Union College has three sources of revenue that support the budget: the comprehensive fee, endowment income, and gifts to the Annual Fund. The comprehensive fee is 74% of the budget while the endowment income is 14% and the Annual Fund, which is made up of gifts from alumni, contributes 3%. Bookstore, Dining Services, and other miscellaneous sources make up the remaining 9% of the budget.
At its peak, the endowment contributed 15% to the budget. However, the economic recession has played a major role in the increase in the comprehensive fee because the endowment and Annual Fund cannot contribute as much to the budget as it once did. The endowment dropped approximately $100 million from its high of $400 million in 2008 and the number of gifts to the Annual Fund has also decreased.
Like many other liberal arts schools, Union is currently attempting to determine if there is a fourth source of revenue available to the institution. Recently, Middlebury College in Vermont announced that it is investing $4 million for a 40% share in "Middlebury Interactive Languages," an online language program for students Kindergarten through 12th grade. Middlebury is hoping that the computer software will provide a fourth revenue stream to support the College's liberal arts-style of teaching.
"We wanted to do something about the fact that not enough American students are learning other languages, and it's harder for students if they don't learn language until college," Middlebury President Ronald D. Liebowitz said in an interview with a writer from the New York Times on April 13, 2010. "It is also my belief, and I think our board's belief, that finding potential new sources of revenue is not a bad thing. By doing what we're doing with this venture, we hope to take some stress off our three traditional sources of revenue- fees, endowment and donations."
While Union's administration and Planning and Priorities Committee are planning to determine if there is another way to bring in revenue, they do not want to compromise the reputation of the college.
"We don't want to do something for the sake of money," Blake said. "It has to relate to the school. We have to do things that make sense for Union."
Even though Union is looking outside of the box for new sources of revenue, the college is continuing to keep a close eye on the budget to determine whether cuts can be made.
This process has been ongoing since the 2008-2009 academic year, when each Vice President was asked to determine where they could make a 5% cost reduction to see how the cut would affect the College. While the Vice Presidents didn't make 5% cuts across the board, some departments made more cuts than others.
Moreover, even though the college is not instituting a hiring freeze, departments are undergoing a review process to determine how each can deliver services more efficiently. However, the college would like to undergo "growth by substitution," meaning that when a position opens, the college can opt not to fill every position and use the additional money for new creative projects and initiatives.
However, as Union prepares for future budgets, the institution is mindful of its competitors.
"Union is in an academic arms race," Blake said. "We are a very elite school and have a high ranking and an impressive peer list. We are keeping an eye on what other [schools] are offering since we don't want to be at a competitive disadvantage."
While Union is navigating itself through increasing costs of goods and labor as well as an economic recession, Blake believes that the situation is improving.
"The situation is not dire since we are constantly looking ahead," Blake said. "We are taking actions so problems aren't exacerbated."
Originally published in Union's Concordy on May 13, 2010.
Posts
