December 2, 2008
by Dr. John Roush, President, Centre College
Dear Friends—and Prospective Friends—of Centre, The holiday season is upon us – a most special time for members of the Centre family. I write to share with you the substance of a report I delivered in mid-October to Centre’s board of trustees and, a week later, the college’s faculty and staff. I share it with you as an update on Centre in these challenging times. I believe you will find it to be a good read; a report that outlines many of the good things that are happening at the College; another signal that there is much for which we should be thankful.
We’re all familiar, I’m sure, with the ancient Chinese curse, “May you live in interesting times.” Whether or not they are a curse, these are certainly interesting times. That said, I judged it wise to offer you a report on how Centre is doing during this unsettling period. What I offer will be informative—some may seem hard-hitting—and, I believe much of what I share will be reassuring.
I would begin by reminding you that Centre is preparing to celebrate its 190th year. And, while a 190th anniversary doesn’t have a lot of cachet, it does provide us with a reminder that we are part of an organization that has a long, illustrious history. This College has survived the bad times – the Civil War, two world wars, financial panics in the 19th century, and the great depression in the 20th century. And almost all of us experienced together the terror and trauma of 9/11. This College has prospered during the good times, especially over the past quarter century. Centre has for almost 200 years been able to find its way, draw on its strength during all those periods filled with challenge. And, so it will this time.
A Position of Strength. We approach this interesting time with many arrows in our quiver, so to speak. Our Board has never been stronger, with a combination of senior trustees and newer trustees who have offered their support of and counsel to Centre in unprecedented ways. The senior administration is seasoned, understands what we need to do in such circumstances. Our faculty and staff continue to work hard, achieving at a high level and doing so with a sense of optimism and possibility. We’ve enjoyed five straight years of record-breaking admission results, with our experience this fall setting a new standard. And, our number of campus visits this fall puts us a full month ahead of where we were last year.
Thank goodness we successfully concluded our $170 million campaign last December. And, while we’ve experienced a 20 percent reduction in the value of our endowment, a gift of $16 million from Al and Mary Wood’s estate will arrive in a few days and take our total back in the direction of where it was.
The rankings—like Consumers Digest #1 value among all colleges and Forbes #13 overall ranking among all colleges and universities—and the college guides continue to be “kind” and generous with Centre. And while it’s hard to measure how much these sources of information matter, let’s agree that they matter.
I call attention to these factors, and might mention others, not to impress or “relieve” anyone’s anxieties or suggest that Centre can altogether avoid this situation—I don’t have that kind of magic—but, rather, to make clear that Centre College is well-positioned to navigate this interesting time.
Financial Aid: An Unwavering Commitment. First let me say that our provision of student aid is dramatic and will remain so. A commitment to both high quality and access is a defining trait of Centre and this will not change. The College is a nationally recognized value among premier, undergraduate institutions (we are the most affordable of the US News top 50 colleges), and we are steadfast in our pledge to work with families to make Centre affordable. Our combination of scholarships, grants, loans, and campus employment can provide substantial help in meeting the expense of a Centre education.
Graduation in Four Years: Guaranteed. We are also committed to timely education, and graduation in four years (guaranteed by the Centre Commitment) is our standard; whereas, the reality at many institutions is five, six, and even seven years.
This is a Centre advantage that offers multiple benefits. The appeal of avoiding extra years of tuition and living expenses is obvious, but the “head start” that Centre graduates enjoy by moving expeditiously into careers and advanced study is often an even greater benefit. The extra years of earning and experience are frequently key factors in the extraordinary career success for which Centre alumni are known.
The Details. So, if I were a Centre alum or a friend of the College for whatever reason, I would want a report of some consequence regarding the institution’s financial status. In sum: What’s our endowment? What about the College’s approved strategic plan? How do the College’s operating budgets for ’08-’09 and ’09-‘10 look?
First, the raw numbers—our preliminary read on the endowment balance as of early fall (without many of the private equity funds reporting) was $180 million. With the October meltdown, we suspect that we are around $165 million as of this report. These numbers do not include the Wood’s estate gift of $16 million. If we compare these numbers to our high water mark of $207 million, we show a drop of approximately 20 percent, better than the drop reflected in the DOW during the same period.
In looking at the current year operations, we’re on track to have a balanced budget in part because student enrollment exceeded budgeted expectations. We have already begun the process of holding back on current year expenditures, so as to have maximum flexibility in dealing with the uncertainty that will be facing the campus and its community during the next 12-18 months. We’re taking a very conservative approach to the current year’s budget. And while we will look for common-sense economies, the guiding principle in all our financial decisions will be, as always, to preserve and secure the outstanding quality of our academic program.
