Jehuda’s note on fiscal troubles

Brandeis University president Jehuda Reinharz just sent out an email letter to the entire campus titled (and regarding) “Brandeis and the Economy update”.

There’s not much news there. Yes, Brandeis has been suffering. Yes, l’affaire Madoff has not damaged the endowment directly, but, “sadly, Brandeis’s most staunch and generous supporters suffered major losses.” There will be more budget cuts. Since students need more financial aid, but tuition is pays for about half of operating costs, we’re in a bit of bind.

Here’s the most interesting graf –

The Special Faculty Advisory Committee and the Student Advisory Committee have provided important and thoughtful insights and information to the senior administration in order to help us identify, examine and optimize the university’s core strengths and strategic assets. Based on those discussions, the University Budget Implementation Committee, which includes four university trustees, is working closely with the administration and is making substantial progress. As we begin the new semester, we will continue to work collaboratively with the student and faculty committees, which are helping us navigate through the financial crisis. And, we look forward to strengthening working relationships with the Faculty Senate and other faculty and student leaders. It is clear that the university will be forced to examine proposals for additional cost reductions to address anticipated and unanticipated budget shortfalls, and we will reconvene discussions with the appropriate working committees at once. The speed and intensity of this financial crisis is unprecedented, and it will require the university to respond to events in an extraordinarily abbreviated timeframe.

That was alarmingly vague. In what ways are faculty, staff, and students consulted and involved? Do they meet once a week or once ever? What powers and access to information do students and faculty have, exactly? Without these concrete details, we have nothing but the fragile soap bubble of good sentiments.

Here is the full letter:

Dear Members of the Brandeis Community,

The New Year will present all of us at Brandeis with great challenges and, I believe, great opportunities. Brandeis has not only an urgent need to respond to further developments in the immediate financial crisis, but also an obligation to plan now for a future of uncompromising and continued excellence.

Let me outline for you the current challenges. While some saw signs of an impending global financial crisis last year, no one could have predicted the intensity of the recession, or the Madoff debacle, and the major blow it would deal to philanthropy. The Madoff aftershock produced a second wave of financial crisis felt acutely in Boston’s major not-for-profit institutions, as well as many other cities in the United States and abroad. While it was a relief to report that the university never invested money with Bernard Madoff, sadly, some of Brandeis’s most staunch and generous supporters suffered major losses. It is very hard to calculate the immediate and long-term effects on the university’s fundraising results.

Previous estimates of shortfalls affecting FY2009 and subsequent budget years could not have anticipated these financial disasters or their combined effect on Brandeis’s bottom line. In my earlier letters, I wrote that the university has suffered double-digit losses to our highly restricted endowment. This has placed severe limitations on our operating funds. Moreover, with about half of the operating budget derived from undergraduate tuitions, increased families’ financial aid needs and the current market trend away from private higher education to lower-cost public universities causes us concern.

In adversity, we can also find opportunity. There is no other university quite like Brandeis, an academic enterprise that has come so far, in so short a time. Our telescoped trajectory into the most competitive and august academic circles was built upon unswerving belief in a core academic mission and an intrinsic respect for Brandeis’s four pillars — our fundamental commitment to excellence, Jewish sponsorship, non-sectarianism, and social justice. The current financial crisis must prompt us not only to reduce spending, but more importantly, reexamine our current financial and strategic foundation. We must anticipate further budget reductions, of course. However, we cannot simply cut across the board without endangering the life force of this great university. We can and we must seize the opportunity of this financial reality to take a fresh and strategic look at everything we do, and to measure its importance against our historic mission and our future obligations.

The Special Faculty Advisory Committee and the Student Advisory Committee have provided important and thoughtful insights and information to the senior administration in order to help us identify, examine and optimize the university’s core strengths and strategic assets. Based on those discussions, the University Budget Implementation Committee, which includes four university trustees, is working closely with the administration and is making substantial progress. As we begin the new semester, we will continue to work collaboratively with the student and faculty committees, which are helping us navigate through the financial crisis. And, we look forward to strengthening working relationships with the Faculty Senate and other faculty and student leaders. It is clear that the university will be forced to examine proposals for additional cost reductions to address anticipated and unanticipated budget shortfalls, and we will reconvene discussions with the appropriate working committees at once. The speed and intensity of this financial crisis is unprecedented, and it will require the university to respond to events in an extraordinarily abbreviated timeframe.

This is a critical moment for Brandeis — one that will shape the university for many years. Our connected community, our success, our youth and our flexibility can allow us to use this crisis to reconstruct our financial and strategic footing. We have no choice but to match the present and the future to the financial reality. This is the right time to take a fresh and objective look at Brandeis, our mission, values and offerings, within the larger context in which we operate. We do many things exceptionally well, and we must continue to invest in our future success. To do this, we will need to summon the best of Brandeis, to be bold and innovative, and willing to take some risks and assume some hardships. If we can do this, the rewards will outweigh the sacrifice. We will focus on academic excellence and the preservation of the value of a Brandeis degree. We will make the connections across disciplines and functions that will better prepare our students and graduates for the multiple career changes and critical life challenges they will encounter in the 21st century. We will continue to graduate students who are committed to improving the world. And, we will have both served and preserved the university in the process.

Sincerely,

Jehuda Reinharz