College to protect core while navigating weak economy with strength
November 10, 2009
Key capital improvement projects, including the renovation of Althouse Hall, will continue as Dickinson seeks ways to cut expenses and meet the increased need for financial aid in a weakened economy.
The still-weak economy appears to have returned from the abyss, but the fallout from the decline in stock market and housing values, coupled with tighter credit and rising unemployment and bankruptcies, will affect colleges and universities for years. Dickinson, though positioned better than many colleges and universities to weather the crisis, is not immune.
Dickinson’s endowment, which provides 9 percent of the operating budget, is rebounding along with the rest of the stock market. Other schools, which rely on their endowments for a greater percent of their operating revenue, have had to deal with larger gaps in funding. Many have resorted to layoffs and unpaid furloughs.
Endowment performance, however, is last year’s news. This year, and in coming years, the need for financial aid has moved to the center of the financial spotlight.
“The big picture right now is what has happened to families,” said Annette Smith Parker ’73, Dickinson’s vice president and treasurer. “With job losses and family portfolios getting hit, the story is the need for financial aid.”
Dickinson is in the second year of a four-year plan to deal with the economic crisis and changing higher education landscape. As cuts occur to bring the budget back into balance—a requirement for preserving the strong credit rating needed to borrow for critical projects—the college intends to protect its core principles: a low student-faculty ratio; a highly talented student body; and a commitment to access and diversity among students. Dickinson also will continue to focus on areas of excellence that distinguish it from its peers: global education, environmental sustainability and a useful liberal-arts education for engaged citizenship.
The college has cut costs over the past year in a variety of ways, from freezing salaries and implementing department-wide budget reductions to ending unlimited washer and dryer use by students and replacing college vehicles and computers less frequently.
When employees other than faculty leave the college, an administrative team will determine whether a replacement will be hired or the work will be done by others. (Faculty positions are filled when vacancies arise). That practice will likely intensify if Dickinson offers early retirement, phased retirement and early buyout options to employees—cost-savings measures currently under consideration.
Dickinson also is working with a consultant to study ways for the college and employees to benefit from containing health care costs while maintaining the quality of existing medical coverage. A health care review is scheduled to begin this month.
The college also is working with other Shared Services Consortium schools—Bryn Mawr, Bucknell, Franklin & Marshall, Gettysburg and Haverford—to investigate possible collaboration with the University of Pennsylvania procurement initiative. The goal is to identify $500,000 in operating budget expense savings during the next fiscal year and beyond.