “Oscar-Winning
Black Men” honored by the
Los Angeles Urban League.
Williams, now a producer
and distinguished artist in
residence at AU, won
Academy Awards for his
sound work on Glory and
Dances with Wolves.
The New York Times
Magazine highlighted
another Hollywood
standout, Nancy Meyers,
SOC/BA ’70, director of
such films as It’s Complicated, Father of the Bride,
Something’s Gotta Give,
and What Women Want,
devoting a cover story to
her. The Times noted that
Meyers makes movies that
“both feature and speak to
middle-aged women”—
rare indeed in a market
dominated by youthoriented action movies.
Student filmmakers, too,
distinguished themselves.
For the third straight year, a
former student from AU’s
School of Communication
won a Student Academy
Award. Kim Spurlock,
SOC/MA ’97, won an
Oscar in the narrative
category for her film Down
in Number 5, which follows
the story of a terminally ill
coal miner. Previous SOC
student film winners were
Lauren DeAngelis, MA ’08,
and Laura Waters Hinson,
MFA ’07.
Olia Onyshko (left) and Sarah
Farrhat (right), both SOC/MFA
’09, screened their documentary,
Three Stories of Galicia, at the
Cannes Film Festival.
Barry Levinson ’67
36
BUILDING KNOWLEDGE
Russell Williams II ’74
TAMING WILDLIFE PHOTOGRAPHY
W
hen it comes to ethical behavior,
some wildlife photographers are
downright uncivilized. And those
same nature-loving photographers
can leave behind a messy ecological
footprint of trash and chemicals.
Enter the School of Communication’s
Chris Palmer (above), author of
Shooting in the Wild: An Insider’s
Account of Making Movies in the
Animal Kingdom and director of
SOC’s Center for Environmental
Filmmaking, and his colleague,
filmmaker Larry Engel.
While praising the high ethical
standards of many wildlife filmmakers,
Palmer decried the “Shark Week”
mentality that demonizes animals,
what he calls “Fang TV and
Nature Porn.”
“Wildlife filmmakers face three main
ethical challenges,” Palmer said.
“First, are audiences deceived and
misled by these kinds of films, and if
so, does it matter? Second, are wild
animals harassed and disturbed
during filming, and if so, does that
matter? And third, is conservation
advanced by these films? Do they
make a difference?”
“Filmmakers want
to be sustainable,
but few tools exist
to help them do this.”
Likewise, some filmmakers are
eco-challenged. Fuel for travel,
unrecycled batteries, the accumulated
waste generated by a crew—it all
adds up to a hefty carbon impact.
Which got Engel, a filmmaker with
more than 30 years’ experience,
thinking. After running into a British
filmmaker who made the first carbonneutral film for National Geographic,
Engel was encouraged by Palmer and
Pat Aufderheide of SOC’s Center
for Social Media to put his ideas on
sustainable filmmaking into action.
That was the origin of the Code
of Best Practices in Sustainable
Filmmaking, created by SOC’s
Center for Social Media and Center
for Environmental Filmmaking, along
with Filmmakers for Conservation.
“Filmmakers want to be sustainable,
but few tools exist to help them do
this,” said Engels, who helped write
the code. The code includes checklists that provide specific goals and
steps to take toward sustainability
and a way to add up CO2 emissions
and waste produced over the life of a
film’s production. That total can then
be offset by, for example, funding
wind power.
SOC’s film and media division has
already adopted the code and actively
strives for carbon neutrality. After all,
it’s the civilized thing to do.
AMERICAN UNIVERSITY
2009–2010
37
University Administration
Cornelius M. Kerwin, President
Scott A. Bass, Provost
Donald L. Myers, CFO, Vice President and Treasurer
Mary E. Kennard, Secretary to the Board of Trustees, Vice President and General Counsel
Thomas J. Minar, Vice President of Development and Alumni Relations
Gail S. Hanson, Vice President of Campus Life
Teresa Flannery, Executive Director, University Communications and Marketing
David E. Taylor, Chief of Staff
Phyllis A. Peres, Interim Senior Vice Provost and Dean of Academic Affairs, Vice Provost for Undergraduate Studies
Richard M. Durand, Dean, Kogod School of Business
Louis W. Goodman, Dean, School of International Service
Claudio M. Grossman, Dean, Washington College of Law
Larry Kirkman, Dean, School of Communication
William M. LeoGrande, Dean, School of Public Affairs
Peter Starr, Dean, College of Arts and Sciences
William A. Mayer, University Librarian
Board of Trustees
Gary M. Abramson,* Chairman
Jeffrey A. Sine,* Vice Chair
Gina F. Adams*
Stephanie M. Bennett-Smith
Richard Beyer
Patrick Butler*
Edward R. Carr*
Jack C. Cassell*
Gary D. Cohn*
Pamela M. Deese*
Jerome King Del Pino
David R. Drobis*
Marc N. Duber*
Hani M. S. Farsi*
Ronald L. Frey*
C. A. Daniel Gasby
Thomas A. Gottschalk
Gisela B. Huberman*
C. Nicholas Keating Jr.*
Cornelius M. Kerwin*
Margery Kraus*
Gerald Bruce Lee*
Charles H. Lydecker*
Robyn Rafferty Mathias*
Alan L. Meltzer*
Regina L. Muehlhauser*
Leigh A. Riddick
Arthur J. Rothkopf
Peter L. Scher*
Mark L. Schneider
John R. Schol
Neal A. Sharma*
Virginia Stallings
* alumna or alumnus of American University
38
BUILDING KNOWLEDGE
Financial Statements
From the CFO, Vice President and Treasurer
As we enter a new decade, American University can be proud of our accomplishments during the last
10 years and feel confident in knowing that we are poised to build on those successes. Our prudent
decisions and financial management strategies have not only allowed us to remain strong during
the challenging economic times of recent years but put us in an advantageous position to face the
challenges of the future as well.
Financial statements summarizing the university’s operating results for the year ended April 30, 2010,
are presented on the following pages and provide additional detail on another very successful year
for American University. Net assets increased by $147 million to $696 million, and total assets now
stand at $1.1 billion. This is a significant milestone in that it is the first time in the university’s history
that our financial statements reflect assets greater than $1 billion. As of April 30, the value of our
endowment was $385 million. During calendar year 2009, our endowment return was 33 percent,
which ranked number one in an independent report of more than 150 colleges and universities.
We continue to be guided by our new strategic plan, coordinating our facilities development
initiatives to support both academic and student life priorities. The 2011 campus plan, a blueprint to
meet our facilities priorities during the next decade, will be submitted to the District of Columbia for
approval by year’s end. Highlights of the plan include additional on-campus housing for both current
and new students and a new home for the Washington College of Law at Tenley Campus, to respond
to its continued and sustained growth. These projects will be the largest ever undertaken by American
University, resulting in dramatic improvements to our campus proper and allowing us to deliver
unparalleled academic and student services.
The new School of International Service building was completed and went into full operation for fall
2010 classes. Before the year’s end, we expect the building to receive LEED (Leadership in Energy
and Environmental Design) Gold certification for its environmentally friendly features. Currently,
architects are commissioned and working on plans for renovation of the McKinley building to serve as
the new home for the School of Communication. With its completion, we will have delivered new or
renovated facilities for all six schools and colleges of American University.
Momentum increased this year in the university’s efforts to reduce its impact on the environment. AU
published its climate action plan, targeting carbon neutrality by 2020—an ambitious goal, decades
ahead of most peer institutions. We halved our carbon emissions by purchasing renewable energy credits
from wind power for 100 percent of our electricity, making AU the sixth largest buyer of renewable
energy in all of higher education. And we became the first university in the world to own a Vegawatt, an
innovative renewable energy technology that will convert used cooking oil from our dining facilities into
electricity and hot water to be used in the Mary Graydon Center. Our commitment to sustainability is
firmly embedded in our strategic plan and embraced campus wide by students, faculty, and staff.
