Saturday, October 18, 2008
Video of the speech
Good morning and welcome to all of you. Parents, grandparents, I met a number of you this morning, so glad you’re here. And, of course, homecoming alumni and alumnae, it’s great to have you.
This is always a wonderful moment and weekend. Can there be anything better than a smashingly beautiful fall day on a college campus in October? It’s really terrific. One of the iconic experiences, certainly, that we have here, and I hope you’ve had a wonderful beginning to the weekend and that the rest of the weekend is also interesting and satisfying to all of you. I hope you actually get some time—those parents here—to see your students in their busy lives here at Colby.
I want to do this morning what I customarily do, which is talk a little bit about the state of the College, the present-tense state of affairs here at Colby. I want to talk a little bit about some of our thoughts about the future, my thoughts about the future, and our aspirations. And also, as I customarily do, to leave some time for questions and comments, because I always learn in the company of parents and alumni all kinds of important things, and it’s very important for me to be aware of what’s on your minds. So I’ll look forward to that moment, too.
We’re podcasting this, I think for the first time this morning, so we’ll have a little bit of added technical complexity of asking during that comment and question period if you would speak into a microphone so those questions and answers can be understood by those listening by way of podcasting.
As I begin with some thoughts on and remarks on the state of the College, I’m intensely aware, as you are intensely aware, of how unusual and challenging are the circumstances in which I stand before you today and share these particular thoughts. Of course I’m thinking about the very dramatic and stressful financial and economic circumstances that face all of us. And since it would be a little strange of me to talk about the state of the College and not talk about the effects of the current financial situation and economic situation on Colby, I’m going to begin with that and be very direct and head-on about that, as I have been with members of the campus community over the last week or so. I’ll give you a little report on how we’re doing and the kinds of challenges we’re facing, because I know that some of them affect you as parents, those parents who are here, and they also affect, of course, the longer-term prospects of the College that are of concern to all of us.
As I do that, I want to begin by saying that we are very well served by the fact that Colby has been a very conservative institution on virtually every financial front that matters over the last period of time that I’ve been here and certainly for many years before that. We have been very careful about growing the expense base of the College at too fast a rate. We have been very careful not to incur too much debt—we are one of the most lightly indebted institutions among the group that we currently compare ourselves to. And we have been very conservative and cautious and careful with respect to our endowment spending rate, that part of our endowment that we’re able to spend every year in support of the operations of the College. Those forms of conservative financial philosophy and practice have served us very well and, of course, during challenging times like this, they really, really matter.
It leads me to offer this summary statement: that right now, and in every way that matters, I’d offer the positive statement that the circumstances of the College are stable—that we have every expectation of being able to continue to meet our essential obligations and commitments. (I’ll come back to some of those in just a minute.) Though, even as I say that, I’m aware that there is a likelihood that we’re going to feel certain kinds of constraint in the future, going forward in the next 12 months or 24 months, but, nonetheless, still within that context of being able to meet our fundamental commitments and our obligations.
The key factors that are now affecting us would not surprise you. They are the things that are affecting every major organization in this country. We have seen, first of all, a major disruption in our cash and liquidity. We have, in other words, seen our cash resources challenged over the last couple of weeks, particularly, for a couple of reasons.
First of all, as some of you know, Colby was involved with 900 other institutions of private higher education and public education in this country in a money-market fund that was run by the Commonfund, an entity that was formed several decades ago to serve not-for-profit institutions with various investment vehicles. We were told by the Commonfund and the Wachovia Bank, which is the trustee of this fund, that they were closing it. And so, suddenly, what appeared to be a very liquid pool of operating assets—those things that we use to pay our bills in very much the way all of us as individuals pay our bills out of our checking and savings accounts—that fund was being closed and the assets being distributed in a very deliberate and rather slow way. We have received about 50 percent of those assets back from the Commonfund. We expect the rest to be returned eventually, but in the meantime we had a tremendous liquidity and cash crunch, which we have now pretty much resolved by working creatively with our endowment and other sources of cash. And so we do believe that for the rest of this academic year we’re going to be able to meet all of our fundamental obligations.
