About two years ago, Jamie Merisotis got a phone call from a recruiter who was searching for a new head of Lumina Foundation for Education, a private foundation based in Indianapolis. As a well-known expert in higher education, he had taken many such calls before, and he happily suggested a few good candidates. “Of course,” Merisotis says, “the punch-line question was: ‘Well, what about you?’” Merisotis wasn’t looking for a job—he loved running the Institute for Higher Education Policy (IHEP), a Washington, D.C.-based public policy think tank that he founded in 1993. “I literally hadn’t thought about making a move until that point,” he says. “I hadn’t been in a job interview in 15 years.” Still, the opportunity held appeal. With assets of just over $1 billion, Lumina is the nation’s largest foundation focused exclusively on higher-education access and success, issues on which Merisotis had focused much of his career. Through his work at IHEP, he had come to know the foundation as a fair and useful organization, and had been impressed by the staff.
He wasn’t familiar with the foundation’s board, however. “I wanted to get a sense of what it would be like to work with this board in my relationship as CEO,” Merisotis says. After meeting with the board, he came away impressed by the caliber of the directors and their commitment to, and involvement in, the organization. Lumina board members serve on committees that have authority over the foundation’s budget, investments, salaries, and other issues, and they are very active in setting the foundation’s direction. Merisotis also appreciated that he would be a member of the board, an arrangement he believed would enable him to rely on the other directors for candid and constructive feedback. “It’s more of a peer relationship,” he says.
The board was equally impressed, says board chairman John Mutz, who has also served as Lieutenant Governor of Indiana and president of the Lilly Endowment, one of the largest private foundations in the country. There were other strong candidates who emerged from the nationwide search, but Merisotis’ background in public policy made him stand out. “We see public policy as important to move the needle,” Mutz says.
The foundation had started to look for new ways to leverage its influence beyond grantmaking, and Merisotis seemed just the person to bring it to the next level and help achieve one very big goal. On January 1, 2008, he took the helm as president and CEO. As only the second person to hold that position, he has begun to reshape the way Lumina approaches its work.
New light on new problems
Lumina Foundation was created in the summer of 2000 when USA Group—at the time the largest private guarantor of student loans in the country—sold its assets to Sallie Mae. The proceeds of the sale, $400 million in cash and $370 million in Sallie Mae stock, formed the basis of the new foundation.
“It’s an unusual opportunity to be able to set up a private foundation from scratch,” says Mutz, who had been a member of the board of USA Group. During the merger, the two companies swapped some members of their boards; Mutz stayed and helped lay the groundwork for the foundation.
A twist of fate made that opportunity even more exceptional. Shortly after the sale, the tech bubble burst and the economy went into a recession. A flood of investors began buying Sallie Mae stock, which they considered a safe haven, and the stock price nearly doubled. “We were almost overnight a $1 billion foundation,” Mutz says. “That was a gee-whiz moment.”
The foundation’s purpose was established at the very beginning: to improve access and success in post-high school education and training. But, Mutz admits, figuring out “how to go about doing this is another matter.”
Martha Lamkin, who had been an executive vice president with USA Group, became the foundation’s first president, leading an initial staff of just nine people. For starters, the new organization needed a name. Lamkin and the board wanted to distance it from the student-loan industry so that it would be seen as independent. After much brainstorming, they settled on Lumina, the Latin word for “light.”
Higher education: access and success
Under Lamkin’s leadership, the foundation focused on three major initiatives, which it continues to support to this day. The first, Achieving the Dream, was launched in 2004. It aims to use data to improve student outcomes at community colleges, which educate about half of the nation’s college students. “We thought that much more attention should be placed on community colleges, and that community colleges needed to move toward being evidence-based institutions,” says senior program director Holly Zanville.
Lumina leaders consider Achieving the Dream one of the foundation’s biggest successes: more than 80 colleges in 15 states are participating, and 19 other funders have joined Lumina in supporting the effort. “It has helped to focus the orientation of community colleges around success for students,” Merisotis says.
The second initiative, KnowHow2GO, is a partnership with the American Council for Education and the Ad Council to help 8th through 10th grades learn what they need to know to get into college—everything from which classes they need to take to how to apply for financial aid.