We remain motivated by the significance of our work and inspired by our mission. In the year ahead,
we look forward to the challenges before us as we continue our efforts to ensure academic growth and
continued financial stability for the university.
Sincerely,
Donald L. Myers
AMERICAN UNIVERSITY
2009–2010
41
REPORT OF INDEPENDENT AUDITORS
To Board of Trustees of American University:
In our opinion, the accompanying balance sheets and the related statements of activities and of cash flows present
fairly, in all material respects, the financial position of American University (the University) at April 30, 2010 and
2009, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of
the University’s management. Our responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
July 27, 2010
42
F I N A N C I A L S TAT E M E N T S
BALANCE SHEETS April 30, 2010 and 2009
(In thousands)
2010
2009
ASSETS
1 Cash and cash equivalents
$
180,335 $
2 Accounts and University loans receivable, net
24,512 3 Contributions receivable, net
10,016 4 Prepaid expenses and inventory
1,971 5 Investments
407,128 6 Deposits with trustees/others
54 7 Deposits for collateralized swaps
2,180 8 Property, plant, and equipment, net
427,884 9 Deferred financing costs
2,682 10 Interest in perpetual trust
12,866 11 Total assets
$ 1,069,628 $
LIABILITIES AND NET ASSETS
Liabilities:
12 Accounts payable and accrued liabilities
$
44,498 $
13 Deferred revenue and deposits
23,196 14 Indebtedness
255,875 15 Swap agreements
37,269 16 Assets retirement obligations
4,205 17
Refundable advances from the U.S. government
8,246 18 Total liabilities
373,289 Net assets:
Unrestricted
19 General operations
7,141 20 Internally designated
154,142 Capital
21 Designated funds functioning as endowments
256,371 22 Designated for plant
125,329 23 Total unrestricted
542,983 24 Temporarily restricted
72,126 25 Permanently restricted
81,230 26 Total net assets
696,339 27 Total liabilities and net assets
$ 1,069,628 $
87,366
24,841
22,283
2,053
372,465
7,240
13,266
389,151
2,796
10,064
931,525
46,134
18,610
255,875
49,096
4,202
8,097
382,014
6,388
135,742
197,179
90,362
429,671
42,930
76,910
549,511
931,525
See accompanying notes to financial statements.
AMERICAN UNIVERSITY
2009–2010
43
STATEMENT OF ACTIVITIES Year ended April 30, 2010
Unrestricted Net Assets
General
Internally
(In thousands)
Operations Designated
Capital
Total
Temporarily Permanently
Restricted
Restricted
Net Assets
Net Assets
Operating revenues and support
1 Tuition and fees $392,327 $
976 $
- $393,303 $
2 Less scholarship allowances(79,578) (7,564)
-(87,142)
3 Net tuition and fees312,749 (6,588)
-306,161
4 Federal grants and contracts 611 16,674
- 17,285
5 Private grants and contracts 9,518 7,441
- 16,959
6 Indirect cost recovery 1,451
-
- 1,451
7 Contributions 8,800 2,876 4,035 15,711
8 Endowment income 748 7,013
- 7,761
9 Investment income 2,103
278
155 2,536
10 Auxiliary enterprises 61,187
101 9,143 70,431
11 Other sources 2,208
947
- 3,155
12 Net asset release
215 5,632 2,733 8,580
13 Total operating
revenues and support399,590 34,374 16,066450,030
Operating expenses
14 Instruction108,972 3,869 12,379125,220
15 Research 21,336 15,700
- 37,036
16 Public service 14,805
572
688 16,065
17 Academic support 35,913 4,912 5,503 46,328
18 Student services 33,387
342 5,503 39,232
19 Institutional support 58,161 10,014 6,877 75,052
20 Auxiliary enterprises 29,890
68 37,826 67,784
21 Facilities operations and
maintenance 38,048
-
(38,048)
-
22 Interest expense 9,919
-
(9,919)
-
23 Total operating expenses350,431 35,477 20,809406,717
24 Total operating activities 49,159 (1,103)
(4,743) 43,313
25 Transfer among funds(50,274) 19,937
30,337
-
Nonoperating items
26 Investment income
-
-
-
-
27 Other revenue and transfers
-
(34)
(134) (168)
28 Realized and unrealized
net capital gains 1,868 (400)
68,699 70,167
29 Total nonoperating
activities 1,868 (434)
68,565 69,999
30 Change in net assets 753 18,400 94,159113,312
31 Net assets at beginning of year 6,388135,742287,541429,671
32 Net assets at end of year
$ 7,141 $154,142 $381,700 $542,983 $
See accompanying notes to financial statements.
44
F I N A N C I A L S TAT E M E N T S
- $
-
-
-
-
-
3,837
5,665
191
-
-
(8,580)
Total
- $393,303
-(87,142)
-306,161
- 17,285
- 16,959
- 1,451
897 20,445
182 13,608
- 2,727
- 70,431
- 3,155
-
-
1,113 1,079 452,222
-
-
-
-
-
-
-
-125,220
- 37,036
- 16,065
- 46,328
- 39,232
- 75,052
- 67,784
-
-
-
-
-
-406,717
1,113 1,079 45,505
-
--
2,521
31
31
(260) 2,093
25,562 3,470 99,199
28,083 3,241 101,323
29,196 4,320 146,828
42,930 76,910549,511
72,126 $ 81,230 $696,339
STATEMENT OF ACTIVITIES Year ended April 30, 2009
Unrestricted Net Assets
(In thousands)
General
Operations
Internally
Designated
Capital
Total
Temporarily Permanently
Restricted
Restricted
Net Assets
Net Assets
Total
Operating revenues and support
1 Tuition and fees
$356,821 $
981 $
- $357,802 $
- $
- $357,802
2 Less scholarship allowances(66,408) (5,509)
-(71,917)
-
-(71,917)
3 Net tuition and fees290,413 (4,528)
-285,885
-
-285,885
4 Federal grants and contracts 558 14,182
- 14,740
-
- 14,740
5 Private grants and contracts 8,228 7,650
- 15,878
-
- 15,878
6 Indirect cost recovery 1,568
-
- 1,568
-
- 1,568
7 Contributions 7,454 3,450 2,171 13,075 2,192 1,290 16,557
8 Endowment income 802 7,133
- 7,935 5,891
164 13,990
9 Investment income 2,674
265
696 3,635
-
- 3,635
10 Auxiliary enterprises 58,699
115 10,495 69,309
-
- 69,309
11 Other sources 1,484
450
4 1,938
-
- 1,938
12 Net asset release
233 4,988
854 6,075 (6,075)
-
13 Total operating
revenues and support372,113 33,705 14,220420,038 2,008 1,454 423,500
Operating expenses
14 Instruction118,992 1,065 12,006132,063
-
-132,063
15 Research
160 14,899
- 15,059
-
- 15,059
16 Public service 11,191
497
668 12,356
-
- 12,356
17 Academic support 34,555 4,846 5,335 44,736
-
- 44,736
18 Student services 30,747
313 5,335 36,395
-
- 36,395
19 Institutional support 53,383 2,222 6,669 62,274
-
- 62,274
20 Auxiliary enterprises 29,653
48 36,684 66,385
-
- 66,385
21 Facilities operations and
maintenance 35,379
-
(35,379)
-
-
-
22 Interest expense 9,253
-
(9,253)
-
-
-
23 Total operating expenses323,313 23,890 22,065369,268
-
-369,268
24 Total operating activities 48,800 9,815
(7,845) 50,770 2,008 1,454 54,232
25 Transfer among funds(48,344) 14,691
33,653
-
-
-
Nonoperating items
26 Investment income
-
-
-
-
211
39
250
27 Other revenue and transfers
- (935)
- (935)
- 1,468
533
28 Realized and unrealized net
capital losses
-(13,112) (105,070)(118,182)
(40,151) (4,888) (163,221)
29 Total nonoperating
activities -(14,047) (105,070)(119,117)
(39,940) (3,381) (162,438)
30 Change before effect on
refunding of long-term debt 456 10,459
(79,262)(68,347)
(37,932) (1,927) (108,206)
31 Effect on refunding
of long-term debt
-
-
(537) (537)--
(537)
32 Change in net assets 456 10,459
(79,799)(68,884)
(37,932) (1,927) (108,743)
33 Net assets at beginning of year 5,932125,283367,340498,555 80,862 78,837658,254
34 Net assets at end of year
$ 6,388 $135,742 $287,541 $429,671 $ 42,930 $ 76,910 $549,511
See accompanying notes to financial statements.
