Rice University
Report of the
President
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lis is a report about people,
jpropriately, in all photo-
oksiheieiiassour cameras have
jeople in their
L.,vtsj>'ersity settings.
Ctured here are students,
ichers, staff members, alumni,
d friends whose accom^
ishments comprise much of
■? news of the 1975-76 year.
jPrinted here also, in the outer
ciargins of the following pages,
are remarks made by Rice stu-
dents who have reflected upon
-the past year and its mea»im:<»«for
^em. They compris'
aitatives ^"^^*'""'
they were^,'
tike 1976
ice alumni
From the
President
This report is about people, and the reasons for
this are only too obvious. Ours is a highly per-
sonal enterprise. If Rice is a uniquely fine place
to spend four or more years of one's life, it is not
because of subjects taught, books available, or
degrees offered. It is because of Rice people.
They make this a splendid place to study, to
acquire habits, to refine the skills of the mind,
to discipline the imagination with experience.
In no year past have people done so much,
given so much, that this university might main-
tain economic stability. On June 30, 1976,
Rice looks very good on paper. Rice stands in
one of the nation's truly dynamic cities with
an adequate endowment, a fine faculty,
and students with uncommon potential for
achievement. Rice has concerned and generous
alumni who continue to distinguish themselves,
and by association the university, in every en-
deavor imaginable. Rice's independence is
secure. The budget is balanced.
The Rice class of 1976 is a typically good one.
It was principally two members of the class who
breathed life into the idea of a university-wide
convocation this year. The convocation was an
extraordinary gathering. Rice had had none for
almost a decade.
In the class of '76 also are Rice's first woman
NROTC graduate and a Watson fellow. Rice's
eleventh in six years. And one gentleman at-
tended the May 8 Commencement Exercise to
receive no less than three diplomas, one PhD
and two master's degrees.
The undergraduate class which entered Rice
last August made news by virtue its having a pro-
portion of National Merit scholars larger than that
in any other freshman class in the nation. Enter-
ing graduate students were of outstanding quality
also. Rice has great reason to be proud of all who
are studying and carrying on research here today.
As the year began well, it ended well too; the
job market was more accomodating to Rice
graduates — at all levels — than anticipated.
After polling colleges and universities in the
Houston area, the local news media concluded
that Rice alone enjoyed an increase in the number
of companies interviewing on campus.
Publicity generated by the scholarship of our
freshmen or the demand for our graduates, how-
ever, could not rival that which grew from "Rice
Institute of Technology" being mentioned as a
beneficiary in one of the several wills alleged
to be that of former Rice student Howard
Hughes. Visions of scholarships danced in our
heads, briefly. However, the chances of Rice
receiving any of the late Mr. Hughes's financial:
fortune are quite remote.
Far and away the 1976 event of most finan-
cial consequence to Rice was the commence-
ment of the Brown Foundation matching funds
challenge, announced in April. The challenge
constitutes an unprecedented opportunity, with
a potential value to Rice of over $40 million
during the coming decade.
The first year of the development campaign is
crucial because it sets the tempo for the project
and, once set, it is difficult to change. We begar
the Brown challenge with only seven months
remaining in the first year, so Rice is most fortu-
nate to have had the most successful annual
fund drive in its history during fiscal 1975-76.
The chance of our meeting the first year's goal
and thus qualifying for $1 ,325,000 in Brown
Foundation matching funds would have been
slight if this were not the case.
The importance of our meeting the chal-
lenge's financial goals each year can hardly be
overemphasized. If we are to maintain the uni- -
versity at a level of real distinction, we must
begin now to summon great energy and to tap
new resources. The opportunity is here, but Rice;
will profit only to the extent that all of us — gov-
ernors, administrators, faculty, alumni, parents
of students, corporations, foundations, and other^
Rice friends — seize it, matching the Browns'
commitment and generosity with our own.
This largest single grant in Rice history was
made by the Brown Foundation as it marked the
twenty-fifth anniversary of its establishment by
Mr. and Mrs. George R. Brown and Mr. and
Mrs. Herman Brown. It ranks as one of the truly
great gifts in the history of American higher
education, and it places the greatness of Rice's
future squarely in our hands today.
The Brown challenge has transformed the
coming decade into one of even greater impor-
tance than anticipated. The appointment of a
distinguished accounting educator to till
the dean's chair in the Jesse H. Jones Graduate
School of Administration indicates that the
coming decade will see an entirely new dimen-
sion added to the university. The deanship of
Rice's newest academic and administrative unit
I was awarded to Dr. Robert R. Sterling, Jesse H.
Jones Professor of Management and professor of
accounting. His appointment is a major step
along the road toward the official opening of the
school, now scheduled for fall 1978.
Interest in the Jones School suggests that it
I will satisfy educational needs long recognized
;but unfilled in our region. The probability that
the school will quickly take a place among
the nation's most respected graduate schools
appears excellent.
As the Jones School progressed through its
formative stages, the athletic department began
some reorganization with the arrival of Head
Football Coach Homer Rice, appointed in
January. Mr. Rice brings to our university a
record of accomplishment as teacher, author,
coach, and athletic director. After only six
months his positive effect on our program
is very evident. I have confidence that this
will continue.
Along with the good fortune that has come
to Rice this year, some bad has come also.
Rains fell for hours here on June 15 and se-
verely flooded the campus. Estimates of the
damage total $300,000. Hardest hit was the
Rice Memorial Center, where four feet of
water completely submerged the bar in
Willy's Pub, much ot the station equipment
in KTRU-FM, the bookstore, band hall, and
equipment room.
Power ceased at Rice at 5:00 P.M. sharp that
Tuesday, and in some areas it was not restored
for several days. The telephone system and
some elevators, all maintained by non-staff
personnel, remained unrepaired two weeks
after the flood.
I have included a more complete report
of these and other important events during
1975-76 on the following pages.
It tails to me here in my introduction to
record the deaths this spring of two most
beloved people, Emmett A. Brunson and
Radoslav A. Tsanoff.
Emmett Brunson, a native Houstonian, came
to Rice in 1925 as a freshman, and during his
undergraduate years had won several Southwest
Conference track titles. He left the university
for a brief period after graduation, but returned
in 1934 to become coach of the track and field
team. As coach, he was instrumental in the
development of a program of the very highest
caliber. He excelled also in the office of business
manager for athletics during part of his thirty-
six year career at the university.
Radoslav Tsanoff, a native of Sofia, Bulgaria,
a student in Constantinople, came to the
United States in 1903. He took degrees at
Oberlin and Cornell before his arrival at Rice
in 1914 as the Institute's first philosopher. His
career as teacher, scholar, and friend of Rice
spanned sixty years when, as Carolyn and Fred
McManis Professor of Philosophy, he retired in
1973. While here he helped found the Rice
Chapter ot Phi Beta Kappa and the Houston
Philosophical Society. He authored or contrib-
uted to fifteen books, was a patron of the fine
arts and, as is written on the Rice University
Medal of Honor presented him in 1962, was
"a champion of the moral foundations of the
spiritual life of man." With his wife, the late
Corrinne Stephenson Tsanoff, he welcomed
generations of Rice students into the Tsanoff
home. Hundreds of his friends and former stu-
dents returned to Rice in 1970 to witness his
acceptance of the Association of Rice Alumni
Gold Medal for Distinguished Service. Dr. and
Mrs. Tsanoff enjoyed a sixty-four year marriage
before they died this spring in Austin within
two months of one another. The quality and
the length of their service to Rice may never
be surpassed.
As we enter into one of the most challenging
decades in all Rice history, we will do well to
remember the commitment to high purpose
which so characterized the lives of Coach Brun-
son and Dr. Tsanoff. Rice continues to this day
to enjoy the standing which by achievements
they and others with them earned. No common
measure of diligence and dedication will main-
tain this standing in the future.
Norman Hackerman
President, Rice University
Ueorge R. Brown
President Norman Hackerman
"f
•*lNi.
I
VI^^H
Thenar's
Highlights
The Schools: A Dedication, New Deans, and
an Inaugural Concert. The university continued
to explore the potential for broadening the offer-
ings of its professional schools — the George R.
Brown School of Engineering, the Jesse H. Jones
Graduate Schciol of Administration, and the
Shepherd School of Music.
Significantly, the university's convocation in
February ended with the consensus that "profes-
[sional education has a definite place" in Rice's
undergraduate curriculum, while adding also that
"those responsible for the organization of profes-
sional programs should encourage students to
enroll in appropriate liberal arts courses."
Against this background, the dedication of
the George R. Brown School of Engineering, on
November 12, 1975, is one of the major events of
the year under review. The ceremony was viewed
as more than a tribute to Mr. George Brown '20,
and his dedicated support of and service to the
university. It was, in fact, a rededication, to
Rice's continuing standards of excellence in
engineering education and professionalism.
Earlier in the year, Dr. Alan J. Chapman, a
distinguished Rice alumnus of the class of 1945
and an engineering practitioner and educator
with a national reputation, had been named
dean of the school. Dr. Chapman's appointment
stressed the renewal of Rice's traditional com-
mitment to innovative and effective engineering
research backed by superior teaching.
The Jesse H. Jones Graduate School of Ad-
ministration began operations during the year
under its first dean, Dr. Robert R. Sterling, an
internationally known accountant and educator.
Following the formal establishment of the
Department of Accounting, an integral part of
the Jones School, the university awarded
fifty -three Master of Accounting degrees at
the 1976 Commencement.
Dean Sterling continued his search for addi-
tional faculty for the Jones School in order to
prepare for the first class of candidates for the
master's degree.
The year also saw the start of instruction at the
Shepherd School of Music under Dean Samuel
Jones. The school's formal opening was marked
by an inaugural concert September 19, 1975,
in which Dr. Jones conducted the Houston
Symphony. This event was followed September
21 by the debut concert of the Shepherd Quartet.
The school offers a unie]ue and comprehensive
curriculum for careers in symphony orchestras.
Endowed Chairs to Warme, Newport; Cameron
Chair Established. Two important endowed pro-
fessorships were filled during the year. Dr. John
E. Warme, an oceanographer and professor of
geology, became the first W. Maurice Ewing
Professor of Oceanography. The Ewing Chair
honors the memory of the famed geophysicist-
oceanographer who received his bachelor's,
master's, and Ph.D. degrees from Rice between
1926 and 1931. The late Dr. Ewing was well ac-
quainted with Dr. Warme's underwater research
in various parts of the world.
Dr. John P. Newport, one of the outstanding
theologians and teachers in the Southwest, was
appointed this year to the newly created Harry
and Hazel Chavanne Chair of Religious Studies.
