Flattening the Financial Curve of COVID-19

Updated: 5/27/2020

By mid-April 2020, William & Mary was beginning to quantify the considerable effects the coronavirus pandemic would have on the university’s financial positioning. Right now, W&M Finance staff projects losses to W&M due to COVID-19 ranging from $13 million to $32 million through August 2020, and the community has been advised to plan for a 5% to 20% decline in revenue longer term. These losses include revenue from study-abroad and summer programs, athletics and student housing, dining and parking plans. It also includes new technology costs William & Mary incurred when it moved to remote instruction in March.

As a public institution, William & Mary is also profoundly affected by the Commonwealth’s fiscal landscape. In response to the pandemic, state legislators have frozen discretionary spending for the rest of the fiscal year and have advised state agencies such as William & Mary to prepare for reductions in support with the new fiscal year, beginning July 1.

Against this backdrop, it is critical that the university community – faculty, staff, students, families, alumni and friends – understand how William & Mary’s finances work, that they are provided with clear information about the steps William & Mary is taking to preserve the university’s people and programs, and that they are aware of the priorities guiding decisions.

W&M Financial Literacy

Understanding how William & Mary functions as a nonprofit, public research university goes a long way toward answering common questions arising from the coronavirus pandemic. William & Mary’s Finance Office has developed W&M Finance Basics as well as a video that offers information about the university’s major funding sources and expenditures.

{{youtube:medium|jUF1Hdt0zzA, Understanding W&M's Finances}}

Budgeting for W&M’s Mission

Faced with the unknown, financial prudence is one of the most effective and immediate ways we can protect the university's core. The entire William & Mary community is bearing in mind the central mission as a preeminent public research university, using it as a benchmark by which to evaluate expenditures. Recognizing that the ability to limit spending now will give W&M flexibility to address potential economic downturns in the future, it is important to evaluate whether spending money now is essential. Procurement Services has issued guidelines that offer specific details.

Some have found it useful to ask the following question as a "gut check" before requesting or authorizing expenditures: "Is this current expenditure so essential to the university's operations that it would be worth having to reduce the size of our workforce or salaries of employees in the future if we face significant revenue shortfalls?"

People are at the core of William & Mary, both on the expense as well as the funding sides. Our largest source of revenue is student tuition and fees. And our largest expense is people – the faculty and staff supporting instruction, scholarship, research, discovery and community. The university is working hard to preserve our workforce while meeting the present and forecasted demands. 

Specifically, the university has embarked upon a mission-critical budget review that evaluates our spending, university-wide, in light of whether or not it is critical to the university. The hiring freeze enacted in March will continue through the summer, as will travel restrictions that benefit both public health and W&M’s financial position. Limiting and deferring spending is one of the most effective and immediate ways we can help William & Mary survive and thrive.

At the same time, it is William & Mary’s grand challenge to faculty and staff to identify creative ideas on cost reductions and potential new sources of revenue. President Rowe has also established specific working groups to plan ahead through the next 18 months.

Supporting Students

During these difficult days, we recognize that students have unique and unforeseen needs. So far, the university has aided more than 200 students – many of them international – with emergency housing, food, lodging and transportation through the Dean of Students office.

In early April, all William & Mary students with a university housing contract, meal plan and/or parking pass received rebates, regardless of their use of institutional aid. When announcing the rebates, William & Mary also offered information about emergency funds available through the Dean of Students office to help students struggling with the financial impacts of the coronavirus pandemic.

In April, members of the Board of Visitors and the administration concurred that, due to the impact of the pandemic on admitted students and their families, the Board would roll back a previously adopted 3% tuition increase for incoming in-state undergraduates in fall 2020. This achieves a zero increase for tuition and mandatory fees for all students -- in-state and out-of-state, undergraduate and graduate/professional.

William & Mary was informed in early April that it was allocated roughly $3.95 million in federal stimulus funding authorized by the federal Coronavirus Aid, Relief & Economic Security Act. Half of that — $1.97 million — is awarded as direct emergency aid for students. Prioritizing students with the greatest financial need, William & Mary began outreach to affected students regarding CARES Act funding distribution on May 7. The other half of the federal allocation is to be used by the institution to cover costs associated with significant changes to the delivery of instruction.

Private support has expanded resources for students and faculty both. The newly established Health, Emergencies, And Resources for the Tribe (HEART) Fund, the Edith Rohlfs Marsh Endowment, the Student Affairs Emergency Fund (non-loan) and the Janet, John and Elizabeth Osborn Emergency Fund Endowment have all been used to support students during the COVID-19 crisis.

In early April, an anonymous alumna donated $250,000, split between the HEART Fund and the Studio for Teaching & Learning Innovation (STLI) Fund. In March, more than 100 individual donors gave a combined $18,000 to the HEART and STLI funds, as well as the International Student Scholarship Fund.

Students have also contributed financial support for one another. More than 50 students donated their housing, dining and parking rebates and refunds back to the university to support those in need. W&M Student Assembly also allocated up to $20,000 for Student Affairs emergency support funds, with an additional $15,000 promised if needed.