AMERICAN UNIVERSITY
2009–2010
45
STATEMENTS OF CASH FLOWS Years ended April 30, 2010 and 2009
(In thousands)
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES
1 Increase (decrease) in net assets
$ 146,828 $ (108,743)
Adjustments to reconcile increase in net assets to net cash provided
by operating activities:
2 Effect of refunding of long-term debt
- 1,269
3 Contributed art (3,132)
(675)
4 Net realized and unrealized capital (gains) losses (96,062) 133,622
5 Change in fair value of interest rate swaps (11,827) 21,206
6 Depreciation, amortization, and accretion 21,453 20,877
Changes in assets and liabilities
7 Decrease in accounts and university loans receivable, net 1,136 1,073
8 Decrease in contributions receivable, net
267 1,067
9 Decrease (increase) in prepaid expenses
82 (1,814)
10 Decrease in accounts payable and accrued liabilities (1,636)
(2,462)
11 Increase in deferred revenue, deposits and other refundable advance 4,735 384
12 Increase in asset retirement obligation
(193)
13 Contributions collected and revenues restricted for long-term investment (8,079)
(1,307)
14 Net cash provided by operating activities 53,572 64,497
CASH FLOWS FROM INVESTING ACTIVITIES
15 Purchases of investments(307,993) (370,880)
16 Proceeds from sales and maturities of investments 366,590 334,485
17 Purchases of property, plant, and equipment (43,507) (47,973)
18 Capitalized interest (1,237)
(1,079)
19 Decrease in deposits with trustees/other, net 18,272 2,721
20 Net cash provided by (used in) investing activities 32,125 (82,726)
CASH FLOWS FROM FINANCING ACTIVITIES
21 Student loans issued (1,327)
(1,510)
22 Student loans repaid
520 755
23 Issuance of debt
- 74,525
24 Debt issuance cost
- (912)
Proceeds from contributions restricted for
25 Investment in plant
255 838
26 Investment in endowment 7,824 469
27 Net cash provided by financing activities 7,272 74,165
28 Net increase in cash and cash equivalents 92,969 55,936
29 Cash and cash equivalents at beginning of year 87,366 31,430
30 Cash and cash equivalents at end of year
$ 180,335 $ 87,366
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
31 Cash paid during year for interest
$ 11,106 $ 10,947
32 Donated art 3,132 675
33 Donated building 12,000 See accompanying notes to financial statements.
46
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
1. AMERICAN UNIVERSITY
American University (the University) is an independent, coeducational university located on an 85-acre campus in
northwest Washington, D.C. It was chartered by an Act of Congress in 1893 (the Act). The Act empowered the
establishment and maintenance of a university for the promotion of education under the auspices of the Methodist
Church. While still maintaining its Methodist connection, the University is nonsectarian in all of its policies.
American University offers a wide range of graduate and undergraduate degree programs, as well as non-degree study.
There are approximately 575 full-time faculty members in six academic divisions and approximately 11,500 students,
of which 6,300 are undergraduate students and 5,200 are graduate students. The University attracts students from all
50 states, the District of Columbia, Puerto Rico, and nearly 150 foreign countries.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the University have been reported on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America.
Classification of Net Assets
Net assets, revenues, gains, and losses are classified based on the existence or absence of donor-imposed restrictions.
Accordingly, net assets of the University and changes therein are classified and reported as follows:
Unrestricted—Net assets that are not subject to donor-imposed stipulations.
Temporarily Restricted—Net assets subject to donor-imposed stipulations that either expire by passage
of time or that can be fulfilled by actions of the University pursuant to those stipulations.
Permanently Restricted—Net assets subject to donor-imposed stipulations that they be maintained
permanently by the University.
Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed
restrictions. Contributions are reported as increases in the appropriate category of net assets. Expenses are reported as
decreases in unrestricted net assets. Gains and losses on investments are reported as increases or decreases in unrestricted
net assets unless their use is restricted by explicit donor stipulations or by law. Expirations of temporary restrictions
recognized on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has
elapsed) are reported as reclassifications from temporarily restricted net assets to unrestricted net assets. Temporary
restrictions on gifts to acquire long-lived assets are considered met in the period in which the assets are acquired or
placed in service.
Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional
promises to give are not recognized until the conditions on which they depend are substantially met. Contributions of
assets other than cash are recorded at their estimated fair value at the date of gift. Contributions to be received after one
year are discounted at a rate commensurate with the risk involved. Amortization of the discount is recorded as additional
contribution revenue and used in accordance with donor-imposed restrictions, if any, on the contributions. Allowance
is made for uncollectible contributions based upon management’s judgment and analysis of the creditworthiness of the
donors, past collection experience, and other relevant factors.
AMERICAN UNIVERSITY
2009–2010
47
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
The University follows a practice of classifying its unrestricted net asset class of revenues and expenses as general
operations, internally designated, or capital. Items classified as general operations include those revenues and
expenses included in the University’s annual operating budget. Items classified as capital include accounts and
transactions related to endowment funds and plant facilities and allocation of facilities operations and maintenance,
depreciation, and interest expense. All other accounts and transactions are classified as internally designated.
Transfers consist primarily of funding designations for specific purposes and for future plant acquisitions
and improvements.
48
Non-operating activities represent transactions relating to the University’s long-term investments and plant activities,
including contributions to be invested by the University to generate a return that will support future operations,
contributions to be received in the future or to be used for facilities and equipment, and investment gains or losses.
Cash and Cash Equivalents
All highly liquid cash investments with maturities at date of purchase of three months or less are considered to be
cash equivalents. Cash equivalents consist primarily of money market funds.
Deposits with Trustees/Others
Deposits with trustees consist of debt service funds and the unexpended proceeds of certain bonds payable. These
funds are invested in short-term, highly liquid securities and will be used for construction of, or payment of debt
service on, certain facilities.
Investments
Equity securities with readily determinable fair values and all debt securities are recorded at fair value in the balance
sheet. See Note 8 for an explanation as to methodology for determining fair value. Endowment income included in
operating revenues consists of annual amounts allocated for spending to endowment funds in accordance with the
University’s spending policy. All realized and unrealized gains and losses from investments of endowment funds are
reported as non-operating revenues. Investment income included in operating revenues consists primarily of interest
and dividends from investments of working capital funds and unexpended plant funds.
The University has interests in alternative investments consisting of limited partnerships. Alternative investments
are less liquid than the University’s other investments. Furthermore, the investments in these limited partnerships,
as well as certain mutual funds classified as equity securities, may include derivatives and certain private investments
which do not trade on public markets and therefore may be subject to greater liquidity risk.
Investment income is reported net of management fees and rental real estate property expenses.
Property, Plant, and Equipment, Net
Property, plant, and equipment are stated at cost on the date of acquisition or at estimated fair value if acquired
by gift including interest capitalized on related borrowings during the period of construction, less accumulated
depreciation. Certain costs associated with the financing of plant assets are deferred and amortized over the terms
of the financing. Depreciation of the University’s plant assets is computed using the straight line method over
asset’s estimated useful life, generally over 50 years for buildings, 20 years for land improvements, 5 years for
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
equipment, 10 years for library collections, and 50 years for art collections. The University’s capitalization policy
is to capitalize all fixed assets and collection items that have a cost of $2,500 or more per unit and a useful life
of two years or more.
