President Reveley's Dec. 5 note to community regarding the economy| December 5, 2008
William & Mary President Taylor Reveley sent out the following note to faculty, staff, students and alumni regarding the current economic situation and steps the College has taken. —Ed.
Dear William & Mary Community,
I write to say how the College is doing as the world moves through chaotic and unpredictable economic times.
Before the financial crisis struck, the Commonwealth of Virginia was providing about 18 percent of William & Mary’s $276 million annual operating budget (not including the Virginia Institute of Marine Science, or VIMS, which has a separate operating budget and is more dependent on state support than the rest of the university).
For the fiscal year ending June 30, 2008, the state cut our funding by $3 million with $2.7 million of that amount carrying forward in fiscal year 2009. Since then, the state has cut another $3.4 million from the College’s operating budget. For the fiscal year ending June 30, 2010, we will hear soon about an even larger cut, reflecting steep declines in state revenues. Thus, for three fiscal years in a row, we must accommodate significant reductions in state support.
Among other steps to meet these cuts, we have deferred a 3 percent salary increase for faculty and staff planned for last month, reduced our maintenance and operation budget by 5 percent across the board, and imposed a hiring freeze. Our academic program has not been affected. There have been no layoffs on the main campus (though two at VIMS), no furloughs of employees, and no salary reductions. Nor will there be reductions in student financial aid or a mid-year tuition increase this academic year.
As is true for other colleges and universities, the performance of our endowment has suffered. Our largest pool of endowed funds has decreased by an estimated 19 percent for fiscal year 2009, through October 31. This compares to a 24 percent decline in the S&P 500 index during the same period. Thus, the endowed funds available to support next year’s operating budget will decline somewhat.
Even amid the economic crisis, new private giving to the College is holding up well. Many of this year’s reunion classes exceeded their fundraising goals. We’ve recently secured multi-million-dollar commitments for Swem Library, Miller Hall (the new home of the Mason School of Business), and a new Career Center. Faculty and alumni alike have answered the Board of Visitors’ challenge to raise funds for need-based financial aid in the Gateway Program.
Especially in times like these, annual giving truly matters to William & Mary’s capacity to sustain its core mission. Every gift to the Annual Fund is a vote of confidence in the country’s second oldest university and a source of energy for its operations.
The College is well along in an intensive strategic planning process that will help us respond effectively to whatever lies ahead. The process is broadly inclusive. It will produce a plan by next April, which will then be reviewed and revised annually, as useful, and which will inform our budgets. William & Mary has long been an overachiever, accomplishing far more than our finances would suggest possible. We will do our best to continue in this tradition until more promising economic times arrive.
No other college or university in America has had to overcome more adversity than William & Mary, including being caught in the paths of two wars. Along the way, the College has developed great staying power. We will be fine.