'Dr. No' Looks Back on Decades of Stewardship

Eric Cable

Edwin O. McFarlane
January 27, 2014

Edwin O. McFarlane, who is 69, will retire in June as treasurer of Reed College after spending more than 40 years there. In that time, the college’s endowment swelled from $4-million to more than $500-million. Here is his story, as told to Don Troop.

I was working at the University of Oregon in the financial side when a position opened up for a comptroller at Reed College. Said I would be here for five years.

The treasurer left, and after an interim period with a faculty member serving as part-time treasurer, the president asked if I wanted the job, and I said, “Sure.”

When I first got to Reed and looked at its financial statements, if you took out the value of land, it was basically operating in a bankrupt situation. Without a few angels, alumni donors, we probably wouldn’t be talking today.

Things started to turn around with the presidency of Paul E. Bragdon, who hired me. He was here from 1971 to 1988. You started seeing more development going on, and that became a much more professional effort that wasn’t just run out of the president’s office.

Reed’s endowment, like those of many other colleges, really took off in the 80s and 90s. We got into alternative investments very early on because the chair of our investment committee was a hedge-fund manager on Wall Street.

I manage all the bequests that come into the institution, but I’m not out there fund raising or investing. My role is behind the scenes.

One of the things that contributed to the growth the first year after I got here was that we all agreed that any unrestricted gift that we received from a bequest would be put into the endowment and not spent. I was pretty instrumental in that, and I’ve been instrumental since then in keeping our feet to the fire to honor that.

Some of the largest gifts that have gone to the endowment—$30-million, $20-million, $15-million—have been unrestricted bequests.

A lot of institutions spend those monies. I’ve not yet seen an educational institution that doesn’t have the capacity to spend every dollar they have. They get an unrestricted gift, it goes to operations, or it goes to a building or to some other unrestricted need that’s out there. To resist doing that has taken a lot of discipline. Sometimes I’ve been called “Dr. No.”

I’ve learned that patience can be a virtue. Sometimes you may have “the right answer” to some issue or problem, but you have a lot of other people you need to bring along with that. Everyone may not initially agree on the highest spending priority, but you try to build support for your idea without putting down the other priorities that are there. And that just takes time.

One thing that is certainly a change from 40 years ago is that there are a lot more rules and regulations governing institutions. For example, when I started here we had a night watchman, just one guy. He went around and punched the clock in the night and lowered the flag at dusk and that was it. Now you have a whole community-safety office that’s professionally trained to deal with all the various issues on campuses and the reporting you have to do.

There are new laws on retirement reporting and changes in health care. All of those things get put into the mix. Whether they’re good or bad for us as a society as a whole and institutions as a whole, I’m not going to comment or make a judgment on that. But it means there’s a lot more going on in terms of reporting and accountability.