<p>This email was sent out yesterday to the student body. My daughter forwarded it to me. The bad news is the endowment has taken quite a hit. The good news is "The College will adhere fully to its current financial aid policies for all students presently enrolled as well as for those admitted for the Class of 2013."</p>
<p>To: The Swarthmore Community
From: Alfred H. Bloom, President
Re: Current financial circumstances</p>
<hr>
<p>As you are all aware our nation and world face what may be the most
dramatic decline in financial assets in recent times. Unfortunately the
College has not been immune from the effects of this decline.</p>
<p>Swarthmore has benefited from a continuing tradition of generous
philanthropy and has over the years enjoyed exceptional investment
success. The College has as well held prudently to a conservative spending
rate on its endowment during years of excellent return so that it would be
well positioned in years of disappointing performance. It has also
maintained a 15% allocation of the endowment to U.S. Treasury securities
to support the budget and to avoid having to sell equities during periods
of market weakness. This history and these measures have placed the
College in a relatively strong position today.</p>
<p>Nevertheless, the almost 30% decline in the endowment from its June 30
value of $1.4 billion to its current value of about $1 billion has been
much steeper than anyone anticipated. If the endowment remains at its
current level or declines further and we continue to spend at our current
level, we would soon start to erode the financial foundation of the
College's future. Moreover, until a turnaround takes place we can expect
a reduction in philanthropic support and an increase in the cost of
meeting the demonstrated financial need of our students. These
conditions, coupled with the distinct possibility of a protracted
recession ahead and uncertainty over when an eventual financial turnaround
may take place, make it essential to plan for, and move prudently towards,
a significantly more constrained budgetary environment.</p>
<p>This past weekend the Board of Managers discussed the situation fully. We
have together decided on the following measured courses of action:</p>
<p>1) Effective immediately, the College will pull back from all
non-essential construction work, refrain from initiating any new programs,
and stringently evaluate any faculty or staff hiring.</p>
<p>2) In developing the annual budget for 2009-10 to be submitted to the
Board of Managers in February, we will shape recommendations on
enrollment, tuition and fees, and compensation in ways sensitive to the
financial environment and set guidelines on spending across departments
that ensure tighter management of our resources.</p>
<p>3) Over the coming semester we will develop a contingency plan for more
significant reductions in the budget, which the College will begin to
implement, if by this time next year the College's financial situation has
not improved.</p>
<p>The College will adhere fully to its current financial aid policies for
all students presently enrolled as well as for those admitted for the
Class of 2013.</p>
<p>It is very sobering to consider that this community, which makes such
careful, constructive, and creative use of its resources, might have to
adapt to a more constrained financial environment. But in these very
exceptional times, we must take care to conserve for the future the
resources that past generations of Swarthmoreans have so carefully
conserved for us. I am confident that by maintaining educational quality
and regard for the people who make up this remarkable community as our
priorities, we will weather this environment with the distinctive
excellence of this college undiminished.</p>