Refundable Advances from the U.S. Government
Funds provided by the United States Government under the Federal Perkins Loan Program are loaned to
qualified students and may be reloaned after collections. Such funds are ultimately refundable to the
government. Approximately 46% and 33% of net tuition and fees revenue for the years ended April 30, 2010
and 2009, respectively, was funded by federal student financial aid programs (including loan, grant, and
work-study programs).
Asset Retirement Obligations
The University records asset retirement obligations in accordance with the accounting standard for the
Accounting for Conditional Asset Retirement Obligations. This standard requires that the fair value of the
liability for the asset retirement obligations (ARO) be recognized in the period in which it is incurred and
the settlement date is estimable, even if the exact timing or method of settlement is unknown. The ARO is
capitalized as part of the carrying amount of the long-lived asset retroactively to the time at which legal or
contractual regulations created the obligation. The University’s ARO is primarily associated with the cost of
removal and disposal of asbestos, lead paint, and asset decommissioning.
Income Taxes
The University has been recognized by the Internal Revenue Service as exempt from federal income tax under
Section 501(c)(3) of the U.S. Internal Revenue Code, except for taxes on income from activities unrelated to
its exempt purpose. Such activities resulted in no net taxable income in fiscal years 2010 and 2009.
Functional Expenses
The University has developed and implemented a system of allocating expenses related to more than one
function. These expenses are depreciation, interest, and operations and maintenance of plant. Depreciation is
allocated by individual fixed assets to the function utilizing that asset. Interest is allocated based on the use of
borrowed money in the individual functional category.
The operations and maintenance of plant is divided into expenses used for the total institution not charged
back to the operating units, and those expenses that are charged to some units but not all units. Allocation was
determined through a study of departmental uses of the operations and maintenance budget within
each category.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect: (1) the reported amounts of assets and liabilities;
(2) disclosure of contingent assets and liabilities at the date of the financial statements; and (3) the reported
amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and
assumptions are the value of alternative investments, the asset retirement obligations, the postretirement benefit
plan, and swap agreements. Actual results could differ materially, in the near term, from the amounts reported.
AMERICAN UNIVERSITY
2009–2010
49
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
3. ACCOUNTS AND UNIVERSITY LOANS RECEIVABLE, NET
Accounts and loans receivable, net, at April 30, 2010 and 2009, are as follows (in thousands):
2010
2009
Accounts receivable
1
Student
$
5,554 $ 4,205 2
Grants, contracts, and other
3
Accrued interest
424 513 4 Student loans
10,722 9,721 5
25,889 26,148 6
Less allowance for uncollectible accounts and loans
7
9,189 11,709 (1,377)
$ 24,512 (1,307)
$ 24,841
At April 30, 2010 and 2009, the University had an outstanding student loans receivable balance in the amount of $10.7
million and $9.7 million, respectively. Management believes the recorded cost of these loans approximate the fair value
at April 30, 2010 and 2009.
4. CONTRIBUTIONS RECEIVABLE, NET
As of April 30, 2010 and 2009, unconditional promises to give were as follows (in thousands):
2010
2009
$ 11,286 $ 19,056
Amounts due in:
8 Less than one year
9 One year to five years
10
Over five years
5,167
961 1,453
11
17,243 25,676
12 Less unamortized discount
(1,005)
(831)
13 Less allowance for doubtful accounts
(6,222)
(2,562)
14
50
4,996 $ 10,016 $ 22,283
Contributions receivable over more than one year are discounted at rates ranging from 3% to 6.5%. New contributions
received during fiscal years 2010 and 2009 were assigned a discount rate which is commensurate with the market and
credit risk involved.
As of April 30, 2010 and 2009, the University had also received bequest intentions and conditional promises to give
of $20.1 million and $18.7 million, respectively. These intentions to give are not recognized as assets. If the bequests
are received, they will generally be restricted for specific purposes stipulated by the donors, primarily endowments for
faculty support, scholarships, or general operating support of a particular department of the University. Conditional
promises to give are recognized as contributions when the donor-imposed conditions are substantially met.
Amortization of the discount is recorded as additional contribution revenue and is used in accordance with the
donor-imposed restrictions, if any, on the contributions. An allowance is made for uncollectible pledges based upon
management’s judgment and analysis of the creditworthiness of the donors, past collection experience, and other
relevant factors.
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
5. PROPERTY, PLANT, AND EQUIPMENT, NET
Property, plant, and equipment and related accumulated depreciation and amortization at April 30, 2010 and 2009, are
as follows (in thousands):
2010
2009
1
Land and improvements
2
Buildings 467,253 442,340
$ 50,283 $ 46,373
3 Equipment
86,527 83,196
4
Construction in progress
62,134 43,274
5
Library and art collections
77,730 68,868
6
743,927 684,051
7 Accumulated depreciation and amortization (316,043)(294,900)
8
$ 427,884 $389,151 Construction in progress at April 30, 2010 and 2009 relates to building improvements and renovations.
For the years ended April 30, 2010 and 2009, depreciation expense was approximately $21.1 million and $20.6
million, respectively.
6. INDEBTEDNESS
The University classifies its debt into two categories: core debt and special purpose debt. Core debt represents debt
that will be repaid from the general operations of the University and includes borrowings for educational and auxiliary
purposes. Special purpose debt represents debt that is repaid from sources outside of general operations and includes
borrowings for buildings, which house some administrative offices, along with rental space.
Indebtedness at April 30, 2010 and 2009, consists of the following (in thousands):
2010
2009
Core Debt
9 District of Columbia University Revenue Bonds, American University
Issue Series 1999, maturing in 2028
$ 21,000 $ 21,000
10 District of Columbia University Revenue Bonds, American University
Issue Series 2003, maturing 2033 37,000 37,000
11 District of Columbia University Revenue Bonds, American University
Issue Series 2006, maturing 2036 99,975 99,975
12
District of Columbia University Revenue Bonds, American University
Issue Series 2008, maturing 2038 60,900 60,900
13 Total core debt 218,875 218,875
Special Purpose Debt
14
Note payable, variable rate, due in full in 2021
22,000 22,000
15
Note payable, variable rate, due in full in 2020
15,000 15,000
37,000 37,000
16
Total special purpose debt
17
Total indebtedness
$ 255,875 $255,875
In May 2008, the University converted $37.0 million of the Series 2003 bonds to variable rate demand bonds, and on
May 29, 2008, the University converted $99.9 million of the Series 2006 bonds to variable rate demand bonds. Both
series were supported by a third-party letter of credit.
AMERICAN UNIVERSITY
2009–2010
51
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
The principal balance of bonds and notes payable outstanding as of April 30, 2010, are due as follows (in thousands):
Year ending April 30:
1 2020
$
15,000
2 2021
22,000
3 2028
21,000
4 2033
37,000
5 2036
99,975
6 2038
60,900
7
Due to the nature of certain variable rate bond agreements, the University may receive notice of an optional tender
on its variable rate bonds. In that event, the University would have an obligation to purchase the tendered bonds if they
were unable to be remarketed. The University has entered into letter of credit and standby bond purchase agreements
with various financial institutions to support the $218.9 million of variable rate demand obligations. Under these
agreements, the financial institutions have agreed to purchase the bonds if the bonds are unable to be remarketed. Should
that occur, payment would be accelerated and ultimately differ from the dates stated above. In accordance with the terms
of the agreements, $21.0 million would convert to a term loan with principal and interest payable over five years and
$198.0 would be payable in 2013.
The estimated fair value of the University’s indebtedness at April 30, 2010 and 2009, was $255.9 million and was
determined using quoted market prices.
