STATE OF THE COLLEGE ADDRESS
Alma College
Saundra J. Tracy, President
March 5, 2009
Thank you for coming this morning to this annual event, now a tradition at Alma College. It is a chance to gather as a community and for me to share a brief update on the status of the College. Today’s update has no dramatic pronouncements or unexpected news - but it is a very good story of continued momentum and the hard work of this community that positions Alma College well, even in this times of economic uncertainty.
I will briefly address three questions this morning — questions I sometimes hear within our campus community:
- Where is the College headed (do we know?)
- How are we doing this year?
- How can we navigate these difficult economic times?
Question One: Where Are We Headed and Do We Know?
Let me take you back to Alma’s mission statement — to prepare graduates who think critically, serve generously, lead purposefully and live responsibly as stewards of a world they bequeath to future generations. From that mission statement, the 2003 strategic plan was created that we have regularly updated. The plan’s focus is rightly on students - the Alma experience - and charges us to personalize the Alma experience to our students interests and needs, to develop in students a common set of knowledge skills and commitments the result in service, leadership and stewardship, and to offer rigorous preparation in majors that lead to success in jobs and grad and professional schools. The other goals of our strategic plan are those that allow the Alma experience to happen - grow enrollment, support our people, improve technology and facilities, reach out to other constituencies for support, and improve our fiscal sustainability. And much progress has been made indeed since 2003!
Last spring I suggested we collapse the nine goals of the strategic plan down to three areas of focus. After all, few of us can remember nine goals if we try — three is probably about right. These broad areas of focus are
- Enhance our academic reputation (in other words — focus on academics),
- Grow enrollment (1800 by 2020)
- Diversify revenue (fiscal sustainability).
Those three areas certainly are enough to keep us busy for some time. They don’t capture all that we must do; our College annual goals pick up a number of other tasks we must complete. But the strategic plan coupled with annual goals creates the roadmap that we come back to over and over. We do not follow these documents slavishly but use them as reminders of where we have been and where we are heading.
So back to the question — where are we headed? Alma College stands out from the crowd because of what we instill in our students: critical thinking, service, leadership and stewardship. We call these outcomes collectively “responsible leadership.” We accomplish these outcomes through our unique Alma blend of personalized educational experience, rigorous academic programs, and wide range of opportunities for students both at Alma College and throughout the world. Finally, the proof is in the accomplishments of our students and alumni — stories we must tell more forcefully and broadly.
Question Two: How Are We Doing as Of March 2009?
Let me highlight only a small number of your accomplishments. There are far too many for my brief comments today. I am sure each of you knows of many more sometimes behind the scenes accomplishments that indeed define Alma College and this wonderful community. As I mentioned a few minutes ago, we will post those that you list on the index cards today on the web along with my comments.
Focusing on accomplishments in our three key areas of emphasis:
First, Academic Reputation
A few of you may remember my comments last year at this time that the final and most important stage of academic institution transformation is strengthening academic quality. Well, we have tackled this stage with great success in the past several months. Our faculty moved in record time to design and pass a new general education curriculum - 18 months to approval last August. Steps toward implementation are now underway. What was most exciting as I observed this process was the faculty focus on students. I am not sure many people fully appreciate what a significant accomplishment this was. After all, it had been almost 30 years since such a significant change had previously happened.
Faculty also generated 14 exciting proposals for signature academic programs in response to a request from the provost, programs that address significant societal needs, will prepare Alma graduates for new work environments, and build Alma College’s visibility and reputation. Provost Selmon and I made the difficult choice to select Integrated Health program as the first signature program for development. This exciting concept weaves together several proposals across a number of disciplines to create an innovative set of health related academic options ranging from health care management to biotechnology, environmental health and the many pre-health professional programs. The team designing this program will look at the best and most cutting edge curricula in the nation as they finalize a design by the end of September.
The Center for Responsible Leadership also has made significant progress this year. Charged with weaving together a number of experiential options for students and creating important linkages with academic programs, the leadership team has totally revamped the leadership fellows’ experience. This new design offers tremendous opportunity for Alma College students and for distinguishing Alma College for responsible leadership development.
Second, Increase Enrollment
Did you all do a great job in this area this year or what! We welcomed the largest incoming class in the College’s history for the second year in a row. Now we must make the more than 400 for fall 2009 because Alma has NEVER had three years in a row of 400 or more new students.
Although we saw a drop in retention from last year to fall 2009, that turned around fall to winter when retention actually rose - in spite of an economy that pointed to a different outcome.
We recently signed an innovative agreement with Equatorialis University in Ecuador, an agreement that offers wonderful academic opportunities for Alma students and faculty but also creates an enrollment stream of South American students starting in three to four years.
A newly developed integrated marketing plan specifically addresses both academic reputation and student recruitment.
Less obvious is the good work and dedication of each member of this community. We simply reach out more to prospective students and their families. As one family reported back after an Alma visit, everyone at Alma was simply nicer and more helpful than any other place they visited. It really is who we are as a community and it shows. Thank you!
Third, Revenue Diversification to Increase Our Fiscal Sustainability.
The Ecuador agreement is a prime example of diversifying revenues, making Alma less reliant on traditional 18-21 year old Michigan markets.
