Welcome, everyone, to the 2013–2014 academic year. In these remarks I will offer my view of the state of the College, focusing primarily on our operating environment, our accomplishments and financial challenges and what I see as our way forward.
This is the 142nd year that Elmhurst College has, in the words of our 2009 Strategic Plan, pursued its mission to inspire our students “to form themselves intellectually and personally and to prepare for meaningful and ethical work.” Since 1871, we have become increasingly conscious that our students’ work cannot occur in isolation from a larger, more complex world, and thus in 2009 we tasked ourselves with preparing them to flourish “in a multicultural, global society.”
Especially since the recession that began in 2008, we have become much more conscious that our work inevitably takes place in a more complex social and economic environment, that our “ever-widening circle,” in H. Richard Niebuhr’s famous phrase, is in fact constantly experiencing the force of other circles of influence, like converging ripples on a pond, resulting in perpetual wave interference patterns, where our circle affects and is affected by a multitude of distinguishable but interrelated circles, whose dynamic interaction at any moment sets the limits of possibility for our own institutional coherence and development.
It is important to observe that this decades-long transition is a change in awareness, not a change of state. We have always been part of this cultural dynamism, but for many years in our early history, our social and economic circumstances and those of the country as a whole provided us the luxury of believing we were operating largely in a free-space of opportunity. At times of severe economic challenge, such as the period under Presidents Niebuhr and Lehmann in the late 1920s and 1930s, and Frick in the 1980s, we reawakened to the fact that we operate in a complex world of other circles emanating from other sources. During those times we had to respond accordingly, with open eyes, to strengthen our position, or risk our mission’s success entirely.
Such a period of challenge is upon us today, and we, too, are responding with short and long-range actions aimed at sustaining and enlarging our sphere of influence, to keep our circle ever-widening and our mission strong. The first step, as in times past, is a change in perception: achieving a sustained attentiveness to the complex environment in which we operate. I believe we are doing that quite well. Our many conversations since 2008 about the challenges we face as a College today suggest that we do in fact understand that we function within a network of dynamic, competing parameters. The second step toward greater collective security is our appropriate response to this environment. Here, too, we are making strides, by intelligently changing our institutional structure and behavior. We are not just thinking differently, we are acting on our observations in ways that I know are not only conducive to the College’s ultimate flourishing, but require courage for many of us as individuals.
In these challenging times, I invite us all to take justifiable pride in our ability to face the present clearly, without denial or resorting to the familiar for its own sake, to take those reasonable risks that we deem necessary for our success. I invite us, too, to take similar pride in what we have already accomplished as a result of those risks, and to celebrate them as a community.
We should pause to consider how, in the words of our Mission Statement, by “working together with passion and commitment,” we have “foster[ed] learning, broaden[ed] knowledge, and enrich[ed] culture through pedagogical innovation, scholarship, and creative expression.”
Specifically, under the guidance of our Strategic Plan, during one of our country’s most devastating recessions, we have built the number of fulltime faculty to record levels; adopted and implemented the Elmhurst College Integrated Curriculum; doubled student diversity to fully a third of each entering class and showed national leadership in supporting LGBT students; revitalized and expanded our programs for nontraditional learners; made meaningful improvements to our facilities and equipment for studying theater, music, and the sciences and health professions; and dramatically raised the College’s public profile as a site for civic engagement and the discussion of public affairs. And we have done all of this while keeping student GPAs and ACT scores high, in fact at record levels for our College.
None of these accomplishments, or the many more that could be added to this list, came easily. Each resulted from our determination as a community to make real a vision and a plan of our own built on a fundamental, shared belief that the world is a better place because Elmhurst College is a part of it, that our circle matters and can and should widen despite the centripetal pull of an economy in ruins and a frightened public increasingly skeptical of, if not hostile to, the whole project of higher education.
So it is against this backdrop of great challenge and remarkable achievement that I offer the following remarks on the recent and current financial status of the College as we enter the new academic year.
Financial Status in FY13
When fiscal year 2013 ended on June 30, the College was stronger financially than we originally anticipated. This was largely attributable to significant savings we achieved throughout each of our departments. I offer my most sincere thanks to all who made this savings possible. Your stewardship of our resources is nothing short of exemplary.
As planned, we also saw substantial increases in our net revenues. We fundraised $1,200,000 over the previous year’s total, and garnered significant revenue increases from the rental of College property to off-site groups and from our popular public lecture series.
I am especially pleased to inform you that in its first year of operations, the School for Professional Studies (SPS) exceeded its own goals for generating net revenues. Budgeted to earn $173,000 in fiscal year 2013, the SPS netted more than $540,000—that’s $367,000 more than we had expected from the School. And, in terms of students, consider that the average number of new enrollees annually in all graduate programs over the preceding five years was 126. When our doors, virtual and physical, open this fall, we anticipate 170 new—not continuing, but new—graduate students to pass through them, and that’s just for the fall semester.
Through the energy and hard work of participating faculty from departments around the College and under the leadership of Dean Ricordati and his staff, the SPS has already established itself as a strong financial contributor to the College’s collective wellbeing.
