Weekly Update - December 10
From: President <President@manchester.edu>
Sent: Thursday, December 10, 2020 11:24 AM
To: All Colleagues <AllColleagues@manchester.edu>
Subject: Weekly update - Dec. 10
Dear Colleagues,
Last week I indicated that I would send an update this week about our financial situation. I hope this addresses many of your questions about our short- and long-term financial health and stability. I welcome further questions and will respond to them next week.
The bottom line
Let me reassure you that we are not at risk of closing our doors nor do we need to take draconian measures to stay open.
I understand that worry from those who follow news about higher education. For example, Guilford College, a Quaker institution in North Carolina with undergraduate enrollments and an endowment like ours, announced last month that they were cutting 19 of 42 academic majors and 36 positions, including 16 tenured faculty. They made some disastrous financial decisions in the past five years, including adding $50 million in new debt on top of $35 million in existing debt.
We do not have anywhere the debt level that Guilford has, and our financial situation is much stronger.
The near future
When the pandemic hit, we quickly identified resources we could draw on to weather the storm. We could tighten our belts (which we did), use our rainy day fund (which we haven’t) and even draw down unrestricted endowments (a last resort, but possible). In addition, we received federal assistance through the CARES Act and Payroll Protection Program.
Our fall enrollments were good and we made it to Thanksgiving before moving fully to remote learning. Both were amazing accomplishments! The sobering news is that we remain extremely vulnerable to students choosing not to return or not being able to return, or stay, this spring. In addition, our admissions numbers for next year are very soft across the board right now. The next 18 months hold almost as much uncertainty as the past 10 months.
The immediate question is when we will know about money for raises, travel for professional development, deferred maintenance and other things we’ve given up as part of our belt-tightening. First and foremost, we need to wait at least until mid-February to see what our spring enrollment revenue looks like. Next, we will look internally at where things stand with admissions and externally at where things stand with the pandemic and economy. Continued uncertainties with admissions or the economic recovery may shape the decisions we are able to make.
As much as we look forward to the vaccine, it is not a silver bullet for the nation or us. There will be long-lasting consequences from the pandemic and economic downturn. We need to remain vigilant.
The long term
I can tell you from conversations with dozens of colleagues across the country that all but the Ivies are facing the same stressors and realities. Institutions with much larger endowments and national reputations are cutting programs, offering high discounts and struggling to find their footing in a changing marketplace. Underlying stressors were already there, and the pandemic tipped some, like Guilford, into an institution-threatening crisis.
We made some very difficult and consequential decisions over the past two years, and that hard work put us in a much better place when the pandemic hit. The pandemic has accelerated the pace of change in our markets and the economy. Students and families are even more cost-conscious, choosing majors that promise good jobs when they graduate and putting pressure on our financial aid budgets.
All of this change presents opportunities for us to work creatively and adaptively together. Throughout the pandemic, we have demonstrated enormous capacity for both, and we will benefit from those strengths in the months ahead.
Please don’t hesitate to send questions, broad or specific, and I will address them in next week’s update.
Be well.
Dave
Dave McFadden
President
Manchester University
260-982-5050