October 23, 2008
Dear Students, Faculty and Staff:
Although fiscally and operationally strong, Smith College is not immune to the economic challenges facing every sector of our economy. At the October meeting of Smith’s board of trustees, we focused much of our discussion on the consequences that the economic crisis could have for the college and how to assure Smith’s strength and financial resilience. It is clear that we will need to carefully review and prioritize our operations. At the same time, Smith’s trustees underscored their commitment to a vibrant and competitive future for the college, urging that we move forward with the vision of educational excellence put forth in our strategic plan, The Smith Design for Learning.
Smith has entered this downturn in an economically robust position. We began with a generous endowment, thanks to the investment of generations of alumnae and friends. We have some financial reserves that can be tapped to mitigate the effect of the downturn in the short term to allow for some deliberation in planning. We had already begun contingency planning; we are fortunate that we can take some time to be thoughtful about this process. Our strategic planning over the last several years has given us a good foundation for understanding institutional priorities in which we should invest even as might seek to reduce commitments to other areas. And we are part of a longstanding consortium of institutions with experience in finding opportunities for collaboration.
At the same time, like other colleges and universities, we are entering a period of difficult and challenging choices. Returns on our endowment through mid-October indicate a 20 percent drop in value. Difficulties in the markets affect not only Smith’s endowment, which provides one-third of our budget, but also the financial circumstances of our students and families. Moreover, we will undoubtedly face new tests in fund raising.
To respond to these challenges, we will take four immediate steps to strengthen Smith’s fiscal position:
As we go forward, we will need to make tough decisions about how we use our resources and set priorities. While urging careful choices over the short- and long-term, Smith’s board also noted the potential opportunity in making bold decisions during times of retraction. In the days and months ahead, I look forward to engaging the major campus committees, as well as the Smith community at large, in discussions informed by that spirit and vision.
Carol T. Christ