Better Than a Two-Inch Rain

Endowed Chairs Nourish Baylor’s Future

by Amanda Keys

Harry Provence, editor of the Waco Tribune-Herald from 1951-1979, has been quoted saying that a good banker is better for a city than a two-inch rain. David Lacy, president of Waco’s Community Bank & Trust, remembers hearing this bit of wisdom and suspects his father had the same idea when deciding to establish the Harriette L. and Walter G. Lacy, Jr. Chair in Banking in the Hankamer School of Business. However, this chair is not the only endowed position from which students in the Finance, Insurance and Real Estate department benefit. In fact, this single department in Hankamer boasts five endowed chairs, in concentrations ranging from entrepreneurship to investment management.

“We do have a lot of endowed chairs; in fact, probably a disproportionate number within the business school and compared to most universities’ finance departments. We’ve been very blessed,” J. T. Rose, professor of finance, holder of the Lacy Chair and chair of the department, said. “It’s a signal of prestige for the department or school that has raised funds to endow positions, because it allows the university to hire individuals who have established research records.”

Hiring topnotch scholars who are well-known in academia and, often in the professional world, benefits Baylor in many ways. Besides being published in high-caliber academic journals, such professors are often quoted in widely-read publications such as the Wall Street Journal and U.S. News and World Report.

“I examine issues that are important to everybody, not just scholars,” Bill Reichenstein, professor of finance and holder of the Pat and Thomas R. Powers Chair of Investment Management, noted. “Because of my research, when I walk into the classroom, students get someone at the leading edge of what I’m teaching.”

The resulting recognition for Baylor not only benefits students, but alumni as well. As Brian Davis (BU ’94), a financial consultant at A.G. Edwards, has experienced, his Baylor degree carries more weight every time a colleague reads aloud a quote from one of his former finance professors.

“I had a jumpstart on a lot of people in my industry because of my Baylor classes, where I learned so much about investment and planning,” Davis said.

Endowed positions also encourage professors to become better teachers, as the professors can better engage in the latest developments in their respective areas of scholarship. With constant changes in the finance and business world, ongoing scholarly development and research are necessary to keep abreast of all that students entering the working world need to know.

“Since I am actively involved in scholarship, this also motivates me to think of new and creative ways to incorporate important insights from current research into my teaching,” James Garven, professor of finance and insurance, holder of the Frank S. Groner Memorial Chair of Finance, and Risk Management and Insurance program director. “Economists like to refer to this spillover effect as a ‘positive externality.’”

In a specific example, Professor John Martin’s research in corporate governance and his analysis of Enron is of immediate relevance to the young business executives he instructs in the Executive MBA program.

“It’s been my experience over the years that everything that I’ve done in my research and writing has ultimately come back and had a significant impact in what I do in the classroom and how I do it,” Martin, professor of finance and holder of the Carr P. Collins Chair of Finance, said.

“An endowed position gives a professor security, prestige and time. Professors work so hard on research—having the endowed position allows them to do that in addition to teaching and working with students,” Ruth Collins Altshuler, the daughter of Carr P. Collins, said.

Endowed chairs in the finance department, all of which entail a research focus, permit the chairholders to split their time between teaching and research. Rather than teaching a full four-course load in the fall and spring, these endowed chairholders teach two classes per semester and devote the rest of their time to scholarship. They also take the time equivalent of a full-time summer school load to pursue their research agenda, allowing uninterrupted time for quality research, conference attendance and other professional development activities.

“Anytime someone endows a position, they are establishing a legacy, a way of funding quality faculty for years and years to come,” Rose said. “So there’s a long-term benefit to having a lot of endowed chairs. We can use those to find high-quality research faculty who bring greater academic reputation to the university, which allows us to recruit better students, which helps to recruit better faculty, and so on. There’s a chicken and egg kind of thing that goes on.”

Indeed, looking toward the road ahead is a crucial aspect of understanding the importance of endowed positions. Pat and Tom Powers, when traveling in England, observed that universities such as Oxford and Cambridge have many endowed positions that were established hundreds of years ago and still provide funds for education today.

“These positions help thousands of people for generations to come,” Tom said. “I developed a passion for seeing that children going through the education process are equipped to be professionally competitive in the years to come, and then that they will continue the process of perpetuating education.”

“My father was a long-term thinker, and he spent most of his life building foundations that would sustain themselves over time,” Lacy recalled. “I think it was an easy decision for him to endow the chair because he knew that it would pay dividends over time to three entities he loved: his profession, his town and Baylor.”

Baylor Business Review, Fall 2005

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