The university named the new professorship to
honor the Chavannes (Harry Chavanne '33)
whose $500,000 gift made establishment of the
professorship possible. Dr. Newport, a widely
published author, had served at Rice as visiting
professor of religious studies in the fall of 1971
and again during the 1972-73 academic year.
This year also the Harry S. Cameron Chair in
Mechanical Engineering was established, funded
through a $ 1 million gift from the Harry S.
and Isabel C. Cameron Foundation. This pro-
fessorship honors the memory of the late founder
of the Cameron Iron Works. It brings to thirty-
three the number of endowed chairs at Rice.
Fifteen Faculty Receive Promotions. Fifteen
faculty members were promoted during the
1975-76 academic year. The promotions in-
cluded these ten to the rank of full professor:
Katherine Tsanoff Brown '38, Neil Havens
'56, and David G. Parsons, all in the fine arts
department; Drs. Walter W. Isle and Robert
L. Patten, both in the English department;
Dr. Hugh R. Anderson, space physics and as-
tronomy; Dr. John Hempel, mathematics; Dr.
Francis L. Loewenheim, history; Dr. Richard
A. Tapia, mathematical sciences, and Dr. Ame
Troelstra, electrical engineering.
Promoted to the rank of associate professor
Damuei jone;
)hn Mewpon
Katherine Tsanoff Brown
Alan Chapman
John Anderson
Baker College
Senior, History'
"It's hard really to assess
the impact that the 1976 Con-
vocation had on the university
community. Forme, personally,
involvement in the planning
and implementation of the pro-
gram is the highlight of not only
this year hut of my entire four
years at Rice.
"I remember a remark Dr.
Garside made once to the effect
that a university is not altogether
different from a road to Athens.
What should one he doing on a
road to Athens? you ask. The an-
swer is that the road to Athens
is a good place for conversation.
"Conversation is just what the
Convocation Committee sought
to stimulate. Many people here
are concerned over the trend
toward professionalism in the
Lindergraduate program. Worse,
they have felt cut off from discus-
sion and decision-making. The
convocation I think succeeded in
articulating these concerns."
were James B. Blue, fine arts, and Dr. Kenneth
W. Kennedy '67, mathematical sciences. Drs.
Terrence A. Doody, English, and Raymond J.
Talbot, space physics and astronomy, were
promoted to associate professor for a three -
year term. Dr. Robert D. Rundel becomes
adjunct associate professor of space physics
and astronomy.
Top Honor Goes to Burrus. Since their estab-
lishment in 1967, the George R. Brown Awards
recognizing outstanding achievements in teach-
ing at Rice have continued to draw attention to
this very important aspect of the university. For
the 1975-76 academic year, the annual George
R. Brown $4,000 Prize for Excellence in Teach-
ing was awarded to Dr. C. Sidney Burrus '58,
professor of electrical engineering and master
ot Lovett College.
The six annual $1 ,000 George R. Brown
Awards for Superior Teaching went to Dean
Alan J. Chapman '45, professor of mechanical
engineering; Dr. Gilbert M. Cuthbertson, asso-
ciate professor of political science; Dr. Harry A.
Deans '53, professor of chemical engineering; Dr.
Charles Garside, Jr. , associate professor of his-
tory; Dr. William C. Martin, associate professor
of sociology; and Dr. David Minter, professor of
English and master of Baker College.
Five of the seven were also winners in either
or both of the past two years. Burrus earned an
award for Superior Teaching in 1969, 1974, and
1975. The Brown Prize for Excellence in Teach-
ing went in 1974 to Dr. Deans and in 1975 to Dr.
Martin, who had received an Award for Superior
Teaching in 1974. Dr. Garside received a Brown
Award for Superior Teaching in 1974 and 1975,
Dr. Cuthbertson in 1975.
Faculty Receive International Honors. Among
the many other honors which came to faculty
members during the year were two prestigious
awards from France and one each from Germany
and Italy. Dr. Virgil W. Topazio, dean of
Humanities and Social Sciences, was named Of-
ficier dans I'Ordre des Palmes Academiques, and
Eh". Madeleine R. Raaphorst, who chairs the De-
partment of French and Italian, was named
Chevalier in the same Ordre. Both were honored
for contributions to the advancement and dis-
semination of French culture m the United State; 'H
Dr. John R. Rath, Mary Gibbs Jones Professor
of History, was elected foreign corresponding i f
member of the Historical Commission for the ij l
Venetian Provinces in Italy, an honor recognizin|i P
his previous contributions to Austrian History. ■
Dr. Rath is founder and editor of the Austrian '
History Yearbook and a member of the Austrian '
National Academy of Sciences. In addition, Dr. '
Rath is the new president of the six-state South- il
western Social Sciences Association. ^
Dr. Frederick D. Rossini, professor emeritus of
chemistry, was awarded Germany's Carl Engler
Medal in recognition of his outstanding contribu- ii
tions to petroleum research over the past several »
decades. ll
Dr. William E. Gordon, dean of the School of
Natural Sciences, was this year elected vice-
president of the International: Scientific Radio
Union in addition to being elected to the board ol
tmstees and the executive committee of the Uni-
versity Corporation for Atmospheric Research.
Four Rice faculty members received Alfred P.
Sloan Fellowships during the year: IDrs. W. Ed-
ward Billups and Paul S. Engel, associate profes-
sors of chemistry; Dr. F. Reese Harvey, professor
of mathematics; and E)r. Frank B. Dunning, assis-i
tant professor of space physics and astronomy.
Also during the year, Dr. Alexander J.
Dessler, professor of space physics and astronomy
and manager of campus business affairs, was ap-
pointed president of the Universities Space Re-
search Association.
President Norman Hackerman was elected to a i
second two-year term as chairman of the Nationa
Science Board, the governing arm of the National
Science Foundation. He is currently in his second
six -year term as a member of the board.
Over $5 Million in Grants Awarded. Rice
faculty members continued their high rate of
success in obtaining research funds from govern-
ment and private sources during the year.
Faculty members in the science, engineering,
and humanities divisions submitted 293 proposalsi
to potential funding sources during the year. A
total of 139 grants and contracts amounting to
$5,562,321 in new funds were awarded during
the same period.
At the end of this academic year, 240 grants
Ii
Ijean Cackovvski
Sol Spiegelman
Richard \i. Cyert
Ada Louise Huxrahle
land contracts were active on campus.
Fondren Collection Nears a Million Volumes.
In October 1975 Fondren Library entered a new
phase of operation, introducing a computer as-
sisted system tor ordering and receiving library
materials. This development eliminated most
manual operations through the use of Datapoint
■5500 computer for data entry and storage and
the IBM 370 at Rice's Institute for Computer
Services and Applications for major processing
operations.
Other applications have been implemented
and changes in existing applications were insti-
tuted to provide better control and to enhance
the library's operation.
Rice's library collection continues to be good,
despite increasing restraints on purchasing
power. Added to the collection last year were
19,400 new titles, including over 1,000 for
the developing Shepherd School of Music cur-
riculum. Additions to serial runs and sets as well
as documents and reports brought the serial
volumes -added count to 41 ,555, making the fis-
cal year end count 917,432. The net addition of
18,115 microforms brought the total to 937,849.
The music library this year experienced new
activity and reorganization, and an extensive
reserve collection was opened to support the
music school's offerings.
The art library saw utilization of its facility
increase by over 40 percent during this period.
With space for books and readers now hard to
find, plans for an art and architecture library
within Fondren have been made, but await
adequate funding.
New Football Coach Takes Over. The appoint-
ment of Homer Rice as the university's head
football coach was the most significant athletic
event of the year.
Mr. Rice's record of accomplishment is out-
standing. A native of Kentucky, he graduated
from Centre College and Eastern Kentucky
University. As a high school coach from 1951
through 1961 his football teams compiled a re-
cord of 101 wins, 9 losses, and 7 ties. He coached
collegiate football at Kentucky, Oklahoma, and
Cincinnati before becoming athletic director at
North Carolina in 1969.
Two Firsts at the Sixty-third Commencement.
The 1976 Commencement featured two "firsts"
for Rice. Jean M. Cackowski became the first
woman ensign to be commissioned from Rice's
Naval Reserve Officers' Training Corps Unit.
She graduated with a Bachelor of Arts degree
in May after majoring in biochemistry. Ms.
Cackowski was on the President's Honor Roll for
all eight semesters of her studies at Rice and was
chosen an Arthur B. Cohn Scholar and member
of Phi Lambda Upsilon, an honorary chemical
society.
Also at the May 8 Commencement was David
Walraven, the first Rice graduate to receive three
advanced degrees simultaneously. Walraven re-
ceived a doctorate in space physics and astronomy,
a master's degree in the same discipline, and a
master's degree in geology.
It was Dr. Walraven's pioneering study of
telemetry from Rice University balloon-borne
experiments that proved the presence of nuclear
radiation at the center of our galaxy.
Number, Popularity of Public Lectures In-
creases. Community interest continued in the
university's traditional series of public lectures,
including the President's Lectures and the Brown
Foundation-J. Newton Rayzor Lectures. Speak-
ers and their subjects included Dr. Richard M.
Cyert, president of Carnegie -Mellon University,
"Some Simple Truths About TTie Economy"; Dr.
Sol Spiegelman, director of the Institute of
Cancer Research and professor of human genetics
and development. College of Physicians and Sur-
geons, Columbia University, "Molecular Evi-
dence for Viral Agents in Human Cancer"; Mrs.
Ada Louise Huxtable, architecture critic of the
New York Times and member of its editorial
board, "The City: The Impossible Dream"; Mr.
Harry Bridges, then president of Shell Oil Com-
pany, "Some Thoughts on America's Future."
TTie university also opened to the public a
number of topical seminars presented by the
campus -based Energy Research and Education
Foundation (EREF). The series focused on ef-
forts by the science and technology components
within industry, government, and the academic
world to make the United States energy self-
Loretta Mauldin
Brown College
Junior, Chemical Engineering
"Classroom education is ver\'
important, but there's lots more
to this university than going to
classes, studying, and making
Is. That is why 1 think it is im-
portant that we develop more
college-to-college activities, and
provide more and different op-
portunities for social interaction.
Willy's Pub has done a kit for us
all. People who might not go
to parties or other planned, or-
ganized activities — or even visit
around the colleges — are now
stopping by the pub for a beer
atter going to the library. I have
met people there that I've never
seen at any other campus activity
except classes."