52
$ 255,875
District of Columbia Bonds Payable
In October 2008, the University refunded and reissued the Series 1985 and Series 1985A bonds as Series 2008 variable
rate demand bonds. These bonds are general unsecured obligations of the University. The variable rate was effectively
changed to a 4.31% fixed rate by the University entering into an interest rate swap agreement with Bank of America.
The Series 1999 bonds bear interest at a variable rate and are general unsecured obligations of the University. The
variable rate was effectively changed to a 4.1% fixed rate by the University entering into an interest rate swap agreement
with Morgan Stanley Capital Services. The proceeds from the bonds were used to repay a mortgage note prior to its
scheduled maturity.
The Series 2003 bonds are general unsecured obligations of the University. The proceeds were used to fund
construction and renovation projects relating to the Katzen Arts Center and Greenburg Theatre.
The Series 2006 bonds are general unsecured obligations of the University. The proceeds were used to advance refund
the Series 1996 bond issue, thus reducing the University’s overall interest costs, and to fund construction
and renovation projects including Nebraska Hall and the School of International Service building.
Notes Payable
In 2003, the University issued a $15.0 million note payable to replace a 1998 note incurred for the purchase of a
building. The note is payable in full in April 2020. The interest rate is LIBOR plus 0.45%, payable monthly.
In 2001, the University issued a $22.0 million note for the purchase of a building. The note payable bears interest at a
variable rate, payable monthly. The note is payable in full in September 2021. The variable rate was effectively changed
to a 5.54% fixed rate by the University entering into an interest rate swap agreement with Morgan Stanley Capital
Services through 2010.
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
Interest Rate Swaps
The University has entered into interest rate swap agreements to reduce the impact of changes in interest rates on
its floating rate long-term debt. The interest rate swap agreements were not entered into for trading or speculative
purposes. At April 30, 2010, the University had outstanding interest rate swap agreements with Bank of America and
Morgan Stanley Capital Services. The interest rate swap agreement with Bank of America effectively changes the interest
rate to a 4.31% fixed rate for the Series 2008 bonds and replaces an interest rate swap agreement with Ambac Assurance
Corporation for the refunded and reissued Series 1985 and Series A bonds. Five interest rate swap agreements are in
place with Morgan Stanley with a total notional principal amount of approximately $156 million. These agreements
effectively change the University’s interest rate to a 4.1% fixed rate for the Series 1999 bonds, a 5.54% fixed rate for the
2001 note payable, fixed rates of 5.26% and 4.37% on portions of the Series 2006 bonds, and a fixed rate of 4.46%
on a portion of the Series 2003 bonds. The interest rate swap agreements mature at the time the related notes mature,
except for the swap related to the 2001 note payable, which expires in September 2010. The University is exposed
to credit loss in the event of nonperformance by the other parties to the interest rate swap agreements. However, the
University does not anticipate nonperformance by the counter parties.
The interest rate swap agreements contain provisions that require the University’s debt to maintain an investment grade
credit rating from each of the major credit rating agencies. If the University’s debt were to fall below investment grade, it
would be in violation of these provisions, and the counterparties to the derivative instruments could request immediate
payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability
positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a
liability position on April 30, 2010, is $37.0 million for which the University has posted collateral of $2.0 million in the
normal course of business. If the credit-risk-related contingent features underlying these agreements were triggered on
April 30, 2010, the University would be required to post an additional $35.0 million of collateral to its counterparties.
The University is also exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap
agreements. However, the University does not anticipate nonperformance by the counter parties.
Derivatives at April 30, 2010 and 2009, are as follows (in thousands):
Derivatives not designated as hedging instruments:
1 Interest rate contracts
Liability Derivatives
2010
Balance Sheet Location
Swap Agreements $ 37,269
2 Total derivatives
Location of Gain (Loss) Recognized in Statement of Activities
Derivatives not designated as hedging instruments:
3 Interest rate contracts
Fair
Value
Realized and unrealized net
capital gains (losses)
2009
Balance Sheet Location
Fair
Value
Swap
Agreements $
$ 37,269 $
49,096
49,096
Amount of Gain (Loss) Recognized in
Statement of Activities
2010
2009
$ 11,827 $
(21,206)
AMERICAN UNIVERSITY
2009–2010
53
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
7. INVESTMENTS
Investments by type at April 30, 2010, are as follows (in thousands):
Fair Value
Level 1
1 Cash Equivalents
$
Level 3
150 $
Total
$
2 Equity—Corporate Stocks
59,979 3 Equity—Domestic Funds
-
66,899 4 Equity—International Funds
-
97,489 5 Equity—Hedge Funds
-
22,436 8,050 30,486
6 Equity—Real Asset Funds
-
32,167 -
32,167
7
Equity—Private Equity Funds
- -
1,135 1,135
8
- -
$
- 24,162
77 59,979
66,976
- 97,489
Fixed Income—Corporate Bonds
- 12,963 -
12,963
9 Fixed Income—Government Agency Bonds
- 10,451 -
10,451
10 Fixed Income—International Bonds
- 2,627 - 2,627
4,100 - -
4,100
11 Fixed Income—Treasury Notes
12
Fixed Income—Domestic Bond Funds
13
$
-
88,091 64,593 -
$ 309,775 $
9,262
64,593
$ 407,128
The University determines a valuation estimate based on techniques and processes which have been reviewed for
propriety and consistency with consideration given to asset type and investment strategy. In addition, the funds and
fund custodians may also use established procedures for determining the fair value of securities which reflect their
own assumptions. Management makes best estimates based on information available. The following estimates and
assumptions were used to determine the fair value of financial instruments listed above:
• Cash Equivalents—Cash equivalents primarily consist of deposits in money market funds and short-term
investments. These are priced using quoted prices in active markets and are classified as Level 1.
• Equity Investments—Equity investments consist of, but are not limited to, separate accounts, common trust funds, and hedge funds. These assets consist of both publicly traded and privately held funds.
•
Publicly Traded Securities—These investments consist of domestic and foreign equity holdings. Securities
traded on active exchanges are priced using unadjusted market quotes for identical assets and are classified as
Level 1. Securities that are traded infrequently or that have comparable traded assets are priced using available
quotes and other market data that are observable and are classified as Level 2.
•
Privately Held Funds—These investments consist of domestic, international, hedge, real asset, and private
equity funds which are privately held. The valuations of the funds are calculated by the investment managers
based on valuation techniques that take into account the market value of the underlying assets to arrive at
a net asset value or interest in the fund shares. The funds are commingled funds and limited partnerships and
shares may not be readily redeemable. If an active market exists for the fund and shares are redeemable at net
asset value, these investments are classified as Level 2. If no active market exists for these investments and/or
there are significant redemption restrictions, they are classified Level 3.
54
Level 2
24,012
•
Fixed Income Investments—Fixed income securities include, but are not limited to, U.S. Treasury issues, U.S.
Government Agency issues, corporate debt, and domestic and international bond funds. Fixed income securities
assets are valued using quoted prices in active markets for similar securities and are classified as Level 2. If an active
market exists for fixed income funds and shares are redeemable at net asset value, these investments are classified
as Level 2. If no active market exists for these investments and/or there are significant redemption restrictions, they
are classified Level 3.
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
Investments in certain entities that calculate net asset value at April 30, 2010, are as follows (in thousands):
Unfunded
Fair Value
1 Domestic Equity Funds
$ 66,976 Redemption
Commitments
Notice Period
-
daily
same day
2 International Equity Funds
97,489 -
daily, biweekly
same day–5 days
3 Domestic Bond Funds
64,593 -
daily
same day
4 Real Asset Funds
32,167 - daily, monthly
1–10 days
5 Hedge Funds
30,486 20,000 monthly, annually
30–90 days
6 Private Equity Funds
1,135 2,900 N/A
N/A
7 Total
$ 292,846 $
Redemption
Frequency
$ 22,900
At April 30, 2010 and 2009, the assets of endowments and funds functioning as endowments were approximately $385
million and $297 million, respectively.