The other pressure point on cash and liquidity for us is the closing, very recently, of all of the credit markets that are normally available to us. Colby, like most not-for-profit institutions, borrows through a Maine bond authority, which is now completely frozen and there is no credit available to the institution through that traditional and customary source. Like any big organization we rely upon credit to do things like build new buildings and renovate existing buildings. That credit crunch is affecting us with regard to that traditional source of funding and will continue to affect us for some period of time into the future.
So there’s a lot of pressure on our cash positions and liquidity, and that’s causing us to be very, very careful about the way we spend money. But, as I say, right now it looks as though we’re going to be able to meet all of our fundamental commitments.
We’ve also seen—you won’t be surprised at this because you all look at your own statements (or actually maybe you don’t; I’ve been trying not to look at mine over the last several weeks)—but we have seen a very significant decline in our endowment value, which peaked about a year ago, a little more than a year ago, at $630 million. It’s hard to keep up with that endowment valuation, but we’re in excess of 25 percent in terms of the decline in the value of that. And we are continuing to look with a very worried mind at those declines and what they’re going to mean, especially for endowment spending in next year’s and following years’ budgets. We spend at a very conservative rate of about 4 percent of a five-year trailing average of the market value of that endowment. Needless to say, when you have a decline in valuation of the magnitude we’re looking at, we’re inevitably looking at some kind of constraint with respect to endowment spending, which provides 18 to 19 percent of all of our revenues. So, again, we’re very concerned about this. We don’t know quite how it’s going to play out, but we’re going to be very careful about preserving our most important commitments as we go forward.
We’re also concerned, finally, and I know all of you are too, about what is so euphemistically, in the news, called the real economy. That is to say what is going to happen with respect to a now much-anticipated recession. That’s going to raise questions for us about the comprehensive fee and what that’s going to be like next year. It’s also going to raise some very significant questions for us about financial aid and what happens to the needs of families in our financial aid program and what the financial aid budget will look like going forward.
As we contemplate these constraints, I think our priorities are pretty clear. We’re committed most fundamentally and primarily and energetically to the commitments we have to our current students, our faculty, and staff, and we’re very powerfully and emotionally committed to the financial aid program. As many of you know, we took an enormously important step last year—I was very proud of it at the time and I’m still very proud of it—to eliminate loans as a part of our financial aid packaging, which, for most students over a four-year period, will mean an additional over-$14,000 in grants coming from the College—an alleviation of the debt burden that was customarily a part of our financial aid packages. We want very much to continue our commitment to that enormously important step. At this point, we think we can do that.
But, beyond those fundamental priorities to existing students, faculty and staff, and to financial aid, we’re obviously going to face adjustments in the budget of the institution. We’re going to see a slowdown, for sure, in our ability to implement the strategic initiatives that we’ve been talking about and planning for years. Those new things, those new and exciting things that the College was intending to do—I’ll come back to a couple of those—we’re going to see a slowdown inevitably in the capital projects that we’re able to execute. As those of you know who’ve been here in the past several years, we’ve had a very aggressive facilities agenda. I think it’s been a wonderful program and we’ve done some wonderful things on the campus, but we’re going to see some constraints there. And we’re going to see some constraints in the operating budget in areas outside those fundamental priorities that I’ve already mentioned.
So that is the picture right now as we see it. I reminded the faculty as I met with them last week, and I’ve reminded people in written communications, that this picture is very dynamic. I think you have all been, as I have been, surprised by the rapidity of change over the last several months and by how unpredictable some of this news has been. So I’m very cautious in what I say about where we’re going, because we thought we’ve been certain before and we’ve been wrong. But this is the picture I see at the current time. And, as I say, it is one essentially of stability mixed with a certain obvious constraint.
Three weeks ago when I was contemplating what I might say today, or if I had been delivering this three weeks ago, I would have started in a very different way, and it’s with sharing some of the very good news that has been characteristic of this fall, particularly. Nowhere is that more obvious or important than in the news of the wonderful Class of 2012 that we’ve recruited to Colby in the most competitive admissions season we have ever seen at Colby: the largest applicant pool and arguably the most qualified applicant pool, from which we yielded a wonderful class of approximately 480 first-year students. I can tell you from the anecdotal information that I’ve received from faculty and staff, this is a very talented—not only a talented class, we knew that—but a very engaged and inquisitive and hard-working class as well, that came to us with wonderful qualifications. And it looks like those qualifications are being borne out in their performance here on the campus.