The Rice Players' production ot The Visit
Frank Vandiver and The Hon. Arabella Greaves
Jacqueline Gibson
Jones College
Freshman, Accounting
"I decided to come to Rice be-
cause I knew it would be a chah
lenge, and I foun kly
that the sort of sti; .- ;; that
got me through high school
wouldn't do it here. So I've
learned discipline and how to
schedule my time. Being in the
college is an advantage because I
can study with other students,
stay up as late as I need to. If I
need help it's usually just dovvn
the hall."
sufficient. The subjects covered ranged from
the latest in laser applications to the challenges
of harnessing solar energy.
Also concerned with the nation's energy prob-
lem was a talk delivered on campus last February
by Lieutenant Governor of Texas William P.
Hobby '53. He addressed the tenth annual meet-
ing of the four-state South-Central Section of
the Geological Society of America. Four hundred
geologists from Texas, Arkansas, Oklahoma, and
Kansas attended the event.
Ties with Houston and Houston- area com-
munities were enhanced still further by a wide
range of lectures and presentations in more
specialized areas that were available to the public
free of charge. The latter included the fifth an-
nual W.V. Houston Memorial Lecture delivered
by Dr. Freeman Dyson, a distinguished physicist
from the Institute for Advanced Study, Prince-
ton, New Jersey. The lecture series honors the
memory of Rice's second president. Nobel Lau-
reate Dr. Hannes Alfven of the Royal Institute,
Stockholm, Sweden, made a return visit to
the campus this year through the efforts of the
Department of Space Physics and Astronomy.
Chief executive officers of many Houston
businesses joined faculty and staff tor three Presi-
dent's Executive Luncheons during the year.
Designed to further university -business relation-
ships, they were addressed by members of the
faculty, with excellent response. Faculty speak-
ers were Professors Charles F. Doran, political
science; George J. Schroepfer, biochemistry
and chemistry; and William C. Martin,
sociology. Attendance averaged 110.
Players Premiere Three for Texas. The
university's outreach into the community in-
cluded some excellent productions by the Rice
Players presented in Hamman Hall.
The 1975-76 season was distinguished by its
international scope and the fact that some plays
were made available to theatergoers in this part
of the country for the first time.
Most acclaimed were "The Visit," by the Swiss
playwright Friedrich Dilrrematt, and "Jumpers,"
by Britain's Tom Stoppard. "The Maids," by
France's Jean Genet, was another premiere pro-
duction for Texas. The players also presented
"Out at Sea," by the modem Polish writer
Slawomir Mrozek, and "The Effect of Gamma
Rays on Man-in-the-Moon Marigolds," by
the American author Paul Zindel.
First Summer Session Draws Seventy-four.
Among the innovations offered during the
1975- 76 academic year was the university's
summer school for undergraduates. It was a pilot
session, presenting courses in astronomy, En-
glish, computer sciences, psychology, political
science, philosophy, and music. Seventy-four
students enrolled in one or more of the eight
courses offered.
Conceived as a self-supporting program to
provide additional educational options for stu-
dents and to utilize the campus more fully during
the summer, the courses attracted not only Rice
students but qualified undergraduates from other
institutions. Because of its success, the program
will be continued as an experiment for two more
years to determine if Rice should make summer
education a part of its regular offerings.
Fulbright Scholars Visit Campus. In April 1976
the university helped mark the 30th anniversary
of the Fulbright Act which established the U.S.
Board of Foreign Scholarships and its programs of
international educational exchanges. These pro-
visions were broadened through the Fulbright-
Hayes Act of 1961 . Under both acts more than
45,000 Americans and 70,000 representatives of
other countries have been able to participate in
educational exchanges.
Dr. Frank E. Vandiver, provost and vice presi-
dent, welcomed two distinguished former partici-
pants in the Fulbright programs to the campus:
The Hon. Arabella R. Greaves, assistant minis-
ter for planning and development in the Ministry
of Health and Social welfare of Liberia, and Fer-
nando de Szyszlo, a Peruvian painter and one of
the best known artists in Latin America. In their
days on campus both visitors were made available
for meetings with faculty and students.
Alumni Institute Sets Mark for Enrollment.
The Alumni Association -sponsored Rice
Alumni Institute expanded its offerings this year
to attract the largest enrollment in its history.
Two complete programs were offered, one in the
fall and one in the spring.
1
I
a
!;'s Carole Simpson addrcoo^^
ents at Baker College
The first Alumni Institute, with courses run-
ling between September and November 1975,
i presented courses with a bicentennial flair, cover-
ing aspects of American art and various periods
md aspects of United States history. Under the
general banner, "The Melting Plot: Shaping
National Traditions," lectures were presented at
Rice and at a suburban location, and enroll-
ment totalled 235.
The spring Institute was presented during Feb-
ruary and March 1976 and comprised two lecture
series covering topics in science and culture. En-
jroUment in this second Institute totalled 297.
The Rice Alumni Institute follows a tradition
established by the Association of Rice Alumni
over the previous six years. The chairperson
for the 1975-76 programs was Helen Saba
Worden '38.
Continuing Education Programs Popular. In
1975-76 the Rice Office of Continuing Studies
expanded and diversified its services to the uni-
versity and the community. Courses in sciences,
arts, and humanities were offered to the public.
New courses such as modem dance, wood
sculpture, and underwater environmental aware-
ness supplemented technical short courses.
O.C.S. sponsored a six-week Literary Summer in
Great Britain, led by Dr. Alan Grob, professor of
English, and helped plan and administer a pro-
gram for twenty-five visiting students from Saudi
Arabia. Plans are underway for more educational
trips and classes abroad in 1976-77.
"Interpreting America," Rice's program of
twenty mini-courses for the U.S. bicentennial,
offered an array of fascinating, thought -provok-
ing meetings, lectures, films, concerts, and per-
formances. Underwritten by Houston National
Bank, the program attracted seven hundred
enrollments in its spring and summer sessions.
Union Warship Hatteras Discovered Off Gal-
veston. Few Rice-based events of last year drew
as much national, regional, and local attention
I as the discovery of the wreck of the Union war-
' ship Hatteras by Dr. Paul A. Cloutier and his
associates twenty miles off Galveston Island.
Dr. Cloutier, associate professor of space
physics and astronomy, received his doctorate in
space science from Rice. He combined his hobby
of scuba diving with his professional interest in
magnetometers to locate the Hatteras, which has
been at the bottom of the Gulf of Mexico since
losing a nocturnal battle with the famous Con-
federate raider Aiabama on January 11, 1863.
Rice Provost and Vice President Frank E.
Vandiver, a Civil War specialist and interna-
tionally recognized military historian, authen-
ticated the find.
Jeff Davis Papers, Volume II, Completed. Vol-
ume II of the Papers of Jefferson Davis became
generally available during the year. The second
of 20 projected volumes of correspondence and
other documents relating to the president of the
Confederacy has been edited and annotated in
the offices of the Jefferson Davis Association with
headquarters on campus. The volume covers
Davis's life from the summer of 1841 to the
summer of 1846 and reflects his career as a
young Mississippi politician and congressman.
In May 1976 the Mississippi Historical Society
passed a resolution of commendation covering
Rice and the Louisiana State University "for
sponsorship and publication of the Papers of
Jefferson Davis."
Rice Historical Commission Begins Work. The
Rice University Historical Commission was
established during the year and headed by H.
Malcolm Lovett '21 , former chairman of the
Board of Governors. Serving with him as vice
chairmen of the commission are two other
alumni, Ray Watkin Hoagland '36 and
Willoughby C. Williams '39.
Dr. Katherine Fischer Drew '44, chairman of
the university's History Department, was chosen
as project director.
The new commission is seeking $20,000 per
year for three years to hire a professional staff and
gather material for a history of Rice that takes up
where William Marsh Rice and His Institute, pub-
lished m 1972, left off.
Rice Hotel Sold, Reopened. The Rice Hotel
was sold during the year to Rittenhouse Capital
Corporation. The new owners have reopened
the Houston landmark as the Rice Rittenhouse
Hotel upon completion of the first phase of a
three -part renovation program.
Ed Pierce
Sid Richardson College
Junior, Electrical Engineering
"1 really telt that 1 was missing
out on a big part of education be-
cause I had taken no position of
leadership at Rice. So, just before
election time this year, I decided
to run for president of the Rice
Program Council. Somewhat to
my surprise, I was elected. The
big challenge now is for the RFC
to address its activities to the
university-wide student body,
cutting across college boundaries.
"The college system helps
a lot of students overcome social
obstacles and work their way
into Rice, but at the same time
it inhibits some students from
interacting with people in other
colleges. I'm hoping that RPC
activities can draw people out
into the larger community."
11
Student
Activities
Ronald Berma
Concern About 'Professionalism' Voiced at
Convocation. There was a generally serious but
positive attitude among the 2600 undergraduates
last year. Though the majority of Rice students
continue to push hard for grades and remain
concerned about future jobs and admission to
graduate or professional schools, some of them
also want to make Rice a more enjoyable place
and are concerned with the processes as well as
the formal subject matter of Rice education.
They reject the stereotype of Rice as primarily
for grade -grubbers and are willing to do some-
thing themselves to effect a change. The most
notable expression of this concern was
Convocation '76.
Initiated by students and planned by a com-
mittee of students, faculty, and alumni under the
leadership of the two vice-presidents of the Stu-
dent Association, the convocation took for its
theme. Undergraduate Education at Rice: Where
Are We Going? Though some students used the
day of cancelled classes to go to the beach or to
catch up on reading, several hundred attended
the meetings, which were spread over three days
in February. Costs of the convocation were cov-
ered by donations from the colleges, the Student
Association, and an alumna.
Following the opening address by Dr. Ronald
Berman, chairman of the National Endowment
for the Humanities, two panels of invited speak-
ers and more than a dozen workshops in the eight
colleges explored the various meanings and uses
of professionalism in relation to the goals of un-
dergraduate education at Rice. A convocation
report summarizing the discussions in the various
workshops was distributed to participants in the
closing assembly and subsequently was shared
with the whole campus community. Action is
now being taken on several recommendations
from the workshops, including the improvement
of freshman and sophomore advising and the
restructuring, where necessary, of introductory
courses to better meet the interests of non majors
as well as potential majors. The convocation
report concluded that a broadly based profession-
oriented education should continue to be an im-
portant option open to Rice students, but that all
undergraduates should also be encouraged to en-
roll in a range of appropriate liberal arts courses.