Investments in debt securities and equity securities consist primarily of investments in funds managed by external
investment managers.
For the years ended April 30, 2010 and 2009, the University’s investment management fees were approximately $1.4
million and $1.6 million, respectively.
8. FAIR VALUE MEASUREMENTS
Effective May 1, 2008, the University adopted the accounting standard for Fair Value Measurements which provides a
framework for measuring fair value under GAAP, as well as expanded information about assets and liabilities measured at
fair value, including the effect of fair value measurements on earnings. There was no impact of adopting the accounting
standard for Fair Value Measurements to the beginning balance of net assets as of May 1, 2008.
The provisions of the accounting standard for the Fair Value Option for Financial Assets and Financial Liabilities,
were effective May 1, 2008. This accounting standard gives entities the option, at specific election dates, to measure
certain financial assets and liabilities at fair value. The election may be applied to financial assets and liabilities on an
instrument by instrument basis, is irrevocable, and may only be applied to entire instruments. Unrealized gains and
losses on instruments for which the fair value option has been elected are reported in earnings at each subsequent
reporting date. The University did not elect fair value accounting for any assets or liabilities that are not currently
required to be measured at fair value.
The accounting standard for Fair Value Measurements establishes a hierarchy of valuation inputs based on the extent
to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources
independent of the reporting entity and unobservable inputs reflect the entities own assumptions about how market
participants would value an asset or liability based on the best information available. The University uses valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value
hierarchy ranks the quality and reliability of the information used to determine fair values. The University performed a
detailed analysis of the assets and liabilities that are subject to the accounting standard for Fair Value Measurements to
determine the appropriate level based on the inputs used in the valuation methodology.
The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies
used by the University for financial assets and liabilities carried at fair value. Financial assets and liabilities are classified
and disclosed in one of the following three categories based on the lowest level input that is significant to the fair value
measurement in its entirety:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
AMERICAN UNIVERSITY
2009–2010
55
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
Level 2: Inputs other than Level 1 that are observable either directly or indirectly, such as quoted prices for similar
assets or liabilities, quoted prices in markets that are not active; or inputs that are observable or can be corroborated by
observable market data for substantially the same term of the assets or liabilities
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
The following tables display the carrying value and estimated fair value of our financial instruments as of April 30, 2010
(in thousands):
Quoted Prices in
Significant
Active Markets
Other
for Identical Assets Observable Inputs
(Level 1)
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Fair Value
as of
April 30, 2010
Assets
1 Investments
$
88,091 $ 309,775 $
9,262 $ 407,128
2 Deposits with trustees
54 - - 54
3 Interest in perpetual trust
- - 12,866 12,866
4 Total assets at fair value
$
88,145 $ 309,775 $ 22,128 $ 420,048
Liabilities
5 Swap agreements
$
-
$ 37,269 $
-
$
37,269
6
Total liabilities at fair value
$
-
$ 37,269 $
-
$
37,269
The following tables display the carrying value and estimated fair value of our financial instruments as of April 30, 2009
(in thousands):
Quoted Prices in
Significant
Active Markets
Other
for Identical Assets Observable Inputs
(Level 1)
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Fair Value
as of
April 30, 2010
Assets
7 Investments
$
8 Deposits with trustees
7,240 - - 7,240
9 Interest in perpetual trust
- - 10,064 10,064
10 Total assets at fair value
$
87,743 94,983 $ 251,803 $ 251,803 $ 32,919 $ 42,983 $ 372,465
$ 389,769
Liabilities
56
11 Swap agreements
$
-
$ 49,096 $
-
$
49,096 12 Total liabilities at fair value
$
-
$ 49,096 $
-
$
49,096
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
Following is a description of the University’s valuation methodologies for assets and liabilities measured at fair value.
Level 1 consists of instruments whose value is based on quoted market prices in active markets.
Level 2 includes instruments that are primarily valued using valuation techniques that use observable market-based inputs
or unobservable inputs that are corroborated by market data. These inputs consider various assumptions, including time
value, yields, volatility, default rates, current market conditions, contractual obligations, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable market
data, or are supported by observable levels at which transactions are executed in the marketplace. This category may also
include instruments whose values are based on quoted market prices provided by a single dealer that is corroborated by a
recent transaction.
Level 3 is composed of instruments whose fair value is estimated based on a market approach using alternative
techniques or internally developed models using significant inputs that are generally less readily observable because
of limited market activity or little or no price transparency. The University also takes into consideration the net asset
values at the reporting date. The University includes instruments whose value is based on a single source, such as a
dealer, broker, or pricing service which cannot be corroborated by recent market transactions.
Interest rate swaps are valued using both observable and unobservable inputs, such as quotations received from the
counterparty, dealers, or brokers, whenever available and considered reliable. In instances where models are used, the value
of the interest rate swap depends upon the contractual terms of, and specific risks inherent in, the instrument as well as
the availability and reliability of observable inputs. Such inputs include market prices for reference securities, yield curves,
credit curves, measures of volatility, prepayment rates, assumptions for nonperformance risk, and correlations of such
inputs. Certain of the interest rate swap arrangements have inputs which can generally be corroborated by market data
and are therefore classified within Level 2.
Beneficial and perpetual trusts held by third parties are valued at the present value of the future distributions expected
to be received over the term of the agreement.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value
or reflective of future fair values. Furthermore, while the University believes its valuation methods are appropriate and
consistent with other market participants, the use of different methodologies or assumptions to determine the fair value
of certain financial instruments could result in a different estimate of fair value at the reporting date.
The following table is a roll-forward of the statement of financial position amounts for financial instruments classified
by the University within Level 3 of the fair value hierarchy defined above for the years ended April 30, 2010 and 2009
(in thousands):
Investments
Interest in Perpetual
Trust Total
1 Beginning balance at May 1, 2009 $
32,919 $ 10,064 $ 42,983
2 Total gains or losses (realized/unrealized)
included in earnings
708 2,802 3 Purchases, issuances, and settlements
(12,054)
- 4 Transfers in and/or (out) of level 3
(12,311)
- 3,510
(12,054)
(12,311)
5 Ending balance at April 30, 2010
$
9,262 $ 12,866 $ 22,128
6 Total gains or losses for the period included in
earnings attributable to the change in unrealized
gains or losses relating to assets still held at period end
$
5,043 $
$
2,802 7,845
AMERICAN UNIVERSITY
2009–2010
57
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
Investments
Interest in Perpetual
Trust 1 Beginning balance May 1, 2008
$ 14,593 $ 38,735 2 Total gains or losses (realized/unrealized)
included in earnings
Total
$ 53,328
(5,816) (4,529)
(10,345)
3 Purchases, issuances, and settlements
- - -
4 Transfers in and/or (out) of Level 3
- - -
5
Ending balance April 30, 2009
6 Total gains or losses for the period included in
earnings attributable to the change in unrealized
gains or losses relating to assets still held at period end
$ 32,919 $ 10,064 $ 42,983
$
$
$ (10,345)
(5,816)
(4,529)
Transfers into and out of Level 3 are typically the result of a change in the availability and the ability to observe market
data which is considered a significant valuation input required by various models. Generally, as markets evolve, the data
required to support valuations becomes more widely available and observable.
9. EMPLOYEE BENEFIT PLANS
Eligible employees of the University may participate in two contributory pension and retirement plans, one
administered by the Teachers Insurance and Annuity Association and College Retirement Equities Fund and the other
administered by Fidelity Investments. Under these plans, contributions are fully vested and are transferable by the
employees to other covered employer plans. Participating employees contribute a minimum of 1% up to a maximum of
5% of their base salary. The University contributes an amount equal to twice the employee’s contribution.
