Elmhurst College: The College and the Economy

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The College and the Economy

Dear Members of the Elmhurst College Community:

I write to address how the international economic situation has affected the College, and to tell you some of the ways we are safeguarding our financial security and ensuring the integrity of our educational mission in the months ahead.

Since the summer of 2008 we as a nation have witnessed negative changes in the financial world that few anticipated. The downturn in the economy has been pervasive and severe. Among many other things, it has impacted the financial bottom line of virtually every college and university in the country.

During the 138-year history of Elmhurst College, we have weathered our share of financial turmoil. Over the years we have endured and thrived by adhering to our core values of academic excellence, strong bonds of community, and careful stewardship of financial resources. This time will be no different.

Elmhurst College remains a strong and vibrant institution. At the same time, the College does face significant challenges. We will respond by making plans appropriate to the specific financial difficulties around us, even as we build the College toward our desired future.

Our revenue streams are experiencing stresses. Here are some of the specific challenges we face: 

  • We are an institution that relies on tuition dollars as our primary source of revenue. Next year we must continue to maintain and improve our services to students with a tuition increase. In these difficult times, however, we feel compelled to keep such increases to a minimum, knowing that our students and their families are facing severe financial pressures of their own. For the 2009-2010 academic year, our anticipated tuition increase of 4.9% will be the lowest in 36 years.
  • As a not-for-profit organization, we rely on the philanthropic community for support. We anticipate that donors—individual, corporate, and foundation—will be making difficult decisions about their giving capacity. We will work hard to encourage them to continue to make Elmhurst College a philanthropic priority, especially in the key area of student scholarships.
  • Our endowment, which generates revenue to help pay for student scholarships, travel scholarships, faculty positions, book funds for the Library, and other mission-driven activities, is eroding in value. Moody’s Investor Service, a well-respected analyst, projects that college and university endowments nationwide will drop by between 20 and 30 percent in the current fiscal year. Between July 1 and December 31, 2008, Elmhurst’s endowment declined by about 23 percent (from $97.9 million to about $75.2 million).

Since the onset of our economic challenges, I have been in constant contact with our trustees, senior administrators, and outside financial advisers, as well as many of my fellow presidents around the country. We have sought to assess the developing situation, respond to our challenges effectively, and plan responsibly for our future.

To that end, it is clear to me that we must not sacrifice the ambitions expressed by the College community through the strategic planning process that we began last July. Rather we must integrate our planning into our current and foreseeable financial realities. We must prioritize and implement our initiatives carefully, and move forward with the most pressing initiatives in a financially prudent manner.

In the coming months, we all will face difficult choices. What can we do without? What expenses can we reduce? What projects can we defer? 

To begin, members of the Board of Trustees and I have decided to defer the renovation of the College’s future function house and presidential residence at 260 Cottage Hill Avenue in Elmhurst. We will await better financial times before taking action on this property. Large institutional functions will continue to occur on and around the campus, and my family and I will remain in our current housing.

We also must ask: How can we increase revenues? How can we make existing revenues go farther? All options are on the table. But we are guided by certain commitments.

We affirm our pledge to provide the greatest possible financial aid to our students. This means taking careful account of the unique and uncertain circumstances of every applicant and matriculant and his or her family. We encourage any student who is considering withdrawing from the College due to financial hardship to first contact the Office of Financial Aid. We will help each student to the maximum extent possible.

To meet the anticipated needs of our students, we must grow the pool of financial resources available to them. We will seek new revenues for gifts of scholarships from our alumni, friends, and corporations to ensure that we continue to attract, retain, and graduate an academically strong, diverse, and engaged student community.

We also affirm our dedication to our faculty and staff, whose hard work each day turns our collective dreams into reality. While we do not presently contemplate eliminating any positions, the short-term uncertainty of our financial circumstances requires us to look carefully at compensation options for the next fiscal year. Therefore, we will not announce salary increases, if any, until we have a reliable picture of our expected revenues for the 2009-10 academic year. That may not be until the summer or even the fall. In addition, we will scrutinize very closely proposed new hires or increases in hours, and support only those that are essential to the life of the College. In all this, we will be guided by the goals expressed in our emerging strategic plan.

Our strategic planning process is a great work in progress which has animated our community since July 1, 2008. This work deserves our increasing dedication as we move toward its completion in this uncertain spring. When we embrace a clear and compelling vision of our future, we take charge of our present. We expand our universe of options and empower ourselves to make better choices in a difficult economic environment. 

Let us confront our financial challenges with confidence.  If we employ creativity and conviction to merge our aspirations and reality, we can be sure that our best years as a College lie before us.

Sincerely,

Dr. S. Alan Ray
President of Elmhurst College

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