Willy's Pub is Bringing People Together. The
financial and social success story of the campus
this year was Willy's Pub. Housed in the base-
ment of the Rice Memorial Center where it offers
beer, soft drinks, and snacks, the pub has become
the favorite informal meeting place of students,
faculty, and staff in the late afternoon and eve-
ning. Members from the various colleges congre-
gate there; on-campus students meet with those
who reside off campus.
The pub paid its own costs during the year
and in addition contributed to other student ac-
tivities. A portion of the profits from the first
year of operation was channeled to offset costs
of the gymnasium's being open longer hours,
while other funds helped defray costs of the
convocation.
Some remodeling at Willy's was planned tor
the summer months, but nothing on the order of
that made necessary by the June 15 rains. Even
with staff and students working with sub-pumps
around the clock, it was days before the RMC
basement was free of standing water. Flood dam-
age was severe. Estimates on the remodeling and
refurbishing of the pub to make it ready for an
October opening run about $50,000.
Renovation Completed in Four Colleges; Fire
Damages One. The demand to live on campus in
the colleges continued to exceed available space
this year, in spite of the necessity for raising the
room and board charges. Returning students in
late August were pleased with the renovation of
rooms in the older portions of Baker, Hanszen,
and Will Rice, and with the complete rebuilding
of the Wiess commons, all of which were carried
out during the summer months of 1975.
Members of Hanszen College unfortunately
also came back to find their commons destroyed
to the foundation by an accidental fire. During
the fall the master and members of the college
worked with architects and the university admin-
istration on a new design which would provide
space better suited to the needs of the college.
Construction on the new commons began in
February with the promise every effort would be
made to complete the work for the beginning of
the current academic year. In the meantime,
with the cooperation of the Student Association,
the Rice Program Council, and the management
Beverly Allen
Baker College
Junior, Sociology /English
"Sometimes people ask me
what I plan to do with my college
education. What they don't
realize is that I am 'doing' with it
what I will always do with it; I am
experiencing a few years of in-
tense and diverse physical and
mental expansion. 1 am chang-
ing. And I love it.
"Thinking of this past year my
head is jumbled with images — of
hanging around the commons; of
sweating at the gym; and sweat-
ing over exams and papers; ot
silly pranks like sneaking into Dr.
Hackerman's swimming pool; of
the Shakespearean Feast; of shar-
ing good times and sad times.
"When I chose Rice I had no
criteria for choosing, except that
it 'sounded' like a nice place. I
had never seen the campus, I
knew only that it was a good
school in the middle of a big city
with a warm climate. I feel very
lucky."
12
Volleyball: a campus tavont
Willy's Pub
Paul Guillury
Wiess College
Senior, Managerial Studies/
Economics
"Experiences in the classrooms
have been challenging, hut I've
benefitted more than anything
from experiences growing out of
my having lived on campus. Rice
has such diversity in the types ot
people, and I've learned a lot
watching and interacting with
them. It's helped me to develop
as an individual.
"As I leave Rice, though,
1 think that it has done little
to enhance my cultural growth
as a black. Both Rice and the
black students would benefit
from the black students having
more input."
of the Rice Memorial Center, the Grand Hall of
the RMC (temporarily renamed Hanszen North)
became for one year the Hanszen Commons.
Student Services Expanded in Several Impor-
tant Areas. Student services were extended iti
two areas during the year. Established through
the efforts of the Student Association, the Law-
yers Advisory Group, composed of a group of
Houston attorneys, began offering Rice students
initial legal advice without charge. In cases in-
volving more extended assistance or representa-
tion, students are given the names of two other
attorneys to whom they may choose to carry
their problems on a fee basis.
The Foreign Student Loan Fund, made possi-
ble through a gift to the university by a local
Presbyterian church, is used for short term
emergency loans to foreign students by arrange-
ment with the director of student activities, who
also serves as advisor to foreign students.
The Academic Assurance Program, which in-
volved peer counseling of black freshmen by up-
perclass black students, was conducted during
the past spring for the second time. Funded by
the Committee on Undergraduate Teaching, the
program has been limited to black students, but if
repeated during the 1976-77 academic year, it
would include other minority groups as well.
Growth in Graduate Enrollment Slows. Enroll-
ment in Rice's program of graduate studies con-
tinued its slight upward trend during the year.
Graduate students continued to play a signifi-
cant role in the university's research and teach-
ing efforts. In the period under review, there
were 828 Class I graduate students enrolled at
Rice compared to 801 during 1974-75. Their
disciplines were almost equally divided be-
tween the humanities and science-engineering
areas. Of the total — 604 men and 224 women
— there were 748 full-time and 80 part-time
graduate students; 156 were foreign nationals.
In addition, there were 66 students enrolled in
the fifth year professional master's degree pro-
grams in engineering.
More than half of the full-time graduate stu-
dents received some type of financial support
from the university, private foundations, exter-
nally funded research grants and contracts, or
from government agencies.
A total of 3 1 7 advanced degrees were awarded
at the 1976 Commencement: 73 Ph.D.; 72
Master of Arts; 27 Master of Science; 24 Master
of Architecture; 7 Master of Architecture in
Urban Design; 2 Master in Applied Mathemati-
cal Sciences; 52 Master of Accounting; and 60
professional master's degrees in various fields of
engineering. Professional master's degrees are
now offered in 10 of the 28 graduate programs
available at Rice.
The number of postdoctoral fellows and re-
search associates participating in research with
faculty and students varied between 85 and 100
throughout the year. All of them received their
support from external sources.
Where Rice Students Come From.
1-25
26-50 m 76-100
51-75 ■ Over 100
i=
Kans
60
31
Okla
253
108
>
^^
/
Ky
64
17
Ore
67
4
T
La
455
109
Penn
197
69
Me
11
3
Rl
24
3
Ala
103
22
Md
177
27
SC
45
15
Alask
18
6
Mass
157
41
SD
10
2
Az
106
34
Mich
115
7
Tenn
175
53
Ark
99
34
Minn
58
8
Tex
12,660 1,857
Cal
1,089
77
Miss
81
22
Utah
33
5
Col
197
28
Mo
174
79
Vt
12
2
Conn
146
26
Mont
18
5
Va
299
44
Del
45
5
Neh
27
18
Wash
111
11
DC
87
7
Nev
13
2
WVa
35
3
Fla
227
75
NH
17
2
Wis
60
22
Ga
139
33
N]
182
53
Wyo
13
4
Ha
27
6
NM
173
40
Canade
76
11
Id
13
4
NY
367
113
Mex
56
23
111
236
71
NC
127
9
Puerto
Rico 15
11
Ind
70
25
ND
8
1
Other
Iowa
40
9
Ohio
180
66
Countr
es 325
230
13
Alumni
Activities
^-%
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iti
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Rice cannot |>rete7ui to take credit for the accom-
,jlishments of its alumni. Yet, if we are to assert that
Rice is an exceptional place to study, then it is our
ilumni who give substantiation to our claim. Year
ifter year. Rice alumni of all ages and in all profes-
dons distinguish themselves and, indirectly but un-
questionably, their alma mater.
Architects to Preside Over Peers. Jack
VlcGinty '56 served this year as first vice-
oresident and president-elect of the American
Institute of Architects (AIA). A partner in the
VlcGinty Partnerships, Architects, he will be
:he first Texan to serve as the AIA's president,
|n a term that will begin on January 1 , 1977. He
ind his wife, Juanita Jones McGint>' '56, live
n Houston with their two children.
Fellow architect Morton L. Levy, Jr. '55,
;ompleting a stint as the president of the Hous-
:on chapter of the AIA, has been elected vice-
Dresident of the Texas Society of Architects.
Psychiatrist Elected Gerontological Society
President. A geriatric psychiatrist for the Texas
ilesearch Institute of Mental Sciences (TRIMS)
n Houston, Charles M. Gaitz '42 became
president-elect of the Gerontological Society
during its annual meeting in Louisville, Ky. in
Dctoher 1975. The Society is a national organ-
zation of researchers, educators, and physi-
;ians working toward an understanding of
:he aging process.
Vlurphy Takes Two New Offices. The new
oresident and chief operating officer of Linbeck
^Construction Company is Walter D. Murphy
48, Rice's newly-elected alumni governor. Eve-
yn Smith Murphy '43 (Mrs. Walter) served this
/ear as first vice-president of the Association of
ilice Alumni. The Murphys live in Houston.
Rice Governor- Advisor Appointed Australian
Ambassador. James W. Hargrove '43, a Rice
governor-advisor, was appointed this year to
the position of United States Ambassador to
Australia and to the neighboring island republic
af Nauru by President Gerald Ford. Hargrove's
long record of public service includes work as
Pnited States assistant postmaster general for
finance and administration, senior assistant
postmaster general, and, most recently, special
supervisor and manager for a financially trou-
bled gas production firm. Hargrove and his wife,
Marion Smith Hargrove '43, have four chil-
dren, among them James Hargrove, Jr. '66.
Thagard Joins Eastern Transmission Board.
Warren T. Thagard '34 became a director and
vice-chairman of the board of Texas Eastern
Transmission Corporation of Houston. A
Houstonian, Thagard joined that company
in 1947 as an administrative engineer.
Insurance Company Selects New Vice-
President. The Lite Insurance Company of
North America has promoted Gordon M.
Grubbs '62, head of that company's life rein-
surance department, to the position of vice-
president. He and his wife, Mary KoUenberg
Grubbs '63, live in Wayne, Pa.
Wylie Elected to Bank Board. William E.
Wylie '66, a partner in the Houston law firm of
Lee, Brown, and Wylie and a member of the
American Bar Association, the State Bar of
Texas, and the Houston Bar Association, was
elected to the board of directors of Houston
State Bank.
Lawyer-Educator Heads Stanford Law School.
Last summer Charles J. Meyers '49 was named
Richard E. Lang Professor and dean of the
Stanford Law School. Both an educator and a
lawyer, Meyers is a member of the American
Bar Association, the Texas Bar Association and
the American Law Institute. He teaches courses
at Stanford in the law of real property, natural
resources, and environmental protection. In his
distinguished career Meyers has served as as-
sociate general counsel of the National Water
Commission and as a director of Public Advo-
cates. The author of numerous books and arti-
cles on subjects ranging from oil and gas law
to legal education, he has also served on the
advisory boards of such publications as Ecology
Law Quarterly and Environmental Law Reporter.
Meyers assumed his new academic respon-
sibilities at Stanford on September 1, 1976.