The University’s contribution to these plans was approximately $12.2 million and $11.1 million for the years ended
April 30, 2010 and 2009, respectively.
Postretirement Healthcare Plan
The University provides certain healthcare benefits for retired employees. The plan is contributory and requires
payment of deductibles. The University’s policy is to fund the cost of medical benefits on the pay-as-you-go basis. The
plan’s measurement dates are April 30, 2010, and April 30, 2009, respectively.
Net periodic postretirement benefit cost for the years ended April 30, 2010 and 2009, includes the following
components (in thousands):
2010
7 Service cost
394 $
444
8 Interest cost
1,135 1,082
9 Amortization of transition obligation over 20 years
667 667
- 12
10
Amortization of net loss
11
58
$
2009
Net periodic postretirement benefit cost
F I N A N C I A L S TAT E M E N T S
$
2,196 $ 2,205
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
The following table sets forth the postretirement benefit plan’s funded status and the amount of accumulated
postretirement benefit plan costs for the years ended April 30, 2010 and 2009, using a measurement date of April 30
(in thousands):
Change in Accumulated Postretirement Benefit Obligation:
1 Accumulated postretirement benefit obligation at beginning of year
2010
2009
$ 16,883 $ 17,548
2 Service cost
394 444
3 Interest cost
1,135 1,082
4 Net actuarial (gain)/loss
2,649 (1,077)
5 Plan participants’ contributions
424 6
7
Benefits paid
Accumulated postretirement benefit obligation at end of year
(1,684)
418
(1,532)
$ 19,801 $ 16,883
$
$
Change in Fair Value of Plan Assets:
8
Fair value of plan assets at beginning of year
9 Plan participants’ contributions
- 424 418
10
Employer contributions
1,260 1,114
11
Benefits paid
(1,684)
(1,532)
12
Fair value of plan assets at end of year
$
- -
Reconciliation of Funded Status:
13
Funded status (19,801) (16,883)
14
Postretirement benefit liability
$ (19,801)
$(16,883)
Amounts Not Recognized in Net Periodic Benefit Cost:
15
Net actuarial (gain)/loss
$
16
Transition (asset)/obligation
1,837 17
Amounts included in unrestricted net assets
5,327 $
3,490 $
842
2,504
$ 3,346
The amounts expected to be amortized from unrestricted net assets into net periodic benefit cost for the year ended
April 30, 2011, are as follows (in thousands):
18
Net actuarial (gain)/loss
19
Transition (asset)/obligation
667
20
Total
767
$
$
100
Other changes in benefit obligations recognized in unrestricted net assets are as follows (in thousands):
21
Actuarial gain/(loss)
22
Amortization of transition obligation
Total other changes in benefit obligations recognized
in unrestricted net assets
$ (2,649)
667
23
$ (1,982)
The weighted discount rate used in the actuarial valuation at the April 30, 2010, and April 30, 2009, measurement
dates is as follows:
2010
2009
24
End of year benefit obligation
5.40%
7.00%
25
Net periodic postretirement benefit cost
7.00%
6.40%
AMERICAN UNIVERSITY
2009–2010
59
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
An 8% healthcare cost trend rate was assumed for fiscal 2010, with the rate decreasing 1% each year to an ultimate rate
of 5% in fiscal year 2016, and thereafter. An increase in the assumed healthcare cost trend rate of 1% would increase
the aggregate of the service and interest cost by approximately $122,000 and $119,000 for 2010 and 2009, respectively,
and the accumulated postretirement benefit obligation at April 30, 2010 and 2009, by approximately $970,000 and
$860,000, respectively. A decrease in the assumed healthcare cost trend rate of 1% would decrease the net periodic postretirement benefit cost by approximately $104,000 and $102,000 for 2010 and 2009, respectively, and the accumulated
postretirement benefit obligations at April 30, 2010 and 2009, by approximately $843,000 and $758,000, respectively.
The expected contributions by the University to the plan are as follows:
Payment with
Payment without Medicare
Medicare
Medicare
Part D
Part D
Part D
Subsidy
Year ending April 30
Subsidy
Subsidy
Receipts
1 2011
$
142,079
2
2012
$ 1,203,552 1,310,795 1,474,607 $ 1,345,631 163,812
3
2013
1,400,103 1,578,988 178,885
4
2014
1,470,925 1,663,220 192,295
5
2015
1,505,054 1,711,786 206,732
6
2016–2020
7,836,523 8,614,104 777,581
10.EXPENSES
For the years ended April 30, 2010 and 2009, the University’s program services and supporting services were as follows
(in thousands):
2010
2009
$ 125,220 $132,063
Program services
7
Instruction
Research
37,036 15,059
9 Public service
16,065 12,356
10
Academic support
46,328 44,736
11
Student services
39,232 36,395
8
12
Total program services 263,881 240,609
Supporting services
13
Institutional support
75,052 62,274
14 Auxiliary enterprises
67,784 66,385
15
60
$ 406,717 $369,268
For the years ended April 30, 2010 and 2009, the University’s fundraising expenses totaled approximately $13.0 million
and $11.4 million, respectively, and are included in institutional support in the accompanying statements of activities.
F I N A N C I A L S TAT E M E N T S
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
11. NET ASSETS
Temporarily restricted net assets consist of the following at April 30, 2010 and 2009 (in thousands):
1 Unspent contributions and related investment income
for instruction and faculty support
2010
2009
$ 69,255 $ 33,362
2
Term endowment
1,200 1,200
3
Gifts received for construction of facilities
1,671 8,368
4
$ 72,126 $ 42,930
Permanently restricted net assets were held, the income of which will benefit the following at April 30, 2010 and 2009
(in thousands):
Permanent endowment funds, for scholarships
and related academic activity
2010
2009
$ 63,030 $ 62,222
5
6 Interest in trust assets
7 Student loans
8
12,867 10,190
5,333 $ 81,230 4,498
$ 76,910
12.ENDOWMENTS
The University’s endowment consists of approximately 400 individual funds established for scholarships and related
academic activities. Its endowment includes both donor-restricted endowment funds and funds designated by the Board
of Trustees to function as endowments. As required by generally accepted accounting principles, net assets associated
with endowment funds, including funds designated by the Board of Trustees to function as endowments, are classified
and reported based on the existence or absence of donor-imposed restrictions.
Permanently Restricted Net Assets —Interpretation of Relevant Law
The Board of Trustees has interpreted the District of Columbia enacted version of UPMIFA as requiring the
preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent
explicit donor stipulations to the contrary. As a result of this interpretation, the University classifies as permanently
restricted net assets (a) the original value of gifts to the permanent endowment, (b) the original value of subsequent
gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the
direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining
portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified
as temporarily restricted net assets until purpose and timing restrictions are met and amounts are appropriated for
expenditure by the Board of Trustees of the University in a manner consistent with the standard of prudence prescribed
by UPMIFA.