Those students have come to a place that is undergoing a lot of very dynamic and very interesting changes. I mentioned the financial aid program changes that were decided upon by the board last year, and this class, of course, along with our continuing students, are the first classes to benefit from that no-loan policy in financial aid. Our new students arrived on campus to a much-changed orientation program, which continues the wonderful tradition of COOT—the outdoor orientation program for Colby—but mixes that, and I think in a very interesting and promising way, with a much more vigorous attempt to introduce Colby students to Colby faculty and to introduce them to the challenges and opportunities of the academic program, something we’ve been talking about for a number of years and I think now we’re bringing that into being in a very handsome and interesting way. My congratulations to all of our faculty colleagues and to the Dean of Students Office for arranging a very stimulating program, which, in addition to an academic introduction or an introduction to the academic program, involves students immediately in some form of community connection—a community service program with the Waterville and the broader regional community.
Students also came to a campus that continues to be changed physically in important ways. I think many of you have had the experience of seeing the new bookstore, which completes the very dramatic renovations to Cotter Union. I think we now feel that we have a student union and a campus center that is meeting our programming needs and the needs and expectations of our students. We were able to complete two very dramatic renovations to the Roberts Row configuration of residence halls, and we are going to be dedicating this afternoon the wonderful, new, beautiful Harold Alfond Stadium, which was really a rebuilding of the entire football, track, and field venues here at the College—a facility that had reached the end of it’s useful life and which was supported by a wonderful gift from Harold Alfond, his last gift to the College and maybe his most significant gift ever.
Two other very important programmatic changes that greeted students coming back, both new students and continuing students: the very interesting and important strategic plan in student life called Colby 360, whose purpose is to reconnect, or to connect in more powerful ways, the living and learning that goes on at Colby, the social and residential experience of students, and their academic experience. Those programs are now rolling out in a very interesting and I think satisfying way, and I’m hoping that students will increasingly come to feel the impact of that Colby 360 design in the months and years to come.
We’ve also revitalized, under the very dynamic leadership of Roger Woolsey, our career services program in a new and very, I think, interesting approach called Colby Connect. If you haven’t been able to look at this or see any of its literature, I urge you to go to the Web site. We feel that we now have a much-improved and much more dynamic career services and Career Center offering. And that too is something, I think, that students are beginning to feel in very important ways.
Last but not least, we are engaged, as some of you know because some of you are involved, in a very important reflection on the role of alcohol in student social life here at Colby. This focus and this project was imagined last spring in the wake of a rather disappointing—would be a mild way of putting it—experience with the traditional champagne steps celebration that seniors have engaged in. The Board of Trustees following that experience charged me with bringing a close to that tradition but, more fundamentally and much more importantly, to revitalize and energize the conversation about the role of alcohol in student social life, which is such a vexing issue for us. We are not alone in this, of course. I think almost every college president and every college and university in the country struggles with this question. It’s generic to our endeavors, unfortunately, and haunts all of us, I think, who work in this profession. We’re trying to take a new approach to this. Jim Terhune and his colleagues are leading a very important task force to talk about the role of alcohol in student life and culture at Colby. Of course it involves, as you’d expect and as is obviously absolutely necessary, a very significant student voice and involvement. This discussion is just getting going, and we have many hopes for it. I also know how difficult this problem is, and so, even as we have hopes, we’re aware of the challenges that are before us. But it’s a very important conversation and one about which we will be speaking with both parents and alumni as time goes on and in ways that you will feel and understand.
Let me mention, finally, a couple of things that remain to do in the near and mid-term future that we’re still very committed to, notwithstanding the challenges financially that we face now. Whether we do them soon or a little bit further out, they remain, I think, things we’re very committed to, and I just want to mention a couple of them.
