William & Mary must build a new financial foundation for its future.
To pursue the three ideas just sketched, along with many others, our strategic thinking has to be deadly serious about resources. The financial model that served the College reasonably well since 1906, when William & Mary became a public school, no longer works except in the area of capital projects. Nor is there any realistic prospect that it will work again in the future. A generation ago, the state provided over 43 percent of our operating budget. This year it will provide less than 14 percent. Since 2008, the state has cut its funds for the College's operating budget five times for a total of $16.6 million, or 32 percent. Given the state's other commitments (K-12 education, health care, prisons and public safety, infrastructure, and environmental protection, to name some of the leading demands on tax dollars), higher education has little chance of recovering the dollars lost over the last generation, much less receiving increased support. Only when it comes to facilities, where the state can fund construction with debt, does the Commonwealth continue to provide primary support.
There are several aspects to building a new financial foundation for the university. We must try very hard to persuade the state to let William & Mary have the freedom to support itself. If allowed, we can increasingly fend for ourselves. We need also to find new ways to earn revenue unrelated to tuition. Crucially important, we must enhance our fund-raising capacity. This will be a multi-faceted challenge, but one resting on lifelong ties to alumni. And the university must operate more efficiently, use technology to become more productive, and stop doing things that, even though worthy in themselves, do not contribute significantly to our main mission.
Our endowment has been challenged by the Great Recession. It declined 14.7 percent in 2009, finishing the fiscal year at $494.8 million. This decline, though painful, compares well to the fates of many other college and university endowments.
Last fiscal year, the one that ended June 30, 2009, William & Mary raised more money, cash in the exchequer, than ever before in the College's history. This happened, amazingly enough, despite the Great Recession and without an ongoing fund-raising campaign. Almost $51 million in cash gifts came our way. These dollars were crucial to financial aid for students, support for academic programs and maintenance of our facilities.
William & Mary repeatedly ranks among the nation's best universities despite consistently poor rankings financially. The latest rankings released by U.S. News & World Report crystallized once again that William & Mary is an over-achiever. We rank 33rd in quality among national universities and sixth for commitment to teaching, but just 88th in financial resources. That is the lowest financial ranking by far among the magazine's top 50 universities, public or private. For generations, we have done more with less. To realize our potential in this century, we need to build a financial model that lets us do more with more.
