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Fall 2020 Financial Update, September 1, 2020

Dear staff, faculty and students:

In the weeks since we announced the decision to pivot to an all-remote fall semester, we have been hard at work in two critically important areas: preparing to deliver an effective and engaging Smith experience virtually, and fostering community engagement while most members of our community are not on campus. It is hard to find the words to express our gratitude to the staff and faculty who have worked tirelessly this summer with one goal: to deliver an outstanding academic experience to the 2,250 students who have enrolled for the fall semester. Everyone’s job changed in significant ways last March and through the summer; yet this community rose to the challenge time and time again with equanimity.

Importantly, we have also been hard at work analyzing the budgetary impacts of an all-remote fall semester. In keeping with our commitment to open and timely communication during this pandemic, we write to update you on our financial planning.

From previous letters, you know that the decision to send students home in mid-March required the college to close a gap of $27M in our 2020–21 budget. We achieved that savings through a variety of actions: reductions to departmental budgets, a hiring freeze, the elimination of planned salary increases, summer furloughs for some staff, voluntary salary reductions by the Cabinet and a slowing of capital spending. We also drew on $5M in strategic reserves.

With the recent decision to deliver all fall instruction remotely, we have an additional budget gap to close. The good news is that more students than we expected have chosen to enroll for the fall. This speaks volumes about how much students want to study with our talented and dedicated faculty. Still, because most students won’t be on campus, we will experience revenue losses for the fall in the range of $8M–14M.

To address this budget gap, we will be working with our elected governance groups: Faculty Council, Staff Council, the Advisory Committee on Resource Allocation (ACRA) and the Committee on Mission and Priorities (CMP). Underlying all of our conversations will be a commitment to prioritize the work and resources that are essential for delivering on our core academic mission, including the strategic plan Toward Racial Justice at Smith College, which we shared in July.

As was the case last spring, closing the budget gap will likely require a combination of actions. These will include further reductions to departmental operating budgets, some of which can be easily achieved by removing funds that cannot be used right now, such as those designated for catering, travel and conferences. We will also utilize some strategic reserves, as we did in the spring. In addition, with the support of the trustees, we have decided to issue debt, a prudent alternative to drawing on our endowment, given that interest rates are exceptionally low right now. In addition to providing budget flexibility, debt funding could also support some of our planned efforts to reduce our carbon footprint through new approaches to campus-wide heating and cooling such as geothermal heat exchange. Please note that any use of debt funds will require trustee approval.

Beyond these actions, we need to look at how to align staffing with available work, given the dramatic reduction in students in residence. The hiring freeze will remain in place, and a number of employee furloughs will be enacted or extended. Cabinet members will be making staffing decisions soon, and we recognize the lack of job certainty for some members of the staff is a heavy burden to bear. We will do our very best to support staff who are furloughed; for example, all employees will retain their health insurance while on furlough, and, importantly, the college will cover the entire cost of the employee’s contribution. Additional furlough decisions will be communicated to employees in mid-September.

Some of you have expressed interest in taking voluntary actions in support of the college, such as early retirement. The Office of Human Resources will be distributing information to all employees eligible for a new early retirement program.

We recognize that we have conveyed a great deal of information in this letter and know you will have questions. Please plan to join us for an all-employee meeting from 2 to 3:15 p.m. on Wednesday, September 2, via Zoom. A Google calendar invitation will follow shortly. We know it is a busy time of year, so those of you who will not be able to attend may watch the recording afterward. You are also welcome to send questions to

There is so much we are facing as a community and a country—a pandemic, a racial reckoning that calls upon us all to take action and an upcoming presidential election that has divided the nation. More than ever, we need to rely on one another for support and strength. Together, we will work to sustain our community. Together, we will face uncertainty with ingenuity and optimism. Together, we will find the good that always surrounds us.


Kathleen McCartney

David DeSwert
Vice President for Finance and Administration

Prior financial messages for reference

May 20

April 20

April 3

March 13