More important, the SPS is achieving these results because the faculty have developed and begun to implement rigorous and relevant academic programs that are congruent with the College’s stated mission and the SPS Charter, programs that respond both to what students want to take, when and where they want to take them, and to the needs of employers. Just this summer, the faculty’s School Program Committee approved a new graduate certification in data mining and a master’s program in data science; a graduate program in applied geospatial sciences; and a master’s entry into nursing program. I wish to thank especially the faculty members of the inaugural School Program Committee for the vision, enthusiasm and hard work that they have brought to the task of making Elmhurst College a leader once again in the education of nontraditional students in our Chicagoland region.
Their work is truly an example of faculty collaborating with faculty, and faculty and administration working together for the greater good of our College and its future. And just last week, we received the very good news that our new master’s program in speech language pathology has received candidacy status from national accreditors, thus clearing the last hurdle to making our entry into graduate education in this growing professional field a reality starting this fall.
Challenges for FY14
However, not all the news this fall is good. In counterpoint to these achievements and advances, the upcoming fall semester is presenting a significant financial challenge in the size of our entering class of traditional first-year students. Over the past 10 years, the size of the entering class has averaged 540. However, since the recession in 2008, we have seen unprecedented volatility in first-year enrollments, jumping from 584 in fall 2009 down to 538 in 2010, then up to a record 608 in 2011, only to fall to 560 in 2012, and for the current academic year, to drop further to a projected 510 to 520. Such volatility makes budgeting extremely difficult, since even the slightest shift from our projections can make a difference of thousands or even millions of dollars in tuition revenues. Planning is even more difficult because students are taking longer and longer to make their enrollment decisions, often accepting or declining right through the summer, into late August.
The phenomenon of lower than anticipated enrollments is present in tuition-driven schools across the country. Recently, the Wall Street Journal and the New York Times ran almost identical stories on how colleges like ours are facing sharp declines. The pool of traditional-age students nationally continues to shrink. Large state colleges and universities are aggressively recruiting strong high school seniors outside their geographical region. Among private schools, those just below the most elite ranks are dipping down to offer admission to students who for many years in the recent past were our bread and butter. These larger or more prestigious schools often can award financial aid packages that compete with if not exceed those that schools like ours can offer. Moreover, parents remain reluctant to part with life savings for college education, especially for education at liberal arts colleges, which are perceived as places for self-enrichment but not as spring boards for careers. Plus, fear of job loss in this shaky economy continues to constrain parental thinking about college affordability and impacts their decisions to take on financial obligations which, they believe, rightly or wrongly, will reach into the hundreds of thousands of dollars.
There is no reason to think that this shift to lower student numbers around the country is transient, given the ubiquitous high costs of on-ground higher education, the previously mentioned decrease in the numbers of traditional-age students, and the incentives for more famous or wealthier schools to recruit “our” prospects, just to cite three of many factors that account for declining enrollments.
We appear to be entering a new normal, where enrollments are highly contested among schools like ours and financial aid negotiations are fierce—assuming prospective students even want to negotiate rather than accept offers from higher prestige schools, or schools with much deeper pockets. I know that the effects of these phenomena on 2013 enrollments are being felt as we speak in most of our peer institutions throughout the Chicagoland region.
Implications for Elmhurst College
What does all this mean for us? Several things. First, our planning assumption should be that future entering classes will be lower in number. 576, the target number we have used since 2009, is no longer viable for institutional planning. We are in the process of analyzing the data that will allow us, soon, to set a new target number that better reflects the realities I have described.
Second, if we expect to enroll fewer students in the next several years (fewer, that is, than 576), we must be willing to take a hard look at our expenditures and must budget within our means. We should be prepared to review all our existing financial arrangements, to ensure that we are spending our precious resources as wisely as possible. Wisdom here means finding the balance between efficiency of operation, on the one hand, and quality of education, on the other. We owe it to our students and their parents, as well as our donors and alumni, to strike this balance and demonstrate that we are good stewards of the resources they have entrusted to us.
Going forward, then, it is clear to me that our expenses must be in line with our projected revenues or we will surely enter into a long-term, structural deficit. In such an environment, our endowment, which is presently encumbered by significant obligations, could not act as a bank of last resort. To reverse a structural deficit, then, would require measures harsher than either I or the Board has been willing to entertain to date.
Notwithstanding what may lie ahead, however, I will continue to support to the Board of Trustees salary increases for all eligible employees. Because it has been more than one year since raises have been given, I will ask that any such raises be retroactive to July 1 of this year, rather than begin in January 2014. I know that the Board, which has ultimate authority for granting raises, shares my desire that everyone who works for the College receive appropriate financial recognition, if it is possible under the circumstances. I expect to know more after the October Board meeting, when the decision will be made, and of course will share any news with you at that time.
Third, in tandem with cost containment and reduction, we will focus constantly on increasing the number and size of our net revenue streams, removing every administrative obstacle to student retention or admission that is under our control. No one ever cut their way to prosperity, and we are no exception. We have already invested significantly in strengthening our development operations and our student retention strategies, as well as utilizing our physical plant more productively for camps, conferences and public lectures. I have placed correspondingly high expectations for revenue generation on all of these units and am pleased with the results we’ve obtained thus far.