Writer Publishes Seventy-Sixth Book. Oren
Arnold '23 had four books published this year,
bringing the total of his published books to
seventy-six. Called "the dean of western
American authors" by Writer's Digest, Arnold
has been as imaginative in his literary contribu-
tions as he has been prolific. Among his recent
Oren Ar:
14
William Wvlie
Herbert Allen
William Goyen
Tracy Y. Thomas anu
L. Henry Gissel, Jr.
offerings are The Wild Centaur, a biography of
Pancho Villa; Sun Stroke! The Wit of the West;
and A Boundless Privilege, an account of Arnold's
own childhood on a farm in Henderson, Tex.
Arnold, a former editor of the Thresher, and his
wife, Adele Roesch Arnold '26, live in Laguna
Hills, Cal. and Phoenix, Ariz.
Shatto Makes the News Twice. Gloria
McDermith Shatto '54, associate dean of the
College of Industrial Management and professor
of economics at Georgia Institute of Technol-
ogy in Atlanta, attended the American Asso-
ciation of University Women's convention in
Seattle, Washington last summer. During her
stay she was featured in a Seattle Times article
dealing with sex discrimination in academic set-
tings. In early 1976, she was named to the hoard
ot trustees of Mount Berry, Georgia's Berry Col-
lege and Berry Academy. She is the first woman
and the first educator not directly linked with
the founder's family to be so honored. She and
her husband, Robert, live in Decatur, Ga.
Nathan Attends Russian Seminar. Ten Ameri-
can scientists, selected on the bases of their
expertise, status and experience in corrosion,
metallurgy, and associated disciplines, attended
a USA /USSR seminar in Russia last November
10-28. Among them was Charles C. Nathan
'40, of Abington, Pa. , a senior corrosion en-
gineer and coordinator of New Energy Sources
for BETZ Laboratories of Trevose, Pennsyl-
vania. Nathan is presently studying corrosion
problems in the petroleum, petrochemical,
paper and steel industries, and is also actively
researching coal conversion and geothermal
and solar power.
Lumsden Named Dean of Tulane's Graduate
School. Parasitologist Richard D. Lumsden
Ph.D. '65 was named dean of the Tulane Uni-
versity Graduate School last spring. An expert
on the structure of parasitic worms, Lumsden
holds three positions at Tulane: professor of
biology, professor in the School of Public
Health and Tropical Medicine, and adjunct
professor of anatomy in the School of Medi-
cine. Lumsden's appointment coincided with
another honor: his selection as president of the
Southwestern Association of Parasitologists.
First Distinguished Alumnus Award Pre-
sented. On May 8, Tracy Yerkes Thomas '21,
the first Rice alumnus to gain admission to the
National Academy of Sciences (in April 1941),
became the first recipient of the Association of
Rice Alumni Distinguished Alumnus Award.
Presented by the outgoing Alumni Association
president, L. Henry Gissel, Jr. '58, during the
Commencement Exercises, the award cited
Thomas's "scholarly attainments in and original
contributions to the field of pure and applied
mathematics." The author of 173 scholarly arti-
cles and six books. Dr. Thomas has taught at
Princeton, UCLA, and Indiana University. He
was named emeritus professor of mathematics at
Indiana in 1969. The Distinguished Alum-
nus Award, intended to recognize Rice alumni
who have made extraordinary achievements in
their chosen fields, was this year appropriately
awarded to a man whose long and illustrious
career has indeed brought honor to the school
with which he shared his early years. Thomas
and his wife, Virginia, live in Los Angeles, Cal.
Alumni Honor Alien. Herbert Allen '29,
chairman of the Rice governors since 1972, re-
ceived both the Alumni Association's Gold
Medal tor Distinguished Service and the Rice
Engineering Alumni Outstanding Engineer
Award during Rice's 1975 Homecoming
General Alumni Assembly. Allen's record of
service to the Rice community includes his
work in helping Rice build its stadium in 1950
and in establishing the residential college sys-
tem at Rice in the mid-fifties. A $400,000 gift
from Allen and his wife, Helen, in 1967 made
possible the construction of the campus's Allen
Center for Business Activities. Herbert and
Helen Allen live in Houston.
Goyen Collection Published. The Collected
Stories of William Goyen was published by
Doubleday during the fall of 1975. William
Goyen '37, writer and editor, lives today with
his wife, Doris, and son, Michael, in New York
City. Publication of his collected works came
on the heels of the reissuance of Goyen's novel
The House of Breath in a special 25th anniver-
sary edition.
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16
Financial
Review
i
From the fiscal standpoint the year that ended
June 30, 1976 was encouraging. Rice realized
increases in current unrestricted funds, re-
stricted and unrestricted endowment, in plant
funds, and loan funds.
Rice's current unrestricted funds increased by
$886,000. The importance of this should not be
overemphasized however. The increase resulted
in part from reductions in Rice's tax liability ,
when tax losses from prior years (primarily at-
tributable to the Rice Hotel) were carried for-
ward against this year's unrelated business
taxable income.
During the year restricted endowment in-
creased by almost $5 million while unrestricted
endowment grew by another $2.5 million. Cur-
rent income exceeded expectations primarily
because of higher- than- anticipated investment
earnings and the one-time reduction in taxes
resulting from a tax loss carry-forward. How-
ever, the increase in unrestricted endowment
was almost entirely the result of mandatory allo-
cations of 27.5 percent of oil and gas revenues
to the general endowment (Texas Trust Act) ,
10 percent of endowment income to the Re-
serve for Plant Improvements (charter of the
University), and the voluntary allocation of 5
percent of endowment income to the Con-
tingency Reserve (Rice policy).
The primary impact of the growth in re-
stricted endowment was enhancement of cur-
rent restricted fund programs, such as the Jones
Graduate School of Administration, the fund-
ing of new endowed chairs, and the creation of
additional scholarships and fellowships.
Funds for the physical plant increased by $1.4
million and loan funds by $700,000 during the
year. Growth in the fund for the physical plant
reflects Rice's commitments to provide for re-
novation of older campus buildings and for alt-
erations in the University's heating and cooling
systems to improve their energy efficiency. The
increase in loan funds resulted from acquisition
of additional federal monies, and, by prior ap-
proval of the board, a $300,000 transfer from
the general endowment.
Financial statistics for the year are encourag-
ing. In sum, they present a pattern of growth
which needs to be maintained to offset the im-
pact of inflation on the costs of Rice education.
Accompanying graphs illustrate various cost
increases faced during the past four years and
illustrate growth needs.
During 1975-76 Rice spent per-average-
student $5,561. The distribution of this expen-
diture as well as the sources of this revenue are
also illustrated here. Two facts are particularly
notable: first, that private voluntary giving ac-
counted for 13.7 percent of the revenue for edu-
cational expenses last year and, second, that the
"average student" (a composite graduate/
undergraduate) paid net tuition of only $1, 173,
of which $244 was in loan from the University.
Manifest here are both the fulfillment of Rice's
commitment to provide financial assistance to
its qualified students and the role which en-
dowment income plays in allowing Rice to
keep that commitment. During 1975-76 en-
dowment income was called upon to provide
revenue to meet 58 percent of the university's
educational expenses.
Here also is a point of concern, for during
the past year 25 percent of the endowment
income was derived from oil and gas, which
income increased despite a decline in produc-
tion. Unless oil and gas prices continue to rise,
this income will decline as the natural re-
sources are depleted.
In this framework, the importance of the
Brown Foundation Challange, with its great
income potential, is readily apparent.
IC
; ]
^RATUM: Page 17, pie graph of Per Student Expenses is properly Rice
otnoted General Administrative, ' and General Institutional. - ;e
DDENDUM: Page 17, percentages ( ) represented in pie graph of
;venues are: Endowment — net of transfers (58.7), Tuition — less aid
0.7), Gifts and Private Grants (13.7), Government Gifts and Con-
icts(6.5). Other (.4); in graph of Expenses they are: Instruction
7 0), Operation and Maintenance (13.5), General Administrative
1.5), Library (8.6), General Institutional (5.0), and Student
rvices (4.4).
16
Financial
Review
I
From the fiscal standpoint the year that ended
June 30, 1976 was encouraging. Rice realized
increases in current unrestricted funds, re-
stricted and unrestricted endowment, in plant
funds, and loan funds.
Rice's current unrestricted funds increased by
$886,000. The importance of this should not be
overemphasized however. The increase resulted
in part from reductions in Rice's tax liability
when tax losses from prior years (primarily at-
tributable to the Rice Hotel) were carried for-
ward against this year's unrelated business
taxable income.
During the year restricted endowment in-
creased by almost $5 million while unrestricted
endowment grew by another $2.5 million. Cur-
rent income exceeded expectations primarily
because of higher- than- anticipated investment
earnings and the one-time reduction in taxes
resulting from a tax loss carry-forward. How-
ever, the increase in unrestricted endowment
was almost entirely the result of mandatory allo-
cations of 27.5 percent of oil and gas revenues
to the general endowment (Texas Trust Act) ,
10 percent of endowment income to the Re-
serve for Plant Improvements (charter of the
University), and the voluntary allocation of 5
percent of endowment income to the Con-
tingency Reserve (Rice policy).
Tlie primary impact of the growth in re-
stricted endowment was enhancement of cur-
rent restricted fund programs, such as the Jones
Graduate School of Administration, the fund-
ing of new endowed chairs, and the creation of
additional scholarships and fellowships.
Funds for the physical plant increased by $1.4
million and loan funds by $700,000 during the
year. Growth in the fund for the physical plant
reflects Rice's commitments to provide for re-
novation of older campus buildings and for alt-
erations in the University's heating and cooling
systems to improve their energy efficiency. The
increase in loan funds resulted from acquisition
of additional federal monies, and, by prior ap-
proval of the board, a $300,000 transfer from
the general endowment.
Financial statistics for the year are encourag-
ing. In sum, they present a pattern of growth
which needs to be maintained to offset the im-
pact of inflation on the costs of Rice education.
Accompanying graphs illustrate various cost
increases faced during the past four years and
illustrate growth needs.
During 1975-76 Rice spent per-average-
student $5,561. The distribution of this expen-
diture as well as the sources of this revenue are
also illustrated here. Two facts are particularly
notable: first, that private voluntary giving ac-
counted for 13.7 percent of the revenue for edu-
cational expenses last year and, second, that the
"average student" (a composite graduate/
undergraduate) paid net tuition of only $1,173,
of which $244 was in loan from the University.
Manifest here are both the fulfillment of Rice's
commitment to provide financial assistance to
its qualified students and the role which en-
dowment income plays in allowing Rice to
keep that commitment. During 1975-76 en-
dowment income was called upon to provide
revenue to meet 58 percent of the university's
educational expenses.
