President Helm's Message on the Economy
February 23, 2010
Dear Muhlenberg Friends and Family,
In recent days, some of our nation's finest colleges and universities and some of our closest neighbors have responded to the economy's continued weakness by laying off scores or even hundreds of workers, revising financial aid policies, eliminating programs and cutting varsity sports. As such stories fill the headlines, and as we prepare to develop operating budgets for the 2011 Fiscal Year, I suspect that many members of the Muhlenberg family wonder how our College is faring.
The short answer is: so far, so good. Our priorities remain clear: balance the budget; provide students with sufficient aid to preserve access to a Muhlenberg education; and avoid layoffs. At this point in FY 2010 we are on track to achieve all three of these priorities.
Some important points of information:
1. Thanks to robust giving and conservative investment policies, our endowment declined by a smaller percentage than any of our benchmarks and has been recovering value during the past year. Nonetheless, the endowment is still down approximately 10% ($14 million) from its peak value in October 2007.
2. The Talents Entrusted to Our Care Campaign is on track for successful completion on June 30, 2010, thanks to the hard work of the Development team and the generosity of the Muhlenberg family (the campaign reached $103.4 million as of December 31, 2009). We should not, however, be fooled into thinking that our success in reaching the $105 million goal will produce a sudden influx of wealth for Muhlenberg. Many of the resources obtained for the campaign have already been spent on new facilities, or are committed to restricted purposes (endowed scholarships, endowed faculty positions, etc.). Approximately $20 million of the total is represented by contributions to The Muhlenberg Fund over the years of the campaign. Those funds supported the operating budget during the years they were given. The campaign will have made us stronger and better in many ways, but it has not made us wealthy - and it must not make us careless or profligate.
3. Regular applications to the College are up approximately 4%, thanks to the great work of our Admissions staff. However, early decision applications are down approximately 10% as families wait for competing financial aid offers and postpone a final decision about committing to the cost of private education. At this time, the financial need of our applicants is higher than last year and we must retain budget flexibility to meet the need of new matriculants as well as the ongoing need of current students. If we need to increase the financial aid budget to meet the needs of our students, that will put pressure on other budget areas. We will not know how much pressure, or what budget adjustments will be necessary, until sometime in late May or early June. At present, I do not expect such adjustments to be unreasonably severe, or that they will compromise the quality of the Muhlenberg experience.
In this time of challenges, I can't help but note that everywhere I look on this campus there is abundant evidence of robust institutional vigor. The superb talents of our performing arts students, ambitious student research, the extraordinary commitment to teaching displayed by our faculty, the success of our athletic teams, wide-ranging community service activities,the remarkable performance of our Plant Ops crews during the recent snowstorms, as well as distinction in many, many other areas of endeavor convince me that Muhlenberg continues to thrive and advance in the teeth of stiff economic headwinds. Working together, with pride in and commitment to our College community, we will continue to thrive. Thank you for the part each of you plays in our success.
Peyton R. Helm