This “Household Words” column appeared in the Winter 2009 issue of Macalester Today.
By Brian Rosenberg
Surely it is a sign of the bewildering state in which we find ourselves that as I write this column, two months before its publication, I can only guess at the extent to which it appropriately addresses its subject. That subject is the impact of a recessionary economy and the turbulent credit and equities markets on the work of Macalester. The rapidity with which events are transpiring has made Monday’s prognostications outdated by Wednesday, let alone sufficient for the following weeks and months. We seem to have entered a different world, one in which my chief financial officer has taken to quoting Lewis Carroll more often than the Wall Street Journal.
That said, it seems important to provide you with some sense of how we expect Macalester to respond to the financial challenges by which all of us are confronted. Put simply, we will respond with calmness, prudence, caution, and ingenuity: with a commitment to our core mission and purpose but a willingness to think creatively about how best to carry out that mission in the midst of changing circumstances over which we have little control.
Though colleges have typically fared better than many other enterprises during economic downturns, we are not immune to their effects. All our revenue sources—tuition and fees, endowment income, and fund-raising income—are highly sensitive to external economic forces. John Nelson, managing director of Moody’s Investors Service, has said that while “the vast majority of colleges are going to be fine,” it is “kind of news…for any of them to be in financial stress.” Indeed.
We are and should be planning for smaller tuition increases, more pressure on the financial aid budget, a protracted period of weak or even negative returns on our investments, diminished access to credit, and a difficult fund-raising environment. We are and should be looking for opportunities to cut costs by being more efficient, by distinguishing the essential from the desirable, and by at times acknowledging that we cannot do everything and therefore making difficult choices.
It is essential as we work through these decisions that we have a clear sense of the institution’s highest priorities. At the top of the list is preserving and indeed continuing to enhance the strength of our core academic work: we exist to educate; students attend Macalester first and foremost because of the quality of that education; and we must ensure that we are delivering on our promise to provide those students with the knowledge, skills, and motivation to succeed and make a positive difference in the world.
Other high priorities include retaining and adequately compensating our faculty and staff, without whom that educational work would be impossible, and continuing to make Macalester affordable to an economically diverse group of students. Losing our best people or weakening our commitment to access might save us money in the short term, but would in the long term harm both the fiscal health and the national reputation of the college. With those priorities in mind, we will build budgets that are lean and efficient (we are pretty good at this, having had some practice). Where cuts are necessary, they will come first in areas that have the least impact on our core commitments. The Step Forward campaign will proceed as planned, though of course we will be respectful of the personal situations of our supporters. It will proceed not only because the campaign has met with remarkable success but because the priorities for which we are seeking philanthropic support are still important and the need for help is greater than ever.
The anxieties of the moment have a way of turning us into bad historians.
Now more than ever, we must remember that Macalester has survived the Great Depression, many recessions, and two world wars, not to mention a series of internal financial challenges that would have crushed many institutions whose leaders and communities had less fortitude.
Let me assure you that the college’s goal during this financial crisis is not simply to muddle through. It is to ensure through careful planning and fidelity to our invaluable mission that we continue to strengthen both our financial health and our distinctive programs and emerge a stronger and better place. This is what Macalester has always done, and those of us charged with stewardship of the college today should expect of ourselves no less.