Here also is a point of concern, for during
the past year 25 percent of the endowment
income was derived from oil and gas, which
income increased despite a decline in produc-
tion. Unless oil and gas prices continue to rise,
this income will decline as the natural re-
sources are depleted.
In this framework, the importance of the
ANNOUNCEMENT: Thanks to the support ofalumni and friends, Rice
University has met the full terms of the Brown Foundation Challenge
for 1976.
16
Financial
Review
i
From the fiscal standpoint the year that ended
June 30, 1976 was encouraging. Rice realized
increases in current unrestricted funds, re-
stricted and unrestricted endowment, in plant
funds, and loan funds.
Rice's current unrestricted funds increased by
$886,000. The importance of this should not be
overemphasized however. The increase resulted
in part from reductions in Rice's tax liability
when tax losses from prior years (primarily at-
tributable to the Rice Hotel) were carried for-
ward against this year's unrelated business
taxable income.
During the year restricted endowment in-
creased by almost $5 million while unrestricted
endowment grew by another $2.5 million. Cur-
rent income exceeded expectations primarily
because of higher- than- anticipated investment
earnings and the one-time reduction in taxes
resulting from a tax loss carry -forward. How-
ever, the increase in unrestricted endowment
was almost entirely the result of mandatory allo-
cations of 27.5 percent of oil and gas revenues
to the general endowment (Texas Tnist Act),
10 percent of endowment income to the Re-
serve for Plant Improvements (charter of the
University), and the voluntary allocation of 5
percent of endowment income to the Con-
tingency Reserve (Rice policy).
The primary impact of the growth in re-
stricted endowment was enhancement of cur-
rent restricted fund programs, such as the Jones
Graduate School of Administration, the fund-
ing of new endowed chairs, and the creation of
additional scholarships and fellowships.
Funds for the physical plant increased by $1.4
million and loan funds by $700,000 during the
year. Growth in the fund for the physical plant
reflects Rice's commitments to provide for re-
novation of older campus buildings and for alt-
erations in the University's heating and cooling
systems to improve their energy efficiency. The
increase in loan funds resulted from acquisition
of additional federal monies, and, by prior ap-
proval of the board, a $300,000 transfer from
the general endowment.
Financial statistics for the year are encourag-
ing. In sum, they present a pattern of growth
which needs to be maintained to olfset the im-
pact of inflation on the costs of Rice education.
Accompanying graphs illustrate various cost
increases faced during the past four years and
illustrate growth needs.
During 1975-76 Rice spent per-average-
student $5,561. The distribution of this expen-
diture as well as the sources of this revenue are
also illustrated here. Two facts are particularly
notable: first, that private voluntary giving ac-
counted for 13.7 percent of the revenue for edu-
cational expenses last year and, second, that the
"average student" (a composite graduate/
undergraduate) paid net tuition of only $1,173,
of which $244 was in loan from the University.
Manifest here are both the fulfillment of Rice's
commitment to provide financial assistance to
its qualified students and the role which en-
dowment income plays in allowing Rice to
keep that commitment. During 1975-76 en-
dowment income was called upon to provide
revenue to meet 58 percent of the university's
educational expenses.
Here also is a point of concern, for during
the past year 25 percent of the endowment
income was derived from oil and gas, which
income increased despite a decline in produc-
tion. Unless oil and gas prices continue to rise,
this income will decline as the natural re-
sources are depleted.
In this framework, the importance of the
17
Rising Costs in Rice Education:
iducational and General Expenses, 1973-76
■■igures in Millions
'Jperation
Utilities
Equipment
75-76
75-76
'Excludes student salaries and stipends
^Includes payroll benefits and general operating
Rice's Per Student Expenditure, $5,561 :
Where the Money Came From and
Where It Went.
Based on an enrollment of 3,538 undergraduate and
graduate fuUtime equivalent students per the registrar's
spring 1976 report.
Revenues
Government Grants &. Contracts
Gifts &. Private Grants
Other
Tuition (less Aid)
Endowment (net of transfers)
Instruction
General Institutional
Charged to Students
Library
Student Services
Operation &.
Mamtenance'
General
Administrative^
Tuition
Direct University aid per student
Net tuition
Average University loans
Outside sources (paid by student)
2,300
1,127
1,173
244
929
expenditures
' Includes expenses of the offices of the president,
the vice-president and provost, the academic
deans, campus business office, the treasurer's office,
commencement, and insurance.
^Includes expenses of the trustees, the offices of
development, information services, alumni affairs,
and the campus police.
18
Balance Sheet — June 30, 1976, with
Comparative Totals at
June 30, 1975
(Note 1)
Current
Funds
Endowment and
Similar Funds
ASSETS
LIABILITIES
AND FUND
BALANCES
Cash, Receivables, and Prepayments:
Cash
Accounts receivable
Loans and accrued interest receivable, net of allowance
of $499,000 and $550,000 at respective dates
for loans doubtful of collection
Prepaid expenses and deferred charges
Investments (Note 2):
Marketable securities, quoted market of $211,443,000 and
$178,377,000 at respective dates
Wholly owned corporations, at underlying equity (Note 3)
Mortgage and collateral loans
Oil and gas properties, less amortization of $28,746,000 and
$27,435,000 at respective dates
Real estate and leasehold improvements, less amortization of
$3,994,000 and $3,772,000 at respective dates
Undeveloped real estate and other
Interfund investments —
AuxiHary and educational service facilities financed from
endowment (Note 4)
Other
V
Educational Plant, at cost (Note 4):
Land
Buildings and improvements
Equipment, furniture, and library books
Construction in progress
Less — Allowance for depreciation on auxiliary and educational
service facilities
Total assets
Liabilities:
Accounts payable
Deferred income and deposits
Deposits of collateral for securities loaned (Note 6)
Retirement funds (Note 7)
Commitments and contingencies (Note 9)
Total liabilities
Fund Balances:
U.S. Government and private grants refundable
University funds —
Restricted (Note 1 )
Reserved for commitments ($261,331 unrestricted and
$351,248 restricted in 1976)
Unrestricted
Unrestricted funds functioning as endowment
Net investment in plant
Total fund balances
Total liabilities and fund balances
See notes to financial statements.
$1,394,936
358,265
160,129
1,913,330
7,831,009
7,831,009
660,148
139,400
799,548
165,270,475
920,281
4,348,335
665,649
7,285,179
2,401,121 I
9,771,502
(8,513,844)
182,148,698
$9,744,339
$182,948,246 '
$ 933,950
1,074,754
$ 1,488,287
32,324
2,981,600
1,517,886
2,008,704
6,020,097
679,696
—
2,133,851
50,187,601 1
612,579
4,309,509
68,940,728 i
57,799,820 ,'
7,735,635
176,928,149 I
$9,744,339
$182,948,246
19
1
]une 30, J 976
Plant Funds
Loan Funds
Total
June 30,
1975,
Total
5
$ 15,771
$ 1,410,707
$ 1,417,772
1,018,413 803,225
3,807,758 3,807,758 3,091,908
— 299,529 429,178
3,823,529 6,536,407 5,742,083
814,840 17,570 166,102,885 158,578,536
— — 920,281 954,576
— — 4,348,335 5,180,801
— — 665,649 1,153,968
— — 7,285,179 6,361,670
— — 2,401,121 2,293,679
(9,771,502)
400,824
282,011
(8,555,838)
299,581
340,525
56,219,544
24,513,618
913,214
—
81,986,901
4,323,706
—
77,663,195
—
$69,107,357
$4,123,110
$ -
$ —
181,723,450 174,523,230
340,525 340,525
56,219,544 53,871,357
24,513,618 23,015,526
913,214 793,542
81,986,901 78,020,950
4,323,706 3,819,993
77,663,195 74,200,957
$265,923,052 $254,466,270
$ 2,422,237 $ 825,477
1,107,078 1,466,430
2,981,600 4,351,900
1,517,886 1,431,186
8,028,801 8,074,993
— 2,072,023 2,751,719 1,861,316
915,664 577,439 53,814,555 47,850,009
_ — 612,579 794,820
300,000 1,473,648 75,023,885 71,557,500
— — 57,799,820 57,608,346
67,891,693 — 67,891,693 66,719,286
69,107,357 4,123,110 257,894,251 246,391,277
$69,107,357 $4,123,110 $265,923,052 $254,466,270
20
Statement of Changes in Fund Balances for the
Year Ended June 30, 1976
(Note 1)
n<
Current Funds
Unrestricted
Restricted
Revenues and Other Additions:
Educational and general revenues
Auxiliary enterprises revenues
Gifts and bequests — restricted
Grants and contracts — restricted
Investment income — restricted
Oil and gas royalties
Realized gains (losses) on investments
Distributions from wholly owned corporations (Note 3)
Distributions of income from assets held by trustees
Interest on loans receivable
U.S. Government advances
Expended for plant facilities (including $1 ,629,982
charged to current funds expenditures)
Reduction of allowance for loans doubtful of collection
Total revenues and other additions
Expenditures and Other Deductions:
Educational and general expenditures
Auxiliary enterprises expenditures
Indirect costs recovered
Decrease in underlying equity of wholly owned corporations (Note 3 )
Refunded to grantors
Provision tor retirement benefits (Note 7)
Loan cancellations *•
Administrative and collection costs
Expended for plant facilities (including noncapitalized
expenditures of $4,943)
Retirement ot plant assets (Note 4)
Total expenditures and other deductions
Transfers Among Funds — Additions (Deductions):
Mandatory
Matching grants and gifts
Provision tor plant improvements (Note 8)
Funding of current unrestricted expenditures for equipment (Note 8)
Provision for contigencies (Note 8)
Unrestricted gifts and investment income allocated
Other voluntary transfers, net
Total transfers
Net Increase (Decrease) for the Year
Fund Balance at Beginning of Year
Fund Balance at End of Year
$22,066,050
5,058,624
27,124,674
19,083,367
5,038,444
24,121,811
(1,183,106)
875,670
(591,553)
(935,474)
(282,270)
(2,116,733)
886,130
3,684,710
$4,570,840
$1,391,56(
78,72
2,876,93
7,305,52
2,048,84
13,701,57'
10,194,24('
124,34,
1,418,28
25,92
11,762,79!
(5,60i
(984.71'
(990,31:
948,46)
2,216,33;
$3,164,79?
See notes to financial statements.