Making Opportunity Affordable, which is also funded by the Wal-Mart Foundation, is still in the early stages. The initiative seeks to improve productivity in higher-education institutions so that they can graduate more students and better meet workforce demands. “It could be one of those disruptive innovations in how colleges and universities do their work,” Merisotis says.
The Big Goal
Shortly after Merisotis arrived at the Lumina Foundation, he began talking about what’s now known as the “Big Goal”: to raise the proportion of Americans with high-quality two- or four-year degrees from around 40 percent to 60 percent by 2025.
It is, indeed, an eyebrow-raising objective. “We recognize it’s audacious,” Merisotis says, “but we also think it’s achievable—and that it’s based on solid metrics.”
The idea to establish a target that would shape all of the foundation’s efforts had started to take hold toward the end of Lamkin’s tenure. “Our original interest in this grew out of international comparative data,” says Dewayne Matthews, Lumina’s vice president for policy and strategy.
About three years ago, Matthews and others began looking at data that showed the United States had fallen to 10th place in the world in the proportion of the population with college degrees. “That was very surprising to people,” Matthews says.
Perhaps even more surprising, a closer look at the data revealed that while other countries were seeing greater numbers of young people earning college degrees, American educational attainment had been flat for the last 40 years. Contrary to the popular perception that more and more Americans are going to college, the percentage of 25-year-olds who have college degrees is roughly the same as the percentage of 65-year-olds.
“This is extremely unusual,” Matthews says. In fact, of the 30 developed nations in the Organisation for Economic Co-operation and Development, only the United States and Germany have not seen increases in higher-education attainment. The implication is that the nation is poised to fall even farther behind.
Matthews sees another message in the data. “To us, this is less an issue of competition as it is showing us that it’s possible to increase attainment,” he says. “Some people think there is a natural limit to the number of people who should go to college. We consider that attitude to be flawed.” To meet the demands of the global economy, he says, more and more Americans will need high-quality education beyond high school. Besides, on an individual level, education beyond high school is critical: “Post-secondary education has become the gateway to the middle class.”
An analysis of the data led Lumina to its big goal of a nationwide 60 percent college graduation rate. “It immediately began to change our whole approach to our work,” giving the foundation more of an outcomes-based orientation, Matthews says.
Focus on outcomes
The foundation took inventory of the tools it could use to bring about a major change—such as strategic communications and the ability to convene experts and policymakers—and began to broaden the scope of its activities to gain leverage. “The opportunity that exists far exceeds the grantmaking capacity,” Merisotis says.
His background in public policy has proven valuable. He spends much of his time speaking to various groups, and he recently testified before the Connecticut legislature. He has offered guidance and expertise to policymakers, and has forged informal partnerships with organizations that have similar objectives, including the Bill & Melinda Gates Foundation.
Merisotis wants to emphasize the “high quality” element of the big goal by working to create an aligned system of degrees and credentials. “That means a focus on learning outcomes—skills that can be applied in students’ lives and work,” he says. He also plans to do more work around improving success in remedial and development education, as well as with minority-serving colleges and universities, which are educating the fastest-growing segment of the population.
Lumina will continue to support its three main initiatives, which fit within the foundation’s strategic objectives to improve student preparation, student success, and productivity in higher education. But Merisotis does not expect to launch more major, multi-year programs. “Adding new initiatives is not something I see as terribly important to making progress on our outcomes,” he says. Instead, the foundation will focus more on exploratory work, research, and policy advocacy, as well as smaller programs that advance the core strategic objectives.
Merisotis also wants the foundation to take a leadership role in being transparent about its failures. “My view,” he says, “is that if you tested an idea rigorously and it turned out not to be a good idea, you’ve actually made a very important contribution.” How will Lumina track its progress toward the big goal? The foundation is still in the process of developing a set of metrics, but Merisotis and others say they know this isn’t a goal the foundation can achieve on its own. That’s why they were enthusiastic when President Obama, in his first address to Congress, laid out the goal of having the United States lead the world in the percentage of college graduates by 2020. “When all is said and done,” Merisotis says, “we’re not terribly concerned about who gets credit for it. What we’re most interested in is getting results.”
Denise Kersten Wills is the features editor at Washingtonian.