Times have changed since January 2009 when the Blue Tarp Committee anticipated a zero percent rate of return on the endowment, suggested increasing the incoming class size to bring in revenue and advocated that the College not lay off any employees. According to President Barry Mills, the College expects a seven percent rate of return on the endowment, did not admit additional students to the Class of 2013 and has laid off four employees.
The result? Secure finances for the College.
"We are well positioned for the next couple of years," said Mills.
Mills attributed this security to good financial management and an improving stock market. While the College does not release figures on the endowment's growth until the end of the year, Mills believes that it is safe to expect that it will earn greater than a seven percent rate of return.
"In our budget models we expected that our budget would earn zero percent this year... So [the endowment's growth] is going to help us quite a bit," said Mills.
At the start of the recession, Mills made a proposal to increase the size of the student body by admitting an additional average of 10 students per year over five years. In a January 2009 letter to the community, Mills wrote that the extra students would be a "reliable source of additional revenue."
However, no additional students were admitted in the Class of 2013. According to Mills, the size of the campus has grown by fifty students in one year as a result of fewer students electing to study abroad during the 2009-2010 school year than in previous years. The trend will continue next year with a similarly reduced number of students planning to study abroad.
Four people lost their jobs at Bowdoin as a result of the recession, all of them last month. According to Mills, four members of the Development Office, which handles alumni giving, were laid off. Mills said that the Development Office grew in conjunction with the recent capital campaign. The combination of the poor economy and the end of the campaign created a situation where the office did not require the same staff levels, according to Mills.
"This was Bill Torrey's decision," said Mills. "I supported his decision, but nobody mandated it." He stressed that "there is no intention to do any further layoffs."
In terms of alumni giving, Mills says that "at this point we're lower than we want to be, but that doesn't say much." Typically most contributions to the College are made in June, at the end of the fiscal year (FY).
"I fully expect to meet out target" said Mills.
The comprehensive fee increase will also bring revenue to the College. The increase to the fee will be voted on at the May meeting of the Board of Trustees.
"Over the last 10 years we've raised the comprehensive fee five percent or close to five percent," said Mills. This year, however, Mills believes the increase will be somewhat smaller.
"I'm highly confident that it will be less than five [percent]" he said. Mils noted that most of Bowdoin's peer schools increase their comprehensive fee by between three and five percent annually.
One way in which the College set out to trim costs at the onset of the economic crisis was by freezing the salaries of faculty and staff who make over $40,000 a year. The freeze is set to stay in effect for another year and is expected to save the College $4 million.
"Basically everyone's done the same thing [on faculty salaries]," said Mills of Bowdoin's peer schools. According to Mills, there was some fear that if other schools continued to raise faculty salaries during the recession, Bowdoin's average faculty salary, which is used in many College rankings, would dip below competitor schools. These fears proved to be unfounded.
Mills predicted that Bowdoin's faculty and staff will start receiving annual salary increases again starting in 2012. Though the figure is still uncertain, Mills said that the increase will likely be around six percent.
"I don't know if the number is too low," he said. "It may be too high"
Mills asked all departments to reduce expenditures early on in the recession. By the end of the 2010 FY, Senior Vice President for Finance and Administration & Treasurer Catherine Longley predicts the College will have saved $1.3 million. According to Director of Finance & Campus Service Delwin Wilson, these savings represent a five percent reduction in the total operating budgets for traveling, conferences, meal supplies and contracted services.
Further actions that were taken to save money included reductions in the use of heating. For the first time, students staying on campus during the Winter and Spring Breaks were moved to specific residences so that the College could significantly reduce heating use in the other residential buildings. Figures on how much money this saved the College were unavailable.
Bowdoin's bond rating, which determines the cost for the College to borrow money, has stayed steady throughout the recession. Moody's Investors Service gives Bowdoin's bonds an Aa2 rating, which means that they consider them "a very low credit risk." Longley said that "[Moody's is] unlikely to do a new report unless the College's finances change a lot" and continued that "we are not planning on issuing a lot of new debt in the foreseeable future."
Mills was generally optimistic about the security of the College's finances.
"There are storm clouds out there, and we have to worry that the economy could turn bad. But right now we are stable," he said.