21
i
Endowment and Similar Funds
Plant Funds
Income
j Restricted
Income
Unrestricted
Functioning
as Endowment
Unexpended
Investment
in Plant
Loan Funds
3,172,772
612,510
$ —
3,695
$ —
$ —
41,627
54,531
$ -
48,550
$ -
58,000
7,820
(168,073)
3,617,209
1,332,055
272,406
874,005
2,482,161
245,967
245,967
105,030
119,547
209,189
—
2,276,377
51,057
201
,188
2,324,927
445,613
34,295
,000
—
—
—
—
—
15,384
—
—
—
—
—
22,192
544,461
106,877
—
—
—
—
—
1,152,520
1,152,520
—
—
34,295
1,424,461
(174,277)
106,877
37,576
174,277
5,601
—
—
1,183,106
—
—
—
—
—
(875,670)
—
—
—
—
—
591,553
—
—
—
—
—
935,474
—
—
—
1,189,893
1,364,170
4,981,379
(50,000)
(50,000)
2,397,866
(290,218)
1,369,968
191,474
126,089
126,089
220,400
—
291,218
296,819
1,172,407
704,856
45,206,222
66,542,862
57,608,346
995,264
66,719,286
3,418,254
$50,187,601
$68,940,728
$57,799,820
$1,215,664
$67,891,693
$4,123,110
22
Statement of Current Funds Revenues, Expenditures and
Other Changes for the Year Ended June 30, 1976, with
Comparative Totals for 1975
(Notel)
Year Ended June 30, J 976
Unrestricted
Restricted
Total
Year Ended
June 30, ]97i
Total
Revenues:
Educational and general —
Student tuition and fees
Government grants and contracts
Gifts and private grants (Note 5)
Endowment income (Note 2)
Sales and services of educational and
service departments
Other sources
Auxiliary enterprises
Total educational
and general
Total revenues
Expenditures and Mandatory Transfers:
Educational and general —
Instruction and departmental research
Sponsored research
Other sponsored programs
Library
Student services
Operation and maintenance of plant
General administration
General institutional
Student aid
Educational and
general expenditures
Mandatory transfers for —
Provision for plant improvements (Note 8)
Loan fund matching grant
Total educational
Auxiliary enterprises
and general
Total expenditures and
mandatory transfers
Other Transfers and Additions (Deductions):
Excess ot restricted receipts over transfers
to revenues
Refunded to grantors
Funding of current unrestricted expenditures for
equipment (Note 8)
Unrestricted gifts and investment income
allocated
Provision for contingencies (Note 8)
Other voluntary transfers, net
Net increase in
fund balances
See notes to financial statements.
$ 7,605,311
1,298,519
1,256,194
11,831,061
61,343
13,622
223,767
4,454,716
2,522,294
2,048,842
960,628
39,129
$ 7,829,078
5,753,235
3,778,488
13,879,903
1,021,971
52,751
$ 7,005,896
5,777,056
3,084,833
13,363,927
803,163
78,212
22,066,050 10,249,376 32,315,426 30,113,087
5,058,624 69,215 5,127,839 4,679,759)
27,124,674 10,318,591 37,443,265 34,792,846
)
7,967,263
3,255,046
11,222,309
—
4,708,050
4,708,050
—
1,215,367
1,215,367
1,551,279
133,997
1,685,276
777,529
80,861
858,390
2,387,981
270,917
2,658,898
2,228,700
32,259
2,260,959
977,361
11,582
988,943
3,193,254
486,167
3,679,421
19,083,367
10,194,246
29,277,613
1,183,106
1,183,106
10,186,486'
4,712,777,
1,297,680'
1,533,915.
728,281-
1,847,4301
2,339,7401
710,9401
3,500,539i
5,601
5,601
26,857,788
1,135,418
10,410
20,266,473
5,038,444
10,199,847
124,345
30,466,320
5,162,789
28,003,616
4,826,430
25,304,917 10,324,192 35,629,109 32,830,046
1,964,703
(25,928)
875,670
(935,474)
(591,553)
(282,270)
(984.712)
1,964,703
(25,928)
875,670
(935,474)
(591,553)
(1,266,982)
22,321
(29,310
729,163
(108,145:
(567,709)
198,244
$ 886,130$ 948,462 $ 1,834,592 $ 2,207,364
Notes to Financial Statements
une 30, 1976
23
1 ) Summary of significant accounting policies —
5asis of accounting —
The financial statements of William Marsh Rice Uni-
I'ersity have been prepared suhstantialiy on the accrual
oasis of accounting except for depreciation accounting
Explained in Note 4 below. To the extent that current
junds are used to finance plant assets, the amounts so
;orovided are accounted for as expenditures. To the extent
'hese expenditures are funded from the reserve for plant
mprovements (Note 8) , such amount is transferred from
:ndowment and similar funds. The statement of current
lUnds, revenues, expenditures, and other changes is a
statement of financial activities of current funds related to
the current reporting period. It does not purport to pre-
sent the results of operations or the net income or loss for
the period as would a statement of income or a statement
Df revenues and expenses.
Fund accounting —
In order to ensure observance of limitations and re-
strictions placed on the use of available resources, the
■accounts of the university are maintained in accordance
with the principles of "fund accounting." Fund account-
ing is a procedure by which resources are classified for
accounting and reporting purposes into funds that are in
accordance with activities or objectives specified. Al-
though separate accounts are maintained for each fund,
funds that have similar characteristics have been com-
hined into fund groups and all financial transactions have
been reported by those fund groups in the accompanying
financial statements.
Within each fund group, fund balances restricted by
outside sources are so indicated and are distinguished from
unrestricted funds allocated to specific purposes by action
of William Marsh Rice University's Board of Governors,
Externally restricted funds may be utilized only in accord-
ance with the purposes established by the soutce of
such funds.
Gains and losses arising from the sale, collection, or
other disposition of investments and othet noncash assets
are accounted for in the fund which owned such assets.
Ordinary income derived from investments, receivables,
and othet assets is accounted for in the fund owning such
assets, except for income derived from investments owned
by endowment funds, which income is accounted for in
the fund to which it is restricted or, if unrestricted, as
revenues in unrestricted current funds. Restricted current
funds receipts are reported as revenues and expenditures
when expended.
Current funds
The unrestricted current fund is used to account for
those transactions related to the university's operating
budget as apptoved the the Board of Governors.
The restricted current fund is used to account for funds
expended for operating purposes but restricted by donors
or other outside agencies as to the specific purpose for
which they may be expended, and is also used to account
for resources which have been designated for specific pur-
poses by the university administration. The restricted
current fund balance includes approximately $639,000 at
June 30, 1976, and $669,000 at June 30, 1975, of admin-
istratively designated funds. Receipts and expenditures of
such funds during 1976 included in the statement of
changes in fund balances and the statement of current
funds revenues, expenditutes, and other changes, were
approximately $1,500,000.
Endowment and similar funds —
Endowment funds are generally subject to the restric-
tions of gift instruments requiring m perpetuity that the
principal be invested and the income only he expended.
While funds functioning as endowment have been estab-
lished by the Board of Governors for the same purposes as
endowment funds, any portion of funds functioning as
endowment may he expended at the disctetion of the
Board of Governors.
Income restricted endowment funds genetally represent
gifts and bequests received by the univetsity for which
the donors have stipulated that the principal is to be
maintained inviolate and income resulting from invest-
ment of the funds may be expended for specified purposes.
To the extent that programs have not been established foi
the specified purposes, or if the investment income ex-
ceeds the program expenditures, such income is added to
the endowment fund balances. In addition, certain funds
which are expendable but restricted by donors as to the
specific purpose for which they may be expended have
been designated by the Board of Governors to function
as income testricted endowment funds. The income ac-
cumulated, together with funds designated to function as
income restricted endowment funds, included in the in-
come restricted endowment fund balance at June 30,
1976, IS approximately $7,857,000. This portion of the
funds may he expended, at the discretion of the Eioard of
Governors, to fulfill the funds' restricted purposes.
Other endowment funds consist of income unrestricted
endowment funds, including the founder's endowment,
and funds functioning as endowment. Income unte-
stricted funds tepresent gifts and giants togethet with
allocated realized capital gains and losses that are main-
tained inviolate. Income earned by investment of these
funds may be expended for unrestiicted operations.
Loan funds —
Loan funds include gifts and grants which are limited
by donors to the purpose of making loans to students ot
faculty and funds of the university which have been des-
ignated by the Board of Governors as loan funds. Also
included in these funds is the National Direct Student
Loan Program financed primarily by the Federal govern-
ment and administered by the university.
Plant funds —
Plant funds consist of the total invested in the educa-
tional plant together with unexpended gifts, grants, and
reserves which are held for acquisition, replacement, ot
construction ot physical properties.
(2) Investments —
Investments are recorded at cost at date of acquisition
or fair market value at date of donation in the case of gifts,
except fot investments in wholly owned corporations
(Note 3) and cettain donated interests in undeveloped
real estate which are recorded at a nominal value plus
costs incurred for taxes and maintenance (approximately
$124,000 in 1976 and $121,000 in 1975) subsequent to
the date of acquisition.
Premiums or discounts applicable to nonconvertible
bonds are amortized over the life of the bonds. Realized
gains and losses on the sale of marketable securities are
determined by the average cost method.
Most income restricted endowment funds participate in
a common pool which is operated on a market value basis.
Those income restricted funds which by the terms of the
gift do not permit participation in such a pool are main-
tained on a sepatate investment basis.
Othet endowment funds, together with intetfund in-
vestment amounts of other funds, are commingled for
investment purposes in the general investment pool.
Interfund investments do not share in the general invest-
ment pool's gains and losses but are allowed inteiest.
Income from investments in marketable securities as a
per cent of total investments in marketable securities and
net gain on sales is as follows:
Total /nvestmenu m Yield Yteld Realized
Markelable Secunnes on on Gain on Sales
atjuneiO (In 000' s) Cost Market (JnOOO's)
Cost
Market
1976 $166,103 $211,443 5.3% 4.2% $302
1975 $158,579 $178,377 5.7% 5.0% $477
Poftions of investment income from oil and gas prop-
erties and improved real estate held for investment are
retained in the endowment funds for the purpose of asset
recovery. The portion of real estate investment income
retained in the endowment funds is approximately equal
to that percentage of net receipts which will recover the
cost of impiovements ovei their estimated lives. A cor-
responding amount is recorded as amortization of real
estate and real estate improvements in the endowment
funds until the cost of the improvements has been fully
recovered. Real estate investment income not retained
in the endowment funds is recognized as endowment
income in the current funds as described in Note 1.
