President, Board Chair Address Economy
Posted: October 30, 2008
In a letter to the extended community, President Creighton and Board Chair Leslie Anne Miller '73 discuss MHC's fiscal health and current economic conditions. The text is below:
Dear Members of the Mount Holyoke Community,
The Board of Trustees met on campus October 23-25, 2008. In addition to its regular fall business, the Board reflected on the College's fiscal health in light of current economic conditions.
The Board noted that while no institution is immune from the recent turmoil in the financial markets, Mount Holyoke has the benefit of coming off a very strong year in fiscal 2008 with excellent financial results in three critical areas:
- Investments: The College's 8.3% endowment return for FY 2008 was among the top 1% of all colleges and universities with significant endowments. The endowment reached an all-time high of over $658 million at the end of the fiscal year. Our spending guidelines allow some flexibility that will cushion the effects of the current markets on our operations.
- Operations: The College's operating budget for FY 2008 continued our long record of balanced budgets, steady institutional improvement, and disciplined cost control across the institution, thanks in large part to the strategic focus provided by the Plan for 2010 and the Plan for 2003 before it. Further, because of careful cash management, Mount Holyoke does not face liquidity problems.
- Giving: Last year, Mount Holyoke alumnae and friends set all-time records for giving, both to the Annual Fund ($8.6 million) and overall ($42 million). These gifts have contributed significantly to the current financial strength of the institution. We are blessed with an extended community of supporters who put Mount Holyoke high among their philanthropic priorities.
Clearly, Mount Holyoke is advantaged by having the Campaign well underway with an impressive total of $165 million to date. This weekend we were joined by faculty, staff, and grateful students and their families to celebrate two lovely additions to our campus: our beautiful new residence hall, and our state-of-the-art track and turf field. We cannot thank donors enough for these wonderful facilities that will have such positive impacts on students' lives for years to come. At its meeting, the Board reiterated its strong support for maintaining the spirited momentum of the Campaign, and it has singled out the Annual Fund for particular emphasis. Because the Annual Fund goes right to the bottom line of the current operating budget, that funding is particularly critical to the College. Now more than ever, alumnae and friends can make a real difference to our students. We will also continue to rely on charitable giving to maintain the steady endowment growth that guarantees the College's strength into the future.
Despite the good news of last year, the deteriorating economy will adversely affect the College. Like others, Mount Holyoke's endowment is sharply down from its highs, although we have confidence that over the long run the institution will be well served by the Investment Committee's strategic diversification and management of our assets. First quarter operating budget results suggest that other revenue streams are under pressure as well. It will be challenging to balance this year's budget.
We would like to assure families that the College will, as its highest priority, sustain its commitments to current students and its considerable institutional investment in financial aid. In other areas of our budget, we will tighten cost controls and carefully steward institutional resources while maintaining a steady course of realizing the year's priorities. We will continue capital projects already underway, but will review future capital spending with an eye to curtailing all but the most essential projects. We will closely review all open faculty and staff positions and will redouble emphasis on energy conservation. As the year unfolds and as we develop next year's budget, we have faith that the on-campus community will work together cooperatively, as it always has, to recognize the constrained circumstances we share and to help identify economies that protect institutional effectiveness and excellence. The Board's Finance Committee will work closely with the College's administration in this endeavor.
We would like to thank all members of the extended Mount Holyoke community--trustees, faculty, staff, students, alumnae, parents, and friends--for their abiding support of the College. Mount Holyoke has weathered many challenging periods over its 171-year history, and we are confident that, together, we will do the same now.
Leslie Anne Miller '73, Chair
Joanne V. Creighton, President