From: Michael S. Roth and Andy Tanaka
Subject: Update on Financial Impact of COVID-19
Date: May 26, 2020
Following an initial April message, we held a virtual forum to elaborate on and discuss the financial impact of COVID-19 on our University. While we could not answer every question as specifically as we might have liked given the uncertainties of the unfolding situation, your questions have been—and continue to be—invaluable in helping us maintain and advance our important work. Please keep them coming!
We write to you today with an update on several areas. As you know, our budget depends on three major sources of revenue: enrollment, fundraising and the endowment. The news from Admission is encouraging: more students have said “yes to Wes” by the May 1 deadline than at the same point last year from an exceptionally competitive and diverse applicant pool, and we are excited to welcome them to what we hope will be a fully residential experience in the fall. During the initial phase of our pandemic response, our Advancement colleagues focused on supporting the University’s most vulnerable populations by leveraging the Emergency Fund and our alumni network to secure donations and supplies for those in need. As Advancement begins to reengage in their broader fundraising efforts and as we continue to monitor volatile financial markets, we must keep in mind that we won’t know the full effects of the pandemic on fundraising and our endowment for some time and so we must project challenging times ahead in order to be fully prepared.
On Friday, May 22, we presented the Board of Trustees with a budget built on a residential model for the fall semester and a number of assumptions: (1) some attrition in enrollment due to pandemic-related concerns and restrictions; (2) a fundraising deficit; (3) an increase in financial need. The measures we have already proactively put in place—freezes in compensation, hiring and major maintenance, and the 10% budget reductions from all Cabinet members—offset these variances. If these assumptions hold, we will have a balanced budget. However, any additional fluctuation in enrollment will create the need for further adjustments, as will any necessary changes to that fully residential model.
Because compensation costs comprise over half of our current operating budget, it is an area we will need to consider if we are forced to make significant additional adjustments. No further decisions on University-wide staffing will be made until July, when Wesleyan will announce our final plans for in-person, blended, or online education this fall.
To end on a high note, Commencement is always a time to be reminded of the importance and impact of our work. In addition to congratulating the mighty Class of 2020, we want to thank all faculty and staff who have worked so well to keep the University on track and make our virtual graduation successful. Despite the past and continuing challenges posed by this pandemic, we should take great pride in our efforts, our creativity, and our resilience. We will do what it takes to ensure Wesleyan’s success next year and in all the years that follow, just as we always have.
Michael S. Roth