AMERICAN UNIVERSITY
2009–2010
61
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
In accordance with UPMIFA, the University considers the following factors in making a determination to appropriate
or accumulate donor-restricted endowment funds:
(1) The duration and preservation of the fund
(2) The purposes of the University and the donor-restricted endowment fund
(3) General economic conditions
(4) The possible effect of inflation and deflation
(5) The expected total return from income and the appreciation of investments
(6) Other resources of the University
(7) The investment policies of the University
The endowment net assets composition by type of fund at April 30, 2010, is as follows (in thousands):
Unrestricted
1 Donor-restricted endowment funds
$
(82)
Temporarily
Restricted
$ 52,575 2 Board-designated endowment funds 237,011 3 Total endowment funds
$ 236,929 Permanently
Restricted
$
- $ 52,575 $
71,131 Total
$ 123,624
- 237,011
71,131 $ 360,635
The changes in endowment net assets for the year ended April 30, 2010, are as follows (in thousands):
Unrestricted
4 Endowment net assets, May 1, 2009
$ 184,383 Temporarily
Restricted
$ 26,920 Permanently
Restricted
$
Total
59,514 $ 270,817
2,802 91,585
Investment return:
5
Net appreciation on investments
6 Interest, dividends, and capital distributions
7 Total investment return
8 Contributions to endowment
Appropriation of endowment assets
for expenditure
60,607 28,176 1,755 62,362 3,393 31,569 - - - 5,148
2,802 96,733
8,815 8,815
9
(7,760) (5,914)
- (13,674)
Other changes:
10 Transfers to create board-designated
endowment funds
9,944 - - 9,944
Transfers to remove board-designated
endowment funds (12,000)
- - (12,000)
11
12
Endowment net assets, April 30, 2010
$ 236,929 The endowment net assets composition by type of fund at April 30, 2009, is as follows (in thousands):
Unrestricted
13
Donor-restricted endowment funds
$ (1,447)
14 Board-designated endowment funds 185,830 15 Total endowment funds
62
F I N A N C I A L S TAT E M E N T S
$ 184,383 $ 52,575
Temporarily
Restricted
$ 26,920 $
Permanently
Restricted
$
- $ 26,920 71,131 $
59,514 $ 360,635
Total
$ 84,987
- 185,830
59,514 $ 270,817
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
The changes in endowment net assets for the year ended April 30, 2009, are as follows (in thousands):
Unrestricted
1 Endowment net assets, May 1, 2008
$ 258,050 Temporarily
Restricted
$ 67,129 Permanently
Restricted
$
61,307 Total
$ 386,486
Investment return:
2 Net depreciation on investments (81,087) (37,545)
3 Interest, dividends, and capital distributions
2,352 3,495 - 4 Total investment return (78,735) (34,050)
5
Contributions to endowment
- Appropriation of endowment assets for
expenditure
(4,528)(123,160)
- 5,847
(4,528)(117,313)
2,735 2,735
6
(7,904) (6,159)
- (14,063)
12,972 - 12,972
Other changes:
7 Transfers to create board-designated
endowment funds
8 Endowment net assets, April 30, 2009
$184,383 - $ 26,920 $
59,514 $ 270,817
Funds with Deficiencies
From time to time, the fair value of the assets associated with individual restricted endowments may fall below the
level that the donor or UPMIFA requires the University to retain as a fund of perpetual duration. In accordance with
generally accepted accounting principles, deficiencies of this nature that are reported in unrestricted net assets were
$82,000 and $1.4 million at April 30, 2010 and 2009, respectively. These deficiencies resulted from market fluctuations
that occurred shortly after the investment of new permanently restricted contributions and continued appropriation for
certain programs that was deemed prudent by the Board of Trustees.
Return Objectives, Risk Parameters, and Strategies
The University’s objective is to earn a respectable, long-term, risk-adjusted total rate of return to support the designated
programs. The University recognizes and accepts that pursuing a respectable rate of return involves risk and potential
volatility. The generation of current income will be a secondary consideration. The University has established a policy
portfolio, or normal asset allocation. The University targets a diversified asset allocation that places a greater emphasis
on equity-based investments to achieve its long-term return objectives within prudent risk constraints. While the
policy portfolio can be adjusted from time to time, it is designed to serve for long-time horizons based upon long-term
expected returns.
Spending Policy and How the Investment Objectives Relate to Spending Policy
The University has a policy of appropriating for distribution each year 5% of the endowment fund’s average fair value
calculated on an annual basis over the preceding three fiscal years. In establishing this policy, the University considered
the long-term expected return on its endowment. Accordingly, over the long term, the University expects the current
spending policy to allow its endowment to grow at an average of 3% annually. This is consistent with the University’s
objective to provide additional real growth through new gifts and investment return.
AMERICAN UNIVERSITY
2009–2010
63
NOTES TO FINANCIAL STATEMENTS April 30, 2010 and 2009
13.OPERATING LEASE
The University has a lease for a building that is used for student housing. The lease for the building expires in 2013.
The minimum lease payments under this agreement are as follows (in thousands):
Year ending April 30:
1
2011
$
8,607
2
2012
8,951
3
2013
2,260
$
19,818
4
Rent expense in 2010 and 2009 was approximately $8.7 million.
14.COMMITMENTS
At April 30, 2010 and 2009, commitments of the University under contracts for construction of plant facilities
amounted to approximately $7.7 million and $22.7 million, respectively. Subsequent to April 30, 2010, the University
entered into commitments with various investment fund managers totaling $32.0 million.
Contingencies
Amounts received and expended by the University under various federal programs are subject to audit by governmental
agencies. In the opinion of the University’s administration, audit adjustments, if any, will not have a significant effect on
the financial position, changes in net assets, or cash flows of the University.
The University is a party to various litigation, arising out of the normal conduct of its operations. In the opinion of
the University’s administration, the ultimate resolution of these matters will not have a materially adverse effect on the
University’s financial position, changes in net assets, or cash flows.
15.RELATED PARTIES
Members of the University’s Board of Trustees and their related entities contributed approximately $412,000 and $2.3
million during the years ended April 30, 2010 and 2009, respectively, which is included in contribution revenue in the
accompanying statements of operations. Of this amount, approximately $1.1 million and $1.5 million were included in
contributions receivable at April 30, 2010 and 2009, respectively, in the accompanying balance sheets.
16.SUBSEQUENT EVENTS
64
The University has performed an evaluation of subsequent events through July 27, 2010, which is the date the financial
statements were issued. No events were noted which affect the financial statements as of April 30, 2010.
F I N A N C I A L S TAT E M E N T S
NONDISCRIMINATION NOTICE
American University does not discriminate on the basis of race, color, religion, national
origin, sex, age, marital status, personal appearance, sexual orientation, gender identity and
expression, family responsibilities, political affiliation, disability, source of income, place of
residence or business, and certain veteran status in its programs and activities. The following persons, located at 4400 Massachusetts Avenue, NW, Washington, DC 20016, have
been designated to handle inquiries regarding the university’s nondiscrimination policies:
Dean of Students, 202-885-3300
Executive Director for Human Resources, 202-885-2451
Provost, 202-885-2127
Produced by University Publications, American University
Senior Director, University Publications
Kevin Grasty
Editors
Suzanne Béchamps, Brooke Sabin
Graphic Designer
Maria Jackson
Photographer
Jeff Watts
Writer
Charles Spencer
Contributing Writers
Sally Acharya, Adrienne Frank, Mike Unger
Other Contributors
Maggie Barrett, Jacqueline Corbett, Maralee Csellar, Cristina Fernandez-Pereda,
Lee Fleming, Casey Jacobs, Annie Lyon, Kissairis Munoz, Sarah Petrie, Ravi
Raman, Melissa Reichley, April Thompson, Mary Beth Wood
Additional Photo Credits
p. 9, courtesy of the Washington College of Law
p. 11, photos.com
p. 16, bottom, Samantha Saleh
p. 23, Stephen Voss
p. 28, bottom right, Jackie Sauter
p. 29, courtesy of Anne Mahlum
p. 32, bottom left, Knut Espen Solberg and the Royal Norwegian Embassy
p. 32, bottom center, courtesy of Michelle Risinger
p. 32, bottom right, Shoshanna Sumka
p. 33, www.photobybridget.com
p. 34, bottom left, courtesy of the U.S. Embassy to Haiti
p. 34, bottom right, courtesy of Ari Katz
p. 35, top, courtesy of the Washington College of Law
p. 36, left side, top, Nicolas Lemoine, France (Ocean for Life 2009 Florida)
p. 36, left side, bottom, Catherine Slipchenko
p. 36, bottom left, Ava Gerlitz/Universal Pictures
p. 36, bottom right, courtesy of Russell Williams
UP11-005
AMERICAN UNIVERSITY
2009–2010
39
4400 Massachusetts Avenue, NW
Washington, DC 20016