Economic Letter November 2008
Dealing with the New Economic Realities at Mount St. Mary's University
We find ourselves in an extraordinarily turbulent economic climate and all of us are sensitive to the ways in which this climate affects us as a university. I am closely monitoring the current situation and its potential impact on the Mount.
I can assure you that we are a strong university. We are strong first and foremost because we have superb people addressing these economic issues. We are strong because we can dip into our deep reservoir of faith to address and dissolve the fears we encounter. And we are strong because through faith, we find the courage to carry out our calling to educate young men and women as a proudly Catholic university, as we have for the past 200 years.
The Mount, like many Catholic universities, operates in a fiscally conservative manner and is highly reliant on student tuition with a relatively small endowment income. What that means in an unsettled marketplace is that we must constantly attract new students, retain our current students, and rely on the ongoing generosity of our alumni and donors, whose love and devotion to the Mount are unquestioned.
In this latter regard we are most fortunate. I continue to be impressed with alumni who have responded to our Annual Fund phonathon with personal generosity during these unsettled economic times. As all of you know, we rely on these Annual Fund dollars for operating expenses to keep our tuition and fees reasonable.
The recent upheavals in the financial markets have not left us unaffected and there are no reasonable estimates for a quick recovery. Our endowment has, like most endowments, lost value. We have also experienced a $240,000 budget reduction from the state of Maryland as they, too, deal with the financial crisis. These stormy economic seas, while troubling, will not throw us off course. We are fortunate that our strategic plan, developed over the past five years, has forced us to focus on what is important.
In the coming months we will be very cautious with our spending. Now, and as we plan for the years ahead, we remain committed to providing Mount families with generous financial scholarship packages as well as superb education. In addition:
We are studying our pricing structure for the future to maintain our competitive edge.
If parents or students let us know they have financial difficulties, we will work with them to design a financial aid plan suited to their circumstances.
The university's Financial Affairs Committee is developing recommendations to reduce our operating budgets even further, with the savings to be dedicated to our scholarship program.
Our Financial Aid and Business offices will find every resource available to families in need and provide that necessary information to you.
While it is unclear how long the recession will last, if past history serves as a guide, we can expect the next 10-12 months to be a difficult economic period for our nation. However, we all realize that the recession will end and our nation will again enjoy a period of prosperity. We will pursue strategic actions that will deal with the current economic reality as we also address our long-term goals to build a strong university for our third century of service.
Now, more than ever, we will continue to look within to find the forces supporting our enduring tradition of love and caring for which the Mount is so well known. We will also be sensitive to the conflicts facing families who are experiencing a financial crunch yet remain committed to the exceptional education provided at the Mount.
We will fulfill our vocation to education by loving God and attempting to follow his purpose for our university as we can best discern it.
I am confident with the help of God and our faith we will weather this storm with courage and patience, standing fast as we have for 200 years.
Thomas H. Powell