We Should Spend Our Endowments

A college staff member urges leaders of wealthy institutions -- in this exceptional moment -- to share their resources to help their communities.

April 27, 2020
 
istock.com/erhui1979
 

Dear college and university presidents, Boards of Trustees, and regents,

It is time to think beyond your institutions.

I work in a staff role at a small liberal arts college in the Northeast. Like all of our peers, we have been hit hard by the current pandemic. Spring and summer classes are being conducted remotely, summer research is up in the air, and even fall classes may be affected. So far, we’ve been lucky in terms of the health of our community. We’ve had a few cases of COVID-19, but, thankfully, no fatalities.

And, of course, the budget is out the window. While no layoffs or furloughs have been announced, our administration has been candid that nothing is off the table as our institution scrambles to navigate these rough waters. But, of course, that’s not really true. Some things are off the table.

Our college is fortunate to have a fairly strong endowment. We aren’t in the billion-dollar club, but the endowment is substantial and a key factor in the college’s routinely solid fiscal ratings. That said, even in the best of times, money is allocated carefully, and choices often have to be made. Our president and Board of Trustees have promised the college community that the endowment, as a prized asset, will be preserved at all costs to be available in the future when we are beyond the current crisis.

I am sure that similar messages are being communicated on campuses all across the United States, and, under normal circumstances, it is a sound line of reasoning. But these are not normal times, and I would like to respectfully ask those presidents, Boards of Trustees and regents who are charged with financial oversight of their institutions to reconsider what they are and are not willing to cut.

To be clear: I have an ax to grind here. I am an employee of my college, and I’d like to remain one. But this isn’t just about my job. The COVID-19 pandemic is without question the biggest event in our lifetimes, doubtless on par with World War II and the Great Depression in terms of social disruption. It is bad now, and it is likely to get worse. Much worse. There will be books -- and even doctoral theses -- written on what’s happening right now.

But when they look back, those historians will not be asking how carefully institutional endowments were stewarded through these dark economic times. They will be asking, who did something?

Our endowment will mean nothing if the community around the college collapses. If ever there was a time to raid the endowment to keep people employed, it is now. College employees can’t spend salaries they don’t have in their community. If ever there was a reason to start that huge building project, the one that keeps getting put off in the name of careful fiscal planning, it is now. The money the college borrows or pulls from endowment will mean jobs when jobs are desperately needed. If ever there was a time to forgive student debt and extend financial aid, it is now. Students spend money, not just on campus, but in the surrounding community.

All of this economic activity is vital to our community, as it doubtless is in every community that is home to a college or university.

Small businesses don’t have the kind of fiscal cushion that many colleges and universities do. A restaurant owner whose restaurant is empty has no choice but to begin laying off employees. Colleges don’t necessarily have to do that. I said layoffs had not happened at our school, but that is not really true. While no direct employees of the college have been laid off, food services are outsourced, and a significant number of those workers have been laid off. One presumes they are home now, collecting unemployment and not spending one penny more than they absolutely have to.

Economic stagnation leads to more economic stagnation leads to economic collapse.

My college, again like so many academic institutions, prides itself on its community engagement. Pages of our website are dedicated to this aspect of our school. We have programs that put the energy of our students and faculty to the use of our city; we build courses around community learning, and we engage with local groups and organizations at all levels.

But how deep is that engagement? If we are as engaged as we claim to be, shouldn’t we be asking more than how to save the college? Shouldn’t we be asking how to save our community?

There is no question, raiding the endowment is not in the immediate best interest of our college. Our endowment has already taken a big hit. In the next few years, it’s going to look bad. It will take years to recover, but it will. And in 50 or 100 years -- and, like all our peer institutions, we fully expect to be around in 100 years -- that dip in our endowment will not matter. It won’t even be remembered. What will be remembered is whether our institution rose to the occasion or pulled back into itself, raising the drawbridge, pulling up the ladder and confirming once again that the town/gown divide never went away despite all the programs and classes and grand intentions.

Now is not the time to be fiscally prudent. Now is not the time to think of institutional health in 20 years or 50 years. Now is the time to think about now. U.S. colleges and universities are traditionally bastions of liberalism, full of progressive-minded people who believe in shared responsibility and shared resources. If ever there was a time to share the resources that we as institutions of higher learning have managed to accumulate, it is now.

Respectfully,

One of your staff

Bio

The author works at an independent college with a sizable endowment.

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