How does this impact some of the more important work accomplished with our most recent strategic thinking and planning effort? Our current financial status will require us 1) to be all the more strategic with those things we can accomplish on the shorter term and 2) to exercise patience with those plans that will be delayed in their execution. We are not talking about laying aside any of the really good ideas that we discovered and the Board approved in our planning process. This is a time when we might well be able to accelerate the advance of Centre’s reputation and perceived prestige as others less well positioned pull back across the board.
With regard to the generous gift of the Trustee Challenge and the major capital projects that it makes possible, let me state clearly that we, the administration, have talked plainly about making the best choices here and are moving ahead with confidence.
• Pearl Hall, as you know, opened this fall. It will be dedicated next fall, and, thanks to an exceptional gift is paid for in full.
• Chowan is now a part of our campus – known to students on a first-name basis and for this year the site of conversation, debate, romance, planning, laughter, and, oh yeah, breakfast, lunch, and dinner. This temporary facility, one that has exceeded everyone’s expectations, is working well—not perfectly, but well.
• The Campus Center is well underway, with the impressive steel framework already in place. That project is on schedule and on budget – to open next fall and be built for $15 million. It will be a spectacular facility that becomes the hub of student activity 24/7 or, at least, 18 hours per day/seven days per week.
• Science building – this project has moved along especially well. Faculty members, staff members, and trustees have done excellent work to plan an outstanding facility for scientific instruction and research. With the small group of donors who made the Challenge possible standing squarely behind their commitments and the Brown Foundation’s gift of $3 million directed to this purpose, we look forward to rapid progress on this facility now that ground has been officially broken.
• The Norton Center for the Arts– this refurbishment/enhancement project represents a $3 million commitment within the Trustee Challenge, of which approximately $1million has already been spent. The planning committee working on this project has exceeded our expectations. Major work on this project will occur in the summer.
2008–09. Now, what can be accomplished in ’08-’09 and beyond to throttle back our spending in a way that doesn’t do damage to overall programs? I begin this section by reiterating that the trump card in all considerations is to protect the quality of the academic program.
First, I have asked my senior staff colleagues to look for ways – large and small – to “tighten our belts.” We began several weeks ago to think along these lines, and we know there are targets of opportunity in 2008-09.
Some specifics: we have no plans to cut faculty or staff in the current year, though the process for filling vacancies – one that invites a small group of senior staff members to ask the question each time, “Is this a necessary position to fill now?” – will become more rigorous as it did earlier in this decade. We will ask all programs of the College, except admission, to review and reconsider their travel commitments for the current year. We will ask programs of the College to reconsider the purchase of new equipment until the spring. I have asked our winter and spring athletic teams to eliminate one scheduled trip from their schedules. We will introduce an energy conservation program – in line with our commitment to sustainability.
With regard to fresh ideas, I will push hard – harder than planned – to introduce a Global Commerce program into the College’s offerings. I will push hard to identify ways to reduce the cost of athletic travel.
2009–10 and Beyond. We have no plans to cut faculty or staff, though we do not plan to add any staff next year. The process for replacing open positions will remain rigorous and could become more rigorous. We will investigate ways in which the College can grow and develop new programs that will attract new students and donors. Centre remains a “strong buy,” and we will be aggressive as opportunities present themselves. In addition to pointing toward introducing a Global Commerce program into the College’s offerings, we will also, for example, investigate the return on investment that may be possible by adding women’s and men’s lacrosse – a program addition that could grow our student population and take Centre into schools and homes that are not currently “on our list.”
A Tradition of Success. I close by suggesting to you that there is much to feel good about at Centre College. I don’t intend to minimize the seriousness of our nation’s, our globe’s, financial crises, but our place – Centre College – can and will weather this storm. This may not be true for all institutions, to include any number of private colleges in the Commonwealth, but it is true for us!
I teach a class each January to a group of first-year or junior and senior students. We read about and discuss in some detail situations in which leadership is tested. One of the quotes my students like best is, “How does the leader do when it rains? How ’bout when it pours? Great leadership shows itself best when the sky is falling and all others around have taken to their caves.”
Friends, we find ourselves in such a time – for many it is raining hard. This is an occasion for leadership from Centre’s Board of Trustees, from Centre’s alumni and friends, from Centre’s senior administration, from Centre’s faculty and staff, from Centre’s students. I’m confident that we will be equal to whatever challenges come our way. I’m confident that the intense, personal education offered by the College will continue to give our students the best possible preparation for extraordinary success in navigating and thriving in the unfolding 21st century. And I’m confident that, even in these times, Centre alumni and friends will continue to support the College with the dedication and commitment that has earned them recognition as “America’s leaders in loyalty.”
Sincerely, John Roush President, Centre College