Fundraising is another strategy in this area. We are at an amazing 95.4% of our campaign goal of $35.25 million, a year ahead of schedule. While giving to the Alma Fund and major projects has slowed noticeably in recent months, many people are responding with planned gift commitments. We only have $1.6 million to go so if you know of anyone…..
Ironically, we made progress in moving toward long term endowment growth, even though the short term value of the endowment is pretty dismal. We hired a consultant to work with the Board investment committee for a through review of endowment allocations and managers with a goal of significant increase in endowment size over the next ten years. Our next campaign is likely to be endowment focused.
Other accomplishments include the excellent work of the Administrative Software task force, moving forward the Hogan and academic facilities projects, and many other accomplishments too numerous to mention.
In addition, the FY09 budget is tracking right on target. I anticipate a small surplus at the end of the year ($300,000 or so), but it is way to soon to know where we will end up.
Question Three: How Will Alma College Navigate These Perilous Economic Times?
You all know that the economic environment is not a friendly one to individuals, businesses, or college and universities these days. We know that among private liberal arts colleges in the Midwest, a number are experiencing significant downturns in applications and deposits. One Michigan select private announced an almost $3 million budget deficit for THIS YEAR. Some are cutting budgets significantly for next year. Others are tracking okay on enrollment at this point but have seen significant losses in their endowment, have frozen salaries and hiring, and are planning for 5 to 10% budget cut possibilities in the future.
What do I predict for Alma College given this context? Alma College is positioned far better than many of these institutions, but we are challenged by these times. Think about our institutional trajectory. In the early years of this decade, we struggled mightily with low enrollment and endowment simultaneously. We made significant budget cuts at that time, paring operationally costs to the bare minimums. After being diligent stewards of limited resources, we then put together a plan to invest in strategic areas that would impact enrollment — and these investments have worked. We have enjoyed growing enrollment and institutional momentum the last few years. We have had balanced budgets and even built a small reserve of a little over $1 million to help cushion us against the unexpected.
Many of our sister Michigan privates that were on the upswing during our difficult years more recently have run into their own challenges. These economic times are challenging for each institution, and it is far better to be on the upswing than tracking downward when this all hits. Being positioned well among one’s peers in these times is a tremendous advantage. Aren’t we glad we did not peak too soon?
Still, there are a number of financial realities we have to face, many with unknown consequences:
Our endowment has taken a tremendous hit, not worse than other institutions, but larger than we have seen before. For an endowment at $101 million on June 30, 2008, it was at $77 million the end of Jan 2009. And it is assuredly below that value today. We will begin to feel the impact of this lower endowment in FY10 but even more so in FY11 and 12 when these lower values roll into our endowment spending formula.
Our students and their families have serious financial concerns. We must assume need based aid will go up, and it will be more difficult to get families to commit to private higher education. I do not believe we can rely on past predictors of fall enrollment as reliable indicators of how many students we will have this coming fall.
Gift income is down (the Alma Fund is down about $40,000 compared to this time last year toward a $1.1 million goal)
In spite of these realities, Alma College’s future is far from doom and gloom. We are pursuing two courses of action:
The first is to retain as much budget flexibility as possible. Once we commit funds, it is very difficult to take them back. Many of you already know that I am holding on a decision on salary increases. The preliminary FY10 budget has an across the board 2% increase play and a $50,000 pool. This does not mean I will hold contracts. Contract letters and letters of appointment will go out on our regular schedule but will contain the current year’s pay level until we make a decision. I put a hold on a few searches - not all, but some - while we sort out the budget realities for FY10. Please understand that none of these reflect budget cuts. It is a question of whether we can include the increases that we might like in next year’s budget. I will be extremely prudent and strategic in committing spending until we better know the impact of this economy. We must position Alma College for FY10 but also for the difficult budget years likely to follow until the economy rebounds.
My second strategy may seem contradictory; it is to seize opportunities that appear in this unstable environment. Our Hogan facility project is a prime example. We are one of the few private institutions able to go to the bond market this fall; we made it by about four days before the ability to sell bonds for facilities projects completely dried up. This major project creates further evidence of institutional momentum while other schools are retrenching. Even better news is that the contract for construction came in significantly below what we estimated due to the current construction market. And that includes the options we were not sure we could afford. It also means that the Hogan facility will be our first LEED certified building, advancing our commitment to an environmentally sustainable campus.
I repeat that Alma College is positioned well to seize selected opportunities in these times. When we do, we will emerge in an even stronger position relative to our peers with increased visibility and distinction when economic conditions improve.
I want to continue the conversation that hopefully my comments today have started. Thus, in addition to the coffees, faculty meetings, and similar regularly scheduled events, I will set up a monthly chat time for Q and A to make sure you stay informed on the College’s financial status and other areas of interest to you. Please use the remaining index cards on your tables to suggest questions you have or areas about which you want more information.
A difficult and unstable environment surrounds us. Alma College has the advantage of being a dedicated community that works well together and is focused on students. Thus we can be more agile than many schools, more creative in our problem solving, and more focused on the real priorities. In sum, it is the members of this campus community, YOU, that attract and retain students and create the institutional reputation and visibility we seek. I greatly appreciate your individual and collective contributions to this community and your focus on the students we serve.
