Go to content, skip over navigation

Sections

More Pages

Go to content, skip over visible header bar
Home News Features Arts & Entertainment Sports OpinionAbout Contact Advertise

Note about Unsupported Devices:

You seem to be browsing on a screen size, browser, or device that this website cannot support. Some things might look and act a little weird.

College braces for “significant economic impact” of coronavirus crisis

Administrators delay construction projects and accommodate slowing donations

March 27, 2020

As the coronavirus pandemic continues to roil global financial markets, colleges and universities around the United States are entering uncharted economic waters.

In Brunswick, Bowdoin is battening down the hatches.

“It is really too soon to know how severe the impact will be or how this compares with economic challenges of the past, but there is no question that this is a very difficult environment for investments,” wrote Matt Orlando, the senior vice president for finance and administration and treasurer of the College, in an email to the Orient. “[T]here is no doubt that this will have a significant impact on College finances, as it will for all sectors of the economy.”

Orlando did not provide up-to-date figures for the losses to the College’s endowment, which was valued at $1.74 billion in June 2019. However, based on public market indexes, it is likely that the College’s endowment, which is invested in over 1,700 individually-managed funds, has experienced sizable losses in the past two weeks.

On March 18, Moody’s Investor Services, a trusted credit rating agency, downgraded its financial outlook for institutions of higher education from “stable” to “poor,” citing steep decreases to revenue streams and potentially devastating rates of deficit spending.

Although the size and diversity of Bowdoin’s investment profile places it on relatively sturdy financial footing, the College has taken a number of measures to mitigate the effects of the financial downturn.

In an email to students on March 17, President Clayton Rose announced that the College has delayed construction on Mills Hall and the Center for Arctic Studies indefinitely. Both projects were set to break ground on March 19. The ongoing construction of the new Harpswell Apartments and renovations to the Schiller Coastal Studies Center will be completed on schedule, according to Rose.

According to Orlando, the College will be unable to set a new timeline for the delayed projects until the public health and financial crises resolve. The delay is expected to affect future construction projects as well, including a planned renovation of Sills Hall that was set to begin in the summer of 2021.

“The timing of the Sills Hall renovation is inextricably linked to the completion of Mills Hall,” said Orlando. “We cannot take Sills Hall offline without the added classroom capacity of Mills Hall.”

Orlando said that he has yet to determine the ways that the losses will affect the College’s operating budget for next year and beyond—including whether those cuts will entail laying off employees.

“We’re just beginning to dig into how to assess the financial impacts and challenges,” wrote Orlando. “Our priority is to maintain the excellence of what we do at Bowdoin and to preserve jobs, and that’s what will guide us.”

For fiscal year 2019-20, roughly 35 percent of the College’s $175.8 million operating budget was drawn from returns on the endowment.

The ongoing financial crisis has also slowed fundraising efforts for the College’s recently-announced $500 million capital campaign, which entered its public phase on February 6. As of March 24, the campaign had raised $331.5 million—up roughly $30.5 million from the campaign’s launch event in February.

“The only thing that’s changed about the campaign so far is the level of gift and pledge activity, which is slower,” wrote Scott Meikeljohn, senior vice president for development and alumni relations, in an email to the Orient.

The development office has also suspended fundraising efforts that require any travel.

“We have hit the ‘Pause’ button on most (but not all) conversations that have to do with multi-year commitments,” Meikeljohn wrote.

As of now, the College is still expecting to meet its $500 million goal by June of 2024, though the development office would consider extending its timeline if the crisis worsens.

“[It] remains to be seen if we will need to adjust,” Meikeljohn wrote.

Despite the slowing rate of donations, Meikeljohn said a number of existing donors have accelerated their scheduled pledge payments to financial aid and other essential campaign priorities, and 125 donors have contributed to a fund devoted to underwriting the significant cost of moving students off campus and transitioning to online classes. The Alumni Fund, an annual fundraising effort, is also ahead of the benchmark set in 2019.

“One of the best parts of every day has been the incoming messages of support, concern for Bowdoin students and offers of help from many, many alumni, parents and others connected to Bowdoin,” Meikeljohn wrote. “That sort of underlying care and connection says a lot about what Bowdoin is.”

Editor’s Note, 3/27/2020 at 9:45 p.m.: The original version of this article incorrectly stated that the capital campaign had raised $10.5 million since its public launch. The article has been updated with the correct figure. 

Comments

Before submitting a comment, please review our comment policy. Some key points from the policy:

  • No hate speech, profanity, disrespectful or threatening comments.
  • No personal attacks on reporters.
  • Comments must be under 200 words.
  • You are strongly encouraged to use a real name or identifier ("Class of '92").
  • Any comments made with an email address that does not belong to you will get removed.