Protecting Bryn Mawr’s financial future: a letter from President McAuliffe

Posted December 4th, 2008 at 12:13 pm.

Dear Bryn Mawr community,

As we enter the final weeks of this semester, I would like to update you on the College’s financial position and on our plans to protect our financial future.

We are fortunate that the College was on a strong financial footing as the current economic downturn began. Our endowment grew from $466 million in 2004 to $688 million at the end of the fiscal year 2008, which concluded on May 31. Two factors fueled the growth of our endowment: the success of the Challenging Women campaign and the College’s move, beginning in 2004, to diversify its investment portfolio so as to improve returns and moderate the effect of fluctuations in global financial markets. This diversification has sheltered us to some extent from market declines over the past year.

In addition to endowment income, which provides 29 percent of our budget for the current fiscal year, the College’s financial well-being also depends on a healthy enrollment position and a strong Annual Fund. Bryn Mawr has enjoyed success in both admissions and fundraising in recent years. Last year we received a record number of applications, continuing a six-year upward trend. The Annual Fund, which grew 75 percent over the past 7 years, now contributes nearly $6 million, or six percent, to the College’s annual operating budget.

Through this period of success in fundraising, investment, and admissions, the College has been managed prudently. Three years ago, for example, we changed our endowment spending formula to “smooth” our spending over time. During periods of high returns, we did not increase our spending to match the rate of growth; likewise, during any period of downturn we will not decrease our spending at the rate of decline.

We are not insulated, however, from the current economic crisis. The substantial drop in the markets that began this summer has resulted in a 22 percent decline in the value of our endowment as of Oct. 31, which is similar to or slightly better than the performance of endowments at other leading private colleges and universities. We also expect somewhat greater demand for financial aid from current students and from this year’s applicants for admission. The current downturn may also affect giving to the College. We are gratified, however, by the number who are making the College a priority. Their support is particularly needed this year.

While the market’s volatility makes it impossible to predict year-end results, it is clear that we, like most other colleges and universities, will be trimming budgets and prioritizing spending. We are now putting into place a comprehensive planning process to determine how best to reduce expenditures. Our goal in taking early action is to maintain our commitment to current and future students, faculty, and staff.

Because the College’s financial position entering this period of economic downturn was strong, we believe that we can reduce expenditures without damaging the core mission of the institution. The decisions we make will involve all campus constituencies in the work of aligning our resources with our highest priorities:

  • Maintaining academic quality; and
  • Continuing to meet the full demonstrated need of current students receiving financial aid and to assist students whose financial circumstances have changed

I will provide further updates to the community as our budget review process progresses; they will be posted at I am grateful to all members of the campus community for their hard work to meet current challenges, and to the College’s alumnae/i and friends for their support of this special institution.

Yours sincerely,

Jane McAuliffe

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