Of the investment income from oil and gas properties,
27V2 percent of the net receipts from properties acquired
prior to July 1 , 1972 , and teceipts in excess of an 8
per cent annual rate of tetum on the unamortized cost of
properties acquired subsequent to July 1, 1972, are re-
tained in the endowment funds. Corresponding amounts
are recorded as amortization of the separate ptoperty
groups (properties acquired prior to July 1, 1972, and
properties acquired after that date) until the property
groups have been fully amortized, at which time 27 Vz per
cent of the net receipts from the properties continues to
be retained in the endowment funds. Net receipts not
tetained in the endowment funds ($3,531,528 in 1976
and $3,260,229 in 1975) are recognized as endowment
income in the cutrent funds.
24
(3) Investments in wholly owned corporations —
The financial statements include all assets, liabili-
ties, and fund balances of the univetsity except cettain
sepatately incorpotated hut telated entities for which
the university is fiscally responsible. These corporations
are included in the endowment and simular funds bal-
ance sheet at underlying equity. In the accompanying
statement of changes in fund balances, distributions to
the current funds are mcluded in educational and gen-
eral revenues. Condensed financial statements of these
corporations follow:
CONDENSED STATEMENT OF HNANCIAL
POSITION
JUNE 30, 1976 AND 1975
1976 1975
Gas production
payments
Marketable securities,
quoted market of
$466,541 and
$433,070 at respec-
tive dates
Real estate and other
assets, at cost or fair
market value at date
of donation
Total assets
Long-term debt, secured
by gas production
payments
Other liabilities
Total liabilities
Investment in wholly
owned corporations,
at underlying equity
as mcluded in the
accompanying
balance sheet
$20,434,258 $15,754,457
503,532
505,222
496,518
625,556
21,443,012 16,876,531
20,434,258
88,473
15,754,457
167,498
20,522,731 15,921,955
$ 920,281 $ 954,576
CONDENSED RESULTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1976
AND 1975
1976 1975
Revenues
$ 3,046,456
$ 2,672,705
Expenses
2,112,704
2,095,531
Income before distribu-
tions to the university
933,752
577,174
Distributions —
To current unrestric-
ted revenues
94,042
73,501
To unrestricted
endowment
874,005
481,237
968,047
554,738
Increase (decrease) in
underlying equity of
wholly owned cor-
porations as included
in the accompanying
statement of changes
in fund balances
$ (34,295) $ 22,436
(4) Educational plant —
TTie educational plant is stated at cost. No provision
is made for depreciation of educational buildings and
equipment. Six and two-thirds percent of capitalized
equipment is charged off (retired) each year.
Depreciation charges ($504,000 and $394,000 in 1976
and 1975, respectively) have been made to educational
service and auxiliary operations for recovery of the cost of
facilities used in these operations and which are not fi-
nanced by gifts and grants. These charges are based sub-
stantially on estimated useful lives and are intended to
reimburse endowment funds for amounts advanced to
fund auxiliary and educational service facilities. In addi-
tion, interest ($359,000 and $293,000 in 1976 and 1975,
respectively) at rates ranging from 4 to 12 percent on the
unreimbursed amounts advanced has been charged to
educational service and auxiliary operations and is in-
cluded in endowment income.
(5) Gifts —
Gifts of $585,360 received during the year for unre-
stricted operations have been deterred tor use during the
1976-1977 academic year. Gifts of $487,103 received dur-
ing the prior academic year are included in current unre-
stricted revenues. Other than those gifts deferred, gifts are
included in revenues or added to the appropriate fund
balances only when received, and, accordingly, pledges or
assets held by trustees will he recorded as gifts when re-
ceived.
Pledges outstanding, which are not recorded in the
accompanying financial statements, are as follows:
;un£30
1976
1975
Current funds —
Unrestricted
Restricted
Total current funds
Plant and endowment
funds
Total pledges
$ 120,000 $ 176,000
1,232,000 1,042,000
1,352,000
5,685,000
1,218,000
6,242,000
$7,037,000 $7,460,000
Assets having a market value of approximately
$3,900,000, consisting of marketable securities, mort-
gage loans, and real estate were held by ttustees at June
30, 1976, pending distribution to the university from
estates and are not recorded in the accompanying finan-
cial statements.
(6) Deposits of collateral for securities loaned —
The University received $2,981,600 as collateral depos-
its for certain securities temporarily loaned to brokers.
As of June 30, 1976, the securities on loan amounted to
$2,800,399 at cost (market $2,980,726) and die collat-
eral deposits were invested in short-term paper.
( 7 ) Retirement plans —
During 1976, the university completed revision of its
policies relating to administration of its retirement plans
to comply with the provisions of the Pension Reform
Act of 1974. Substantially all employees are eligible to
participate m the Teachers Insurance and Annuity Asso-
ciation-College Retirement Equities Fund (TIAA-CREF)
Retirement Plan tot Faculty and Staff (a defined contri-
bution plan). After amendment to the plan in 1976, all
benefits are vested and are administered by TIAA-CREF.
Pension costs, including cost of past service benefits
and a projected amount for certain minimum benefits
totaled $1,070,000 in 1976 and $974,000 in 1975
and were recorded as current funds expenditures.
Effective July 1, 1976, the university adopted the
TIAA Direct Payment Group Annuity Plan which pro-
vides for the administration by TIAA of all minimum
retirement benefits and all past service benefits for eligible
employees of the university and benefits accumulated for
retired employees under a predecessor plan. During 1976,
the Ekiard of Governors designated $880,000 of funds
functioning as endowment to be added to the retirement
funds in order to recognize the actuarially computed net
present value of these benefits. These funds are payable
to TIAA in nine annual installments subject to actuarial
revaluation based on actual experience and funding
by TIAA.
(8) Provisions for plant improvements and
contingencies —
Transfers equal to 5 percent of unrestricted endow-
ment income, as a provision for contingencies, and 10 per-
cent, as a provision for plant improvements, have been
made from current unrestricted funds to funds functionin
as endowment. Current unrestricted expenditures for
equipment ($875,670 in 1976) and certain other plant
additions ($544,461 in 1976) are funded by a charge
against the reserve for plant improvements.
Balances of funds functioning as endowment reserved
for contingencies and reserved for plant improvements
were $2,071,229 and $548,423, respectively,
at June 30, 1976.
(9) Commitments and contingencies —
The Internal Revenue Service has reviewed certain of
the university's tax returns covering the periods ended
June 30, 1971 through 1974, and has assessed additional
taxes on certain items which it deems to be "unrelated
business income." The amount of additional taxes as-
sessed together with estimated interest thereon to June
30, 1976, is $1,120,462. TTie university is contesting th
assessment in its entirety and is awaiting a determination
from the Internal Revenue Service District Director.
Should the assessment ultimately be upheld, the univer-|j|
sity would also be liable tor additional taxes on "unrelatec il
business income" for periods subsequent to June 30, 1974
Such additional taxes for the two years ended June 30,
1976, if assessed, would not materially affect the financial
position of the university. I
There are several suits and claims pending against the !|l
university, the effect of which cannot be estimated at th
time; however, legal counsel for the university believe
that the ultimate liahiliry, if any, will not be material to |
the university's financial position. |
The university was committed under contracts at
June 30, 1976, for capital improvements of approximateh
$1,200,000 to be financed primarily from funds function- '|
ing as endowment.
AUDITORS' REPORT
To the Board of Governors,
William Marsh Rice University:
We have examined the balance sheet of William
Marsh Rice University (a nonprofit Texas corporation)'
as of June 30, 1976, and the related statements of
changes in fund balances and current funds revenues,
expenditures, and other changes for the year then
ended. Our examination was made in accordance
with generally accepted auditing standards, and accord-
ingly included such tests of the accounting records and
such other auditing procedures as we considered neces-
sary in the circumstances.
In our opinion, the accompanying financial state-
ments present fairly the financial position of William
Marsh Rice University as of June 30, 1976, and the
changes in fund balances and the current funds reve-
nues, expenditures, and other changes for the year then
ended, in contotmity with generally accepted account-
ing principles applied on a basis consistent with that of
the preceding year.
ARTHUR ANDERSEN &. CC
Houston, Texas
October 11, 1976
inistration
Board of Governors
■luiman Hackerman
resident
rank E. Vandiver
■i;fi>vost and
;President
lam W. Akers
fP resident for
pal Affairs
I L. Margrave
lof Advanced
les and Research
l^diaerine Tsanoff Brown
pean of Undergraduate
\ffairs
pavid A. Crane
pean of the School of
\rchitecture
'" n J. Chapman
iof the George R. Brown
il of Engineering
iam E. Gordon
Dean of the School of
Natural Sciences
Trustees i
He rbe rt Allen '
Chairman
James U. Teague
Vice Chairman
Mrs. Anthony J. A. Bryan
E. D. Butcher
C. W. Duncan, Jr.
Robert R. Herring
William H. Lane
Shepherd School of
/lusic
lobert R. Sterling
pean of the Jesse H. Jones
jraduate School of
\^dministration
iVirgil W. Topazio
Dean of Huruanities and
)ocial Sciences
Alexander J. Dessler
Manager of
i^ampus Business Affairs
ermMeml
^^Harry J. CHl _.„.,
William S. Parish, 111 :
Gerald D. Hines '
Miss Mary E. Johnstod
Baine P. Kerr
Theodore N. Law
Stanley C. Moore
Ralphs. O'Connor
Alumni Governors
Richard A. Chapman
Mrs. David Hannah, Jr.
Frank B. Ryan , ,, ., ,, ,
Talbott Wilsori'
Trustees Emeriti';
George R. Bror
Mrs. WiUiaj "
John S. Ivy
W. A. Kirk
H. MalcolmliSv'
Jack C. Pollard
Gus S. Wortham
Howard B:
Wendel Ui
J. Hugh Liedtk
J. W. McLean
James R. M,m~
JohnW.r
HaylettC
impson
]. Smith
Milton R. Underwood
James O. Winston, Jr.
Benjamin N. Woodson
Leo S. Shamblin
Treasurer-Secretary
D. D. Lovell
Assistant Secretary
Joseph Nalle
Assistant Secretary and
Manager Mineral
Investments
J. R. Persons
Comptroller
Rice University
Annual Report of the President
P.O. Box 1892 Houston, Texas 77001
Address Conection Requested
Non-ProfitOrg.
U.S. Postage
Paid
Permit No. 7549
Houston, Texas
o
o
— h
■D
III IS
Rice University
Annual Report of the President
RO. Box 1892 Houston, Texas 77001
Address Correction Requested
Non- Profit Org.
U.S. Postage
Paid
Permit No. 7549
Houston, Texas
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