A Capital Quest

Quest University Class of 2013 | BCBusiness
When they enrolled, the class of 2013 wasn’t sure whether the school would survive until graduation.

Founders of Quest University have pioneered a new model for university education in Canada. Now they just have to find a way to pay for it

It’s the day before graduation and Quest University Canada president David Helfand is standing beside a freshly dug hole on the grounds of the Squamish campus, dressed in a well-worn blue-striped suit, his white beard flipping in the wind. Beside him is a flowering cherry tree ready for planting along a pathway at the front of the campus, which is on the edge of Garibaldi Provincial Park, wrapped in forest with a snow-capped mountain backdrop and blue lakes below.


Images: Ian Smith/Quest
University
David Helfand.

Gathered around Helfand is a small group of parents, students and teachers (called “tutors” at Quest) about to witness a historic moment. It’s the first time a graduating class has planted a tree on the school grounds, in what will become a new annual tradition. Even though the Class of 2013 was the third group to graduate since Quest opened in 2007, it wasn’t until now that B.C.’s only private, secular, non-profit university has been ready to plant roots.

The start was a rocky one for Quest: construction delays meant its first batch of students was forced to live and learn off campus for the first few months, early enrolment was disappointing, financing was tenuous and internal struggles saw the university cycle through four presidents in its first 13 months. Students wondered whether Quest would last long enough for them to graduate.
This precarious start was acknowledged by Helfand as he gave the graduation address this past spring. “When you arrived in the fall of 2009… our financing was, to be generous, creative. Our reputation was non-existent.” He then turned to the graduates seated before him dressed in their black robes and caps and thanked them for their role in “keeping Quest alive.”

Today, Quest’s finances are stabilizing as both its student population and reputation grow. In 2012, for the third year in a row, Quest ranked No. 1 among Canadian universities in the National Survey of Student Engagement, a study conducted by Indiana University’s Center for Postsecondary Research that allows students to rate their education. Quest is entering the 2013-14 school year with an enrolment of about 550 students—30 per cent more than last year—and is forecasting it will now reach its maximum capacity of 650 students in the 2014-15 academic year, two years ahead of schedule.

The positive momentum is good news for Quest as it prepares to move to its next phase. Starting in the 2015-16 school year, its startup money is scheduled to run out, leaving Quest to fend for itself. While it has been preparing for this, with a business plan that aims to keep it on course as a privately funded university for the foreseeable future, it’s a goal that won’t be easy to achieve. Enrolment must stay on target and Quest will need to keep raising private funds if it wants to be in the black—a challenge at the best of times, but more so when the economy is slow.

For a university that calls on its students to “question everything,” the question has to be asked: Will Quest survive and prosper?
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Quest is not the only private post- secondary university in B.C., or Canada, but is distinct in being the only private university to operate as both a not-for-profit and without ties to a particular religion. Quest is also the first university in Canada to run on the so-called “block plan,” according to Helfand. Based on a program designed by Colorado College in the U.S. in the 1970s, this education model sees students take one class at a time over a three-and-a-half week period instead of juggling three or four courses at a time, as is the case with most other universities. The Quest course load is also different: students graduate with a mixed liberal arts and science degree, a relatively new concept in Canadian post-secondary education. What’s more, there are no academic departments at Quest, and it has a strict policy of ensuring there are never more than 20 students in a class.

The cost of a Quest education also sets it apart from other universities in Canada. Its published tuition fee is $29,000 for the 2013-14 school year, although about three-quarters of Quest students receive scholarships and do not pay that full amount. (The school declines to specify how much they do pay.) According to Statistics Canada, Quest’s advertised tuition fee is more than four times the average for public Canadian universities and colleges, and a few thousand dollars more than most international students pay for an education at a public university. (Quest’s full tuition fee does not vary for domestic and foreign students; in 2013-14, about 55 per cent of Quest’s students will come from Canada, 33 per cent from the U.S. and the remaining 12 per cent come from other parts of the world.) The tuition doesn’t include $9,150 in room and board per student and most students are required to live on campus unless they are attending part-time, are married or are over 25.


