April 2, 2020 — Message from President Wippman, Financial Update
April 2, 2020
In her message to the faculty on Monday, Suzanne Keen noted that we are all in the same boat, or in any event, the same flotilla, rowing for shore together. Seldom have we rowed harder — or better. In just a few weeks, we have helped students return home, sometimes under the most challenging of circumstances; adapted courses designed for small, face-to-face classes to the unfamiliar world of remote instruction; ramped up technology support; cared for the students who remain on campus; reinvented how we recruit new students; found new ways to stay engaged with our alumni; and sorted out how to maintain our facilities and grounds with just a handful of staff working on campus. We have done all that, and more, and we have done it with the dedication, creativity, and single-minded focus on the welfare of our students that make Hamilton such a special place. For that, all of you have my deepest appreciation.
While we can look with pride on all that has already been accomplished, we must also look unflinchingly at what lies ahead.
As you know, we have three major sources of revenue: tuition, income earned from the endowment, and fundraising. All of them are under strain. Given the uncertainties around the course of the COVID-19 pandemic, almost all colleges and universities are worried about fall enrollments. Even if those concerns prove unfounded, we expect financial aid expenditures to rise sharply. We are already hearing from anxious families facing job losses and dwindling assets. At the same time, plunging markets have driven down the value of our endowment, and prospective donors are experiencing their own financial challenges.
Whether these factors coalesce into a perfect storm or something far more modest depends on the course of the pandemic — how bad it gets and how long it lasts. We are modeling a range of scenarios and developing the appropriate contingency plans. Fortunately, Hamilton is better positioned than most to face whatever comes, as a result of careful budgeting, skilled investment management, and generous support from alumni and other donors.
Even in the best-case scenario, however, we know we must reduce spending on anything that is not essential to the support of our students and the fulfillment of our academic mission. That effort is already under way. As Karen Leach noted in an earlier message to our community, we are, with very limited exceptions, not filling open positions, pausing non-critical capital projects, and directing each division to identify other ways to save money. For the most part, our peers are doing the same, and some have announced salary freezes and other austerity measures.
When we moved to Reduced Operating Status on March 16, we announced a set of Interim Human Resource Policies to apply through April 12. We will continue those policies at least through the end of May.
Eventually, we will reach port. When we do, I hope, to paraphrase one of our trustees, that we can look back and say that we traveled a path of hardship and uncertainty together and came out the other side bonded by the journey and stronger than ever.
I know this will leave you with many questions. I will do my best to answer them at the faculty and staff assembly meetings next week and in regular communications as things evolve.
For now, thank you for all the extraordinary work you are doing in this extraordinary moment.