Then there is the School for Professional Studies. If our pool of prospective traditional age students is diminishing, where can we tap into new constituencies to hold our ground and hope to grow? The SPS is our emphatic, if partial answer. Young adults will always go to college and Elmhurst will continue to regard their education and self-formation as residing at the core of our mission, just as the Strategic Plan says. But if the Elmhurst Experience is to endure 20 years from now, we must embrace what I call an ethic of innovation that looks for large opportunities for success, and be ready and willing to adopt appropriate innovations, including especially mutually beneficial partnerships.
Already we have one such large opportunity in a major new partnership we created just this summer with Elmhurst Memorial Hospital (EMH). The College and EMH have entered into an agreement whereby we will construct on 4600 square feet of new space in EMH a simulated hospital environment that will offer state of the art education and training to our health professions students, especially our nursing students. When we are not using the facility, EMH will have the right to utilize it for the professional development of their staff. The new training facility—the name of which is still being determined—will generate revenue by allowing us to expand the number of students in our new masters entry into nursing program, as well as train third parties such as ambulance companies and first responders. This is an extremely exciting initiative which advances our plans to develop new educational space, and it does so without requiring renovations to Memorial Hall or the Schaible Science Center.
It is not too much to say that this partnership is the realization of a dream for a substantial, long-term, mutually beneficial relationship between the College and EMH that we have had for years, if not decades. I wish especially to thank Dr. Julie Hoff and the faculty of the Nursing Department for their formative role in the creation of this initiative. Dean Ricordati and Vice President Jim Cunningham also played pivotal roles in hammering out the final agreement. Work on the project will begin soon and is scheduled to be completed next summer in time to welcome our students in fall 2014. You’ll be hearing a lot more about this endeavor as it takes shape starting this fall. In the future, I believe strongly that partnerships like this one—that exemplify the ethic of innovation—will be critical for our success as a college, and should have a place in our institutional planning.
Fourth, we must plan our future and not operate out of habit or in reaction to outside events. We must not embrace an ethic that perpetuates the past for its own sake. This is especially hard for a college to do. The ethic of fidelity to the past, however, stands in marked opposition to the ethic of innovation. And these are, in fact, ethics. Put simply, the first says we ought to act tomorrow as we acted today, just because today was good enough, or comfortable enough, or the way we’ve always done things. The second, in contrast, says we ought to act in new ways that advance our mission, and we have chosen the second. Always tethered to our stated Core Values, we should pursue institutional reinvention as it serves our strategic needs.
Strategic Planning for 2020
This brings me to my final subject, strategic planning. As you know, this year we are renewing our Strategic Plan for the College. We must build on the fundamental self-definitions and goals we set for ourselves five years ago. In this sense, we are not starting from scratch, but evaluating how times and circumstances may have changed since 2008 and ask ourselves what objectives have we completed, which are we progressing toward and which no longer seem desirable or attainable. What time horizon should we use in this reflection? I urge us to imagine what Elmhurst College should look like 20 years from now, and then ask ourselves, in very specific terms, what steps should we take over the next five or six years to get there? Already, through the Advisory Council for Strategic Planning (ACSP), we have held listening and discussion sessions with the key College constituencies of students, members of the Administrative Council and Trustees. Today the faculty as a whole will discuss the College’s future during their retreat, thus taking a very important step in our planning process.
I am very grateful to you, our faculty, for focusing on the important subject of strategic planning as part of your opening exercises for the year and I look forward to learning your thoughts on our institutional priorities and continuing the dialogue in the months to come.
And make no mistake—strategic planning is the most important work we as a community can do right now. The fact that we have challenges to our operating budget in no way diminishes the need for strategic planning. Quite the contrary. At a time of scarcity of resources and fiscal constraint, it is all the more imperative that we think carefully about our long-term distributional choices and order them as soberly and strategically as possible. Similarly, it is vital for us as a community to imagine new ways of significant, mission-driven revenue growth. In the coming weeks and months, the ACSP will hold discussion sessions with other constituencies including our staff and administrators and our alumni. Our goal is to complete a draft of the revised Plan by the end of the calendar year and have a final version of the Strategic Plan for Elmhurst College 2014–2020 to the Board of Trustees for approval at their March meeting.
In conclusion, to sum up the state of Elmhurst College, it is clear that we are passing through a critical period in our history which will require us to embrace an ethic of innovation, but if we do, we will emerge stronger and more relevant to higher education. The intellectual and personal preparation of young people for lives of meaningful and productive work and service will always remain our centerpiece but we can no longer look to it to serve as the single or even the primary driver of our critically important net revenues.
That’s where innovation comes in and that’s where all of you can make a difference. Please play your role in designing Elmhurst College to be an effective institution 20 years hence. The College needs your ideas and your initiative, your constructive engagement with our challenges and your receptiveness to change and reasonable risk-taking. Above all, keep positive! Be an active part of the strategic planning process this year and help shape the next generation of Elmhurst College. Our students deserve no less. Thank you all for everything you do for the College, and have a great start to the new academic year.