The faculty is now engaged, as some of you know, in a very comprehensive review of the curriculum and particularly that part of the curriculum devoted to the topic of general education—those things that we expect all students to be exposed to, the values and objectives we have for students across the liberal arts undergraduate curriculum, and the meaning of the liberal arts, really, as we practice it here at Colby. We started this process last year. There are some faculty reports due at the end of the calendar year, and there will certainly be some additional process after that. But I’m very hopeful that this will lead us to some very substantial changes in the general education program at Colby. We haven’t reviewed that program since the early 1990s. It was time to do it. I’m very gratified by the faculty energy that’s been committed to this, and I’m looking forward to knowing what they’re thinking and then, too, of course, sharing that more broadly with all of you.
The basic reference points in this study are, first and foremost, how well are we teaching the basic intellectual capacities that belong to the liberal arts experience—the ability to think creatively and critically, the ability to communicate in writing and orally, the ability to imagine, to project oneself out into the world, to intercept and understand other people’s lives, and the exposure to other cultures. All of those kinds of fundamental things that we believe are part of the liberal arts experience and the basic capacities that we aspire to convey and to solidify in our students in their time here with us.
We’re also very interested in the problem—the opportunity, I should say—of student engagement. How do we amplify student engagement in every possible way, from undergraduate research to internships to everything that connects students very powerfully in the classroom with things outside the classroom and that add energy and discipline to their classroom activities as well.
And last but not least, the third and final reference point of this review is the whole problem of assessment. How do we know that we’re producing what we say we’re producing in the undergraduate program? This is a subject of very intense interest in all the accrediting agencies that we deal with. It is a national conversation in higher education of some significance, and we’re trying to tackle it in our own review of the curriculum as well.
As we think about these very general opportunities in the academic program, we’re also continuing to try to understand places and ways in which Colby can be nearly peerless and distinctive with respect to the various things that it does. We have spent a lot of time recently talking about a couple of areas that are very important to us. One of them is environmental studies and the whole issue of sustainability. This is an area of intense interest to students where we have some real strength and additional opportunities that we’re eager to explore. We’re working on a broad vision statement for the environmental studies program and for the sustainability issues here at the College.
We also continue to ponder and work on the visual arts, which is a very significant part of what we do here and a very exciting part of what we do here. I will ask the Board of Trustees next week to approve resources that were already planned for next year’s budget to support the beginning of a film studies program here at Colby as a for-instance of the kinds of things we’re thinking about in the visual arts. I believe we’ll be able to go ahead with that, notwithstanding the challenges we face now.
Last but not least, I’ve started to engage in some very broad-ranging conversations with faculty in the humanities about the future of the humanities in this very interesting time in which we live, and particularly, I think at Colby, the opportunities we have in the languages and in cultural studies to again be a very distinctive presence in the undergraduate liberal arts universe.
Last but not least, we continue, perhaps with constrained ambitions and some delay in timing, with some very important elements of the campus master plan that we have been pursuing for a long time. We’re very close to concluding a planning process and design process for a new science facility. We are making wonderful progress on the museum master planning process that was required by the terms of the Lunder gift of art to the College for the expansion of the museum. And we are, I know this will be particularly pleasing to parents, working on a plan to completely reconstruct Mayflower Hill Drive. You will note that it is a different road today than it was last year. We took some intermediate steps once we concluded negotiations with the state and the city to take over control of that road, which we now own legally. We have done some intermediate remediation, or short-term interim remediation, on that road with the hope of reconstructing it rather completely over the next five years or so. So that is still very much on our minds, though, as I say, all of these things now are dependent upon our ability to fund those projects which may be quite significantly constrained in the short term at the very least.
All of these things I’ve mentioned have been made possible in great part because of the wonderful success of the Reaching the World campaign that Colby has been engaged in. We are now at about $320 million toward the final goal of $370 million dollars. We have raised $320 million in commitments. A wonderful achievement, a spectacular achievement for this institution, and I’m enormously grateful to many people sitting in this room—parents and alumni and alumnae alike—for the wonderful expressions of generosity that have come forward in the last number of years on that project.
We have a little bit left to travel—$50 million over the next 18 months. It keeps me awake a little bit at night, given the current circumstances. But it also underscores, in these times of stress, how important are these private sources of support to the College. They’re more important now than ever, I would argue, because there’s so much uncertainly around us. So I’m extraordinarily grateful to those of you who have participated in that, and I’m grateful to all of you for your wonderful support and interest in this terrific college.
Thank you very much.