Chancellor Mark Wrighton speaks on the issues and challenges currently facing Washington University and those the school will face in the short-term future. The University’s endowment is estimated to have fallen 25 percent since the end of fiscal 2008 and is expected to continue declining. (Matt Mitgang | Student Life)

In the midst of the worldwide economic crisis, Washington University is dealing with a difficult financial situation of its own.

The administration estimates the University’s endowment is down by 20 to 25 percent as of the end of May, according to Chancellor Mark Wrighton.

“That [estimate] might be a little better than we had in mid-April, when I communicated it to the community,” Wrighton said in reference to an e-mail he sent to students, faculty and staff to inform them about the University’s financial situation.

He followed up that e-mail with a “State of the University Address” on April 23, providing the community an opportunity to ask questions.

Wrighton said donations to the University have held relatively steady, even as the number of donors to the University has decreased.

“[It] might even be ahead [of] last year,” Wrighton said.

In fact, the total amount of money donated to the University in fiscal 2009 as of the end of May was 4 percent higher than the previous year, according to David Blasingame, executive vice chancellor for alumni and development programs.

Blasingame said the University is also outperforming peer institutions in donations.

“I think most places are experiencing downturns,” he said.

Blasingame attributed the University’s slight upturn to several large donations at the beginning of the year. The University, he said, also has benefited from an institution-wide strategic planning, which provides potential donors a glimpse into new ideas and plans underway at the University.

As one of the foremost responses to the economic crisis this past year, Wrighton said the University is re-prioritizing resources to increase financial aid. Bill Witbrodt, director of Student Financial Services, said the financial aid budget “has top priority.”

“We recognize that when the economy is rough, our families are having a tough time too. We need to do all that we can to make sure that our students can continue their education at Washington University,” Witbrodt said. “When things are tough, it’s even more important to have a stable financial aid budget.”

The student financial aid budget has increased by 20 percent in the past two years—a feat accomplished partially by cutting administrative expenses. Meanwhile, tuition has risen—though by less than 10 percent, Wrighton said.

This is the first time that University has had to freeze compensation expenses since Wrighton’s tenure as chancellor began in 1995, he said. The University has also filled advertised jobs slower and recruited fewer faculty this year than usual.

Wrighton predicts the next fiscal year, beginning July 1, 2010, will be even more challenging. In fact, the University—in efforts to brace itself for greater financial troubles ahead—has started preparing for next year much earlier than it has in the past.

Even with the chancellor’s recent disclosures about the University’s economic state, most students remain dissatisfied with the administration’s extent of communication and transparency in financial issues.

This past semester, several students came together to start a Facebook group called “WU Students for Endowment Transparency” (WUSET). Junior Jacob Stern, one of WUSET’s founders, said he and others formed the group after reaching a consensus that students have very limited access to the University’s financial information, such as the breakdown of the endowment.

“By adopting a method of controlled disclosure, the University would join the ranks of prestigious educational institutions, such as Brown, Harvard, Yale, Duke, Stanford, and Columbia that have empowered students by making investment records available but would not limit the power of trustees or administrators,” the group’s mission statement reads. “We feel this step would reflect an institutional commitment to student participation in the broader university community.”

WUSET is in the stages of preparing for more active efforts in the fall, including talks with the administration.

“We really hope that it can be a really cooperative relationship,” said Stern, who hopes that the partnership will be beneficial for both students and administrators alike. “We don’t see the administration as an enemy by any means.”

Although our University is and has been an image-conscious institution, we believe that any changes in the operating budget should prioritize internal well-being above public image. With this in mind, we believe that budget cuts can be made in programs that seek to attract prospective students—for example, programs that fly international prospectives to St. Louis to visit Wash. U., and—as the chancellor has suggested—in mailings to prospective students.

In line with prioritizing internal well-being above external image, we believe that “image” costs—such as landscaping—can be reduced, and we encourage the administration to make cuts in spending on food and drinks at University events.

We believe that reductions in the University’s internal costs should emphasize an environmentally friendly stance, and we commend the chancellor for keeping environmental incentives in mind when presenting his plan of reducing costs. The University should encourage professors to find alternative ways of formatting readings so that students can read them online without printing. Moreover, professors can be encouraged to accept papers by e-mail instead of in print, reducing both paper waste and printing expenses.

Finally, we feel that the current financial situation merits a consideration of the cost-effectiveness of student groups. We believe that the leaders of Student Union (SU), whose funding increases incrementally with tuition each year, should be encouraged to meet with financial experts within the University to help reduce their operating costs and see where their budget can be cut for futures years. There is no current incentive for the operating costs of student activities to be reduced, and we feel that it is imperative that the University encourage frugality as an end in itself.

Although it is tempting to dismiss the chancellor’s remarks as suggestions that will not impact the state of our well-being as university students, Wrighton implied explicitly in his address that, since 62 percent of Wash. U.’s operating costs come from faculty salaries, would not see their normal pay increases for the next few years. In line with an emphasis on internal well-being, we, as students, ought to take it upon ourselves to ensure that the quality of our education does not suffer from the reduction in the University’s endowment. Because the quality of our education depends directly on the quality of our professors, it is imperative that we, as students who have been encouraged to engage in a larger discussion about the University’s operating budget, attempt to avoid faculty discontent. We should, therefore, encourage cuts that do not affect faculty pay. As members of a community that values the quality of its professors, we should speak up and request that cuts in SU funding, in image costs and in wasteful internal spending come before any adjustment to professors’ salaries.