Chancellor David Strangway.

Enrolment numbers to date suggest there is a growing market for Quest’s unconventional education paradigm. The university’s unique model has also captivated many in the academic community, including a handful of professors who have spent time at the university to study its inner workings. A few have even gone back to their own institutions and tried to emulate parts of the Quest program. So far at least two universities—the University of Northern B.C. and Algoma University in Ontario—are testing the block-plan program in some departments.

“Quest is a noble experiment,” says Richard Kool, president of the Confederation of University Faculty Associations of B.C. “We all need to look at it and learn from it, both from its successes and things that may not work well… I don’t think we have enough innovation in higher education in Canada.”

It was that belief that drove David Strangway to start Quest shortly after retiring as president of UBC in 1997. Strangway grew disheartened by what he saw as the commoditization of post-secondary education, arguing that the combination of funding cuts, overgrown class sizes and greater focus on research over teaching has shortchanged today’s post-secondary students. Strangway wanted to create something more intimate and more in-depth for the next generation of students. “The whole concept was that it would be a place like Quest is today, small, and where all of the faculty and students know each other,” Strangway tells me. “It’s unbelievable to think this was just an idea a long time ago, and now it’s real. It’s really gone better than I really ever imagined it could have.”

It was a long and arduous journey to this point. Strangway’s first task in the late 1990s was to get the provincial government to grant the school, originally called Sea to Sky University, official university status. After much lobbying, the B.C. government passed the Sea to Sky University Act in May 2002, giving Strangway’s project the credibility it needed to secure funding necessary to get off the ground. Alongside founding directors Peter Ufford, UBC’s former vice-president of external affairs, and fundraising lawyer Blake Bromley, Strangway formed a foundation to handle the funding, house donations and pay for Quest’s $110 million startup costs. Money came in from a number of private donors, including two Montreal-based foundations with a history of supporting Canadian universities: The J.W. McConnell Family Foundation donated $2 million in seed money, while the R. Howard Webster Foundation put forward $500,000 for the library. Much of the remaining funding came from the Stewart and Marilyn Blusson Foundation. Philanthropist Stu Blusson, a career geologist best known for co-discovering the Ekati diamond mine in the Northwest Territories, is hesitant to say exactly how much he put forward, only that he wrote “a lot of cheques” that totaled more than $75 million. It was enough to leave Quest debt-free when it opened its doors in the fall of 2007. “A debt-free campus when you’re private makes an enormous difference,” says Strangway.

Quest continued to raise and borrow money to stay afloat, particularly in its early years. In 2007, the school was provided a $10-million loan from the McConnell Foundation as a “program-related investment,” money that the foundation says was repaid in full, with interest, two years later. As Quest’s operating budget increased, so too did its enrolment, including tuition and room-and-board costs to help keep the lights on. Quest’s annual operating budget for the 2013-14 school year is about $23.9 million: 32 per cent of that goes toward financial aid and scholarships; 30 per cent in salaries for tutors (their median salary is slightly below equivalents at other B.C. universities) and other staff; 20 per cent for food and housing; and 18 per cent for operating and capital costs. As a registered charity, Quest also receives some tax breaks. For instance, it doesn’t pay real estate taxes and receives a partial rebate on GST/PST.

About 77 per cent of Quest’s current budget comes from current students’ payment for tuition and room and board, while another four per cent is ancillary income from summer activities such as renting out campus facilities. The remaining 19 per cent comes from a mix of old and new fundraising, the percentage of which will change significantly over the next two years. In the current year, three per cent of Quest’s budget is from new fundraising, while 16 per cent is money set aside from the original startup donations. Next year, the original fund will represent only 11 per cent of Quest’s budget, before drying up. That gives Quest two more years to reach what it expects will be an annual $1 million target for fundraising, money that will be used exclusively for scholarships. Quest has already started fundraising to ensure this hole is constantly filled, achieving a total of more than $1.1 million over the past two years.

