Wanted: A Campus That Looks Like America

Guess who's pushing a bold plan for diversity? Big Business

For more than two decades, U.S. courts have been limiting affirmative-action programs in universities and other areas. The legal rationale is that racial preferences are unconstitutional, even those intended to compensate for racism or intolerance. For many colleges, this means students can be admitted only on merit, not on their race or ethnicity. It has been a divisive issue across the U.S., as educators blame the affirmative-action backlash for declines in minority admissions. Meanwhile, activists continue to battle race preferences in courts from Michigan to North Carolina.

Now, chief executives at State Farm; BusinessWeek's parent, The McGraw-Hill Cos.; Boeing; GlaxoSmithKline; and about two dozen other companies have decided to plunge headfirst into this politically volatile debate. In January, a group of 25 corporations, 36 universities, and 7 nonprofits called the Business-Higher Education Forum set forth an action plan essentially designed to help colleges circumvent court-imposed restrictions on affirmative action. The CEOs' motive: As minorities' share of the population grows, many corporations want a workforce that reflects their customers. "Our audience is growing more diverse, so the communities we serve benefit if our employees are racially and ethnically diverse" as well, says forum member W. Don Cornwell, CEO of Granite Broadcasting Corp., which owns nine television stations.

Among the steps the forum is pushing: finding creative yet legal ways to boost minority enrollment through new admissions policies; promoting admissions decisions that look at more than test scores; and encouraging universities to step up their minority outreach and financial aid. And to counter avowals by critics to challenge these tactics in court, the group says it will give legal assistance to colleges sued for trying them. "Diversity diminished by the courts must be made up for in other legitimate, legal ways," says David Ward, a forum member and head of the American Council on Education.

One of the more controversial methods advocated is the so-called 10% rule. The idea is for public universities--which educate three-quarters of all U.S. undergraduates--to admit students who are in the top 10% of their high school graduating class. Doing so allows colleges to take minorities who excel in marginal urban schools, even if they wouldn't have made the cut under the current statewide ranking many universities use.

California came up with the idea in 2000, after voters approved a 1996 proposition outlawing racial preferences at the state's colleges and universities, where nearly 2 million students are enrolled. (The state uses a 4% rule to avoid doubling enrollment.) Texas adopted the concept last year after losing a major affirmative-action case known as Hopwood, also in 1996. Undergraduate minority enrollments, which plunged in both states after the rulings, have recovered almost completely under the new approach. "We had to do something to compensate" after the court ruling cut minority admissions, says Robert G. May, dean of the business school at the University of Texas at Austin.

Such statements are what draw the ire of affirmative-action foes. "Even if a policy is facially neutral, if the intent was racial, it is just as unconstitutional," argues Curt Levey, a lawyer at the Center for Individual Rights, a conservative group in Washington that has underwritten anti-affirmative-action suits in Texas and Michigan. He says he has reviewed planning-meeting notes from some schools indicating that universities use the 10% rules deliberately to get around court decisions, and the Center is looking for a plaintiff it can help to mount a challenge. Defenders insist the rule is legal and follows court requirements that admissions be based on clear educational criteria. The 10% rule "is an academic standard," says Ohio State University President William E. Kirwan II, the forum's lead university official.

Equally controversial is the forum's efforts to help universities ditch their reliance on grade-point averages and test scores, which are as much as one-fifth lower for minorities. Instead, they foster what's called a whole person approach to admissions. That means considering, say, the socioeconomic status of an applicant, such as his or her parents' educational level. Texas is the first to implement such a policy, which it's already using for the graduate student class entering next fall, and a plan for undergrads is being studied. Forum officials argue that students who succeed in spite of adversity perform well in college--and at work. "You have to look at the financial and personal challenges a person has overcome, and their special talents and demonstration of leadership," says Stephen G. Butler, a forum member and CEO of KPMG LLP, the 100,000-employee accounting firm.

Forum members also plan to step in more directly by sponsoring financial aid and other assistance programs for minorities. Last year, the forum helped create a nonprofit called the Diversity Pipeline Alliance, headed by Bernard J. Milano, president of KPMG's charitable foundation. The Pipeline aims to bring under one umbrella many nonprofits that serve minority students. So far, 11 have signed on. The idea is to pool the programs' resources to beef up marketing, financial aid, and fund-raising.

The coordination would also make it possible to keep track of minority students over the years. For example, a student in Leadership Education & Development (LEAD), a program that gives hands-on business experience to high-potential minorities in high school, could be steered to INROADS, which places minority college students in corporate internships. INROADS, in turn, could direct participants to the Consortium for Graduate Study in Management, which has provided more than 4,000 MBA fellowships to minorities since 1996. All three of these groups are part of the Pipeline.

Ultimately, corporations will have a big vote in this national debate. State Farm Insurance Co. CEO Edward B. Rust Jr. says he's urging fellow CEOs to "vote with their feet" and refuse to recruit at or make big donations to colleges that don't produce racially diverse graduates. If corporate leaders start following his and the forum's lead, the debate over racial preferences could heat up again in a hurry.

By Jennifer Merritt in New York

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