Chancellor Mark Wrighton speaks on the issues and challenges currently facing Washington University and those the school will face in the short-term future. The University’s endowment is estimated to have fallen 25 percent since the end of fiscal 2008 and is expected to continue declining. (Matt Mitgang | Student Life)

More than 100 Washington University students, faculty and staff gathered in Edison Theatre yesterday morning to hear Chancellor Mark S. Wrighton’s “State of the University Address” on the fiscal circumstance of the University.

Wrighton covered topics such as construction and budget breakdowns and offered cost-saving initiatives that will be implemented to help cushion the University from the economic crisis.

Wrighton announced the place and time of the address at the end of his e-mail to the University community two weeks ago acknowledging the University’s ongoing difficulties in the midst of the national economic crisis.

In addition, he outlined the financial challenges that the University now faces, including the decline in the endowment value, a lower increase in tuition this year, greater student financial aid needs, a poor fundraising environment, risky clinical revenue and the brevity of the stimulus package.

Wrighton chose to focus mainly on the loss of endowment revenue, which has been a highly debated topic in current weeks. At present, the University’s endowment has declined by more than 25 percent, producing a fiscal situation that the Chancellor acknowledged is “very fragile.” The total endowment loss by the 2010 fiscal year will be approximately $20 million.

Wrighton remarked that the University’s current financial state is also unprecedented.

“When I think back to my entire academic career, which began in 1972, this is the first time that there has been such a decline,” he said.

The administration, however, has plans to implement cost-reducing initiatives to alleviate the institution’s financial pressures. These measures will include energy conservation, improvements in efficiency level and a reduction in printed materials and labeling.

Executive Vice Chancellor for Administration Henry Webber will head a new organization called the “Tiger Team,” which will assist with improving the University’s efficiency and reducing its operating expenses.

The administration also proposed the expansion of summer school programs to help bring in greater revenue and the expansion of the University’s fundraising staff.

Master’s programs also will be reevaluated and expanded. The Sam Fox School of Design and Visual Arts will soon be introducing a new master’s degree in landscape architecture, which will be the first of its kind in the region.

After his address, Wrighton responded to questions from the audience and those submitted online.

One major concern put forward by the audience was the possibility of buying out employees close to retirement. Vice Chancellor for Finance Barbara Feiner explained that compensation benefits comprise 62 percent of total operating expenses throughout the University.

Although Feiner acknowledged that the idea would be up for consideration, she said, “Many of the decisions we’re making now are directed at reducing the risk of loss of employment.”

Wrighton stressed that the administration is open to suggestions from the community, which can be submitted at the Web site http://suggestion.wustl.edu.

“We pledge to consider every suggestion seriously and try to take advantage of the creativity and dedication of those in our community,” he said.

Of the 100 or so present at the address, the majority were faculty members. Only a few were students.

“What I don’t really understand is the timing [of the address] at 8:30 a.m. in the morning,” said junior Lauren Weiss, who attended the address. “I thought it was a little bit disingenuous on his part. It’s silly to say that you value your students’ input when you put it at a time when you know most students would not come.”

Although Weiss believes that Wrighton gave the audience a good sense of the University’s financial state, she thinks he deflected some questions posed by the audience in his responses.

Weiss asked a specific question about the chancellor’s goal to enhance diversity on campus in the economic downturn—a point discussed in his e-mail earlier this month.

“I asked him, ‘What do you mean by diversity? How exactly do you plan to implement the policies on campus?’ He answered the first part well, but he just didn’t really answer the second part,” Weiss said. “I am thrilled that the chancellor thinks diversity is important. I just think there should be a greater focus on honesty.”

This story has been updated to reflect the following correction:
An earlier version of this story misquoted junior Lauren Weiss as stating that the Chancellor’s decision to schedule the forum early in the morning was an intentional choice to exclude students. In fact, Weiss stated that the choice was unintentional; the rest of the quote was accurate.

At small private colleges and universities, the effects of the economy on applications have been significant. Although the number of early decision and early action applicants is consistent with previous years’ figures, there has been a sharp fall in applications for regular decision.

Conversely, public universities are seeing large increases in applications as families seek to take advantage of less expensive alternatives to costly private universities.

While most universities that are capable of offering large amounts of financial aid are not receiving fewer applications, they are seeing an increased proportion of applicants requesting financial aid.

Washington University appears to fall into this category, though the admissions office could not provide specific figures.

“I don’t know what to tell you about applications—except that they are coming,” Director of Admissions Nanette Tarbouni wrote in an e-mail to Student Life. “This is a busy and hectic time in admissions, as we are busy reading all the applications.”

With many families wondering if the $50,000 cost of attending the University will be affordable, University officials are encouraging families from all income levels to seek financial aid.

“Of course, students are asking about financial assistance and academic scholarships, and we are encouraging them to apply for both,” Tarbouni wrote.

The undergraduate admissions Web site advertises the University’s dedication to financial aid to prospective applicants.

“We invest in our students by providing significant financial assistance. About 60 percent of our undergraduates receive some form of financial assistance. This commitment means [prospective applicants] should not be discouraged from applying to Washington University because of the cost,” the Web site says.

The financial aid office assures applicants that they are making every effort to make the University an affordable option for all applicants.

“With regard to ensuring all qualified students can attend Washington University, nothing has changed. Student Financial Services is committed to not letting finances stand in the way of admitted students’ enrollment here,” Director of Student Financial Services Bill Witbrodt wrote in an e-mail to Student Life.

To accommodate the needs of as many students as possible, the financial assistance office has postponed its deadline for requests for financial aid until Feb. 15, 2009.

The regular decision application deadline was Jan. 15, 2009. According to Tarbouni, until the admissions process is complete, the economic situation’s effect on applications won’t be clear.

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