April 12, 2013 Re: Open Letter Concerning the Partnership with Laureate Education

Dr. Larry Edward Penley and the Board of Trustees Thunderbird School of Global Management 1 Global Place Glendale, AZ 85306-6000

Dear Board of Trustees & President Penley, We write this letter to express profound concern regarding the partnership you are exploring with Laureate Education. This concern has been echoed virtually unanimously among the alumni with whom we have spoken. We are speaking up because we have invested far too much of our time, money, and energy in our Thunderbird education and in forging strong bonds with Thunderbirds around the world to simply fold in resignation without being heard. In a recent email update on the Laureate partnership, Ann Iverson, the Chairwoman of the Board of Trustees was quoted saying We determined this partnership delivers the most value for our students and corporate customers, and the best outcome for our alumni, faculty and staff. Laureate is a proven and trusted leader in higher education. Working together, we will expand our global operations and impact. This determination is patently incorrect. We have long been concerned with Thunderbirds willingness to relax admissions criteria and take other similar measures to grow its way out of what seems to be ever amassing financial difficulty. These measures mortgage the future of the schools reputation to pay for current liabilities. But the Laureate partnership takes that line of thinking to an entirely new plane. The union with Laureate will place the Thunderbird brand on par with brands of other for-profit educators, no matter how loudly the Board protests that Thunderbird will remain independent. This process is already occurring. Simply visit Laureates website (incidentally, thats laureate.net, not even .com, and certainly not .edu). The first and largest logo that pops up is that of Thunderbird. There, front and center, Thunderbird shares honors, as the banner scrolls, with institutions of significantly lesser repute, such as ESCE (whose tagline reads ranked as one of the top 10 private business schools in France) and Santa Fe University of Art and Design. Why is this so bad? At the end of the day, if students from the partnership can represent that they studied at Thunderbird, then employers will be unable to differentiate them from other students who studied at Thunderbird. The quality of workers entering the job market with Thunderbird credentials will be even more violently uneven than it is today, and therefore the credential will become fairly meaningless, as are MBAs issued today by most for-profit education companies.

Nonetheless, something must be done to save Thunderbird, which seems adrift. The school throws gala balls to commemorate the renovation of a watch tower even as it grasps desperately at ways to escape its debt, including selling its very brand and reputation. Arent there more sensible options? REDACTION: Thunderbird wishes it known that the tower renovation and gala were paid for with student gifts. Though this doesnt change the point that the school was spending on non-essential items at that time, it does demonstrate the power of Thunderbirds to come together for the school. Its hard to know, because the school does not have an open and authentic dialogue with its alumni about its problems. It is difficult to find any annual reports on the web site or on the web generally (by contrast, best-practices institutions such as Harvard have annual reports available at the touch of a button). The last Thunderbird report that is readily available is from spring of 2008, in which the school posts positive trends in both revenue and net assets. In bold print, the headline article, titled On Solid Ground, trumpets *Thunderbirds+ fortunes have turned around and the school has found its footing. That was published at the nadir of the financial crisis. In that report, Thunderbird claimed roughly $50 million of liabilities, of which $27 million were longterm debt. This is on revenue of nearly $60 million. We have no idea if those numbers remain accurate today, but the schools financial predicament does not seem insurmountable. If the 2007 numbers hold, and Laureate is, as the Board has stated, paying off the debt, then Laureate is buying the Thunderbird brand for less than 6 months of revenue. This is an egregiously low price for a school that asks students to value their Thunderbird experience at around $100,000 each. More distressing is that in 2007, only $2.6 million was generated by giving. My.thunderbird.edu lists roughly 42,000 alumni. Thats annual giving of only $62 per alumnus. As abysmal as that result appears, it also provides a window into opportunity. If the school were able to elevate that by even just $50 per alumnus, it would be ample to amortize current long-term debt, assuming that debt is at a reasonable interest rate. But that goal is set far too low. Again as a best-practices example, Harvard generates nearly tenfold Thunderbirds giving figure per alumnus, and thats just in gifts for current use; it doesnt include endowment or lifetime gifts. Surely Thunderbird, which sells itself to prospective students on the basis of community, can do much better than it has in this department. The unacceptably poor management of both the career center and the alumnus outreach programs (the two main drivers of alumnus engagement) shame the institution, but they also present opportunity. Very few of us have felt engaged by Thunderbird since matriculation (as evidenced by the paltry rate of alumnus giving). Exploring that opportunity first seems like such a simple and inexpensive step to take before choosing to sell the schools brand and reputation on the cheap. To that end, we propose the following: 1. Recruit high-quality people to run the career center and alumnus outreach programs. Many of us would volunteer our efforts if called upon to save the school.

2. Re-open communication with stakeholders about the state of the school. Everyone suspects that something is profoundly wrong, but the problem cannot benefit from the attention of Thunderbirds wonderfully business-minded alumni if no one knows how bad it is. Additionally, no one will give meaningfully if they dont have full transparency. 3. Consider right-sizing rather than growing. This includes faculty, staff, assets, and students. Having a scarcity of high-quality Thunderbird graduates will be a much more powerful guarantor of the schools future than will commoditizing the degree. 4. If all else fails, consider closing the doors or being subsumed by a reputable educational institution. The people to whom Thunderbird is most beholden are its current and former students. There is no mandate that it continue to pump out graduates regardless of the reputational cost to those core stakeholders.

We hope the Board will understand that we write this missive out of a desire by all to protect Thunderbird, the global community of alumni and supporters, and our Thunderbird investment. Its not too late to change course. We urge the Board, in the strongest possible way, to set aside work with Laureate, and to tap the schools existing resources to preserve and develop our collective asset. There are other solutions besides meretricious partnerships.

Sincerely, Toby Prosky (07) Gabriela Barragan (08) Ryan Stevens (08) Michael Hart-Stattery (08)