SUMMER 2003 •
VOLUME 8, NUMBER 1
SPECIAL ISSUE: REAPING THE REWARDS OF
THE PLAN FOR MOUNT HOLYOKE 2003
Plan
goal: Achieve financial equilibrium by 2003
through a variety of specific steps
Although the United
States is facing difficult economic times at present, the great
success of The Plan for Mount Holyoke 2003 in the arena of financial
health has resulted in confidence that the College is on firm
financial footing and can weather this cyclical downturn in the
country's economy. Mount Holyoke's 2002-2003 budget met the financial
goals of the Plan and reached financial equilibrium, which was
defined in the Plan as a balanced budget; increases in reserves
for facilities and equipment of $1.5 million a year; no use of
unrestricted bequests for operations; and endowment spending of
5 percent of the average market value, an appropriate level for
the College's long-term financial health. "This was indeed cause
for celebration," notes Mary Jo Maydew, vice president for finance
and administration.
When the Plan was
implemented in 1997, the College faced ongoing financial challenges
that threatened its well-being. Skyrocketing financial aid was
cutting deep into Mount Holyoke's coffers. The resultant rates
of annual expenditures from the endowment were above prudent levels
and threatened the College's long-term viability. Early belt-tightening
measures, the gradual reduction in the average percentage of financial
aid awarded, and adoption of need-sensitive admission for a small
percentage of applicants helped to stabilize the College's financial
condition.
By the midpoint of
the Plan, the College was moving toward financial equilibrium
at rates faster than projected. "Meeting the goal of financial
equilibrium just six years after the Plan was adopted was a major
achievement," says Maydew. "Although there are certainly financial
challenges ahead, the College is in a much stronger position to
weather these challenges. The directions set by the Plan and the
institutional focus it accomplished have been critical to our
ability to improve Mount Holyoke's financial situation so significantly."
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