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These ongoing fundraising efforts have turned Helfand, a former astronomy professor at New York’s Columbia University, into more than just Quest’s president, but also its chief marketing officer. In the 2012-13 school year, Helfand promoted Quest in 16 cities across North America, not just recruiting new students, but also seeking donations from Quest parents, friends and anyone with a belief in its educational philosophy. In 15 of those cities, Helfand says, Quest parents turned up unannounced to advocate for the university. “They just go on. It’s much more effective than me talking,” said Helfand. “At the end I say, ‘Remember: They’re paying us.’”

When it comes to marketing Quest, there are no better salespeople than its students. Weiyi Zhao, known at Quest at “Evon,” graduated this spring and is already talking about donating funds to Quest once she starts making enough money in her career, which she hopes will be in communications. Zhao, who attended the Maple Leaf International High School in Dalian, in northeast China, says Quest was the only university she applied to. “It was a risk, but it was worth it,” she says. In fact, it was Zhao’s parents, retired from their careers at the Industrial and Commercial Bank of China, who encouraged her to attend Quest, even before the school had graduated a single student. Asked at their daughter’s graduation in late April if they ever worried Quest might shutter before her four years were up, Zhao’s mother nodded yes, while her father shook his head, indicating no. “I think everyone here at some point was worried,” said Zhao. She recalled Helfand was always honest and transparent about the school’s delicate financial situation.

Class of 2012 graduate Hassaan Rahim was so intent on attending Quest that he turned down a full scholarship and free room and board at UBC in exchange for a 90 per cent tuition-only scholarship at Quest. Rahim also worried at times about the school’s survival, particularly during his first year. “I had a lot of doubts. I would knock on David’s [Helfand] door every other month and say, ‘Are we going to make it?’” Helfand reassured him.
In a May 28 letter to Quest parents and supporters this year, Helfand describes 2013 as “an important turning point” in the university’s development, citing rising enrolment figures and the success of some of its graduates to date. He drops names of graduate schools that Quest alumni now attend, such as the London School of Economics and UBC’s Sauder School of Business, as well as some jobs they have in fields that range from banking to non-governmental organizations. In another show of success, Helfand also points to a 65 per cent “yield rate” for Quest students, a benchmark universities use to measure how many students accept admission. Not only is Quest’s rate above its expectation of 45 per cent, Helfand claims, but it’s above the average yield rate of 58.9 per cent for Ivy League across North America.

“While the news really is just about all good, much remains to be done,” Helfand writes in his letter. For Quest, that includes attracting more students and demonstrating that recent rising admissions are “not a fluke.” Helfand then calls on parents to help spread the good word. To make it happen, Helfand is organizing “Quest clubs” in cities such as Calgary, Toronto, Seattle and Denver, where a good concentration of alumni—and their parents—live. The clubs will be a place for participants to support recruitment, advise applicants and “take prospective parents out for coffee to calm their fears” about Quest, Helfand writes.

The clubs will also be a good venue for Quest as it continues its fundraising efforts. Its charity status should offer incentives to donors in Canada and Quest is in the process of setting up a registered charity in the U.S. in the hope of luring U.S. donations as well.

Like most Canadian universities, Quest will need to rely on private donations to keep going. However, unlike public universities, it won’t have public funds to fall back on. This is how Helfand and other Quest supporters want the school run—completely free of public money. They fear that once the government steps in it could erode Quest’s independence.

The suggestion of any government involvement sends a chill down the spine of Blusson, whose donation to Quest was the largest ever given out by his foundation. It’s also one of the largest donations ever given to a Canadian university. Blusson, who sees himself as a disrupter in his field, not unlike Quest, says he would consider donating more money to Quest in the future if it meant continued emancipation from the public university system. “The advantage of Quest being independent is that you can do all these new things you can’t do in [other] universities,” said Blusson. “If you are going to be a free-thinking group, you’re on your own.”