Now over halfway through the fiscal year, I can report that the College has fared well during the calamitous economic conditions in the nation. Here I’ll write briefly about our financial state and the general strategies to be taken in the months ahead.
If you’ve been following stories about how the recession has affected other colleges and universities, then you know many institutions have taken severe measures in response to the crisis or in anticipation of worsening conditions. For example, there have been pay freezes, temporary furloughs, operating budgets cuts, canceled searches, reductions in retirement contributions, increased class sizes, and lay-offs. Every day we learn of more colleges struggling to respond to shrinking endowments and other budget pressures.
Fortunately, Warren Wilson has so far avoided serious fiscal problems, for several reasons. First, our modest endowment has stayed essentially stable for the last year, while most college endowments have taken steep cuts. We can credit this good news to the wise and conservative investment strategy of our Board of Trustees. Second, our enrollment, financial aid budget, and retention for this semester were on target, and our applications for next fall are strong. It appears our mission remains attractive to students across the country, despite the economy. And third, we’ve remained steadfast in maintaining a conservative approach to budgeting—an inheritance from our Presbyterian roots during years when the college endured much more difficult times that those we now face.
I hope we’ll continue to avoid tough times ahead, but we can’t be assured of that fact. Any one of several problems could strike—such as reduced enrollment (a serious problem for a tuition-driven college such as ours) and increased need for financial aid to maintain full enrollment (a result of the economic stress that students and their families now face). Thus I’ll be working with the President’s Advisory Council to develop a series of modest cost-cutting measures. Our main objectives are threefold:
1. Increase the “contingency” portion of our operating budget so that we have a larger buffer to insulate us from potential crises down the road.
2. Keep tuition increases as low as possible.
3. Maintain and, if possible, increase financial aid so that we continue to bring students from all economic backgrounds.
Every savings makes a difference, and I know I can count on all of you to support our effort to stay focused on the economic sustainability of the College. I’ll report back to you periodically on our progress.