At its Sept. 26 meeting, the College’s Board of Managers took new steps in an ongoing effort to bring Swarthmore’s future spending in line with expectations of future income. Although the College will still need to reduce its overall budget significantly, the message from the Board—shared with the campus community in an e-mail from President Rebecca Chopp—indicated that the impact of the decline in its endowment may be ameliorated as the economy and equity markets recover.

The Board agreed on an $8 million adjustment—little more than half the $15 million projected at the end of last year—to be implemented in a phased combination of spending cuts and revenue increases during the next few fiscal years.

“It’s a testament to our investment office and the investment and finance committees of the Board that we have recovered so well in this economy,” said Chopp, noting that many of the College’s peers have suffered endowment losses of up to 30 percent. Swarthmore’s endowment was down 16.8 percent from its peak of $1.441 billion in summer 2007 to $1.129 billion at the end of June 2009.

In December 2008, when the scale of the global economic downturn became evident, the Board had assumed that a 30 percent decline in the value of the College’s endowment, when coupled with an anticipated increase in financial aid needs, would require a budget adjustment of $15 million.

An Ad Hoc Financial Planning Group, comprising faculty, staff, senior administrators, and Board members, began to develop a series of recommendations to revise the College’s future budgets accordingly. In the immediate first phase of reductions, they trimmed the 2009–2010 budget by freezing faculty and staff salaries, cutting most departmental operating budgets, and deferring capital building projects.

The Board gave the Ad Hoc group one year to develop a plan, guided by principles designed to protect the College’s core values, including maintaining academic excellence and concern for the well-being of each member of the community. The Ad Hoc group has encouraged suggestions during open meetings and through its Web site.

Every College administrative and academic department scrutinized expenditures, and new revenue-generating ideas, including targeted fundraising for such fundamental programs as financial aid, have been included in the planning process.

Acknowledging the significant contributions of the on-campus community, Chopp said, “Careful spending of departmental budgets, widespread participation in the financial planning process; and faculty, staff, and student acceptance of salary and pay-rate freezes have all been crucial elements in the first phase of our response to these challenges.”

Chopp continued, “If the positive economic environment persists, we hope to lift the salary freeze for next year, and we also hope to continue to avoid layoffs.”

The new $8 million goal “will allow us to continue to implement what is necessary to balance the budget while sustaining the academic excellence that is the heart of our mission,” Chopp wrote.

The $8 million in budget adjustments will be reflected in the plan being developed by the Ad Hoc Group in consultation with all campus stakeholders at a series of meetings this fall. The group’s plan will be flexible enough to adapt up or down, depending on external market conditions. Recognizing the instability of equity markets, the group will also append the more comprehensive $15 million plan to its December report to the Board.

Of her first three months of work with the College community, Chopp said: “It has been tremendously gratifying to witness firsthand the graceful way that this community works collaboratively and vigorously to maintain its core values. And we are all, of course, indebted to the ongoing support of our alumni, parents, and friends. We have never needed their support more.”