September 2, 2009
Catharine Bond Hill
Welcome to fall convocation. Of the two convocations that mark the start and end of the academic year, today’s is the one that in many ways looks more to the future – forward to the work and rewards that define us as a community – the work that takes place in the classrooms, laboratories, libraries, athletic venues, studios, galleries, and in the community – the essential and rewarding work of education, more specifically, a liberal arts education.
A special welcome to the yet-unnamed, but very impressive, class of 2010. Not every class has or needs a name, but some of you are well aware that it is impossible to refer to the class of ’74 without calling it the “legendary” class of ’74 – and not without some justification as Vassar’s first fully coeducational class. This reference has come up particularly often since Bill Plapinger of the legendary class of ’74 was elected chair of the Board of Trustees. In response, at Commencement last year, senior class president Luis Hoyos in his remarks declared that the class of 2009 would henceforth be known as the “ultimate” class of 2009. It remains to be seen if the name sticks, but I think its adhesiveness is somewhat weakened by it having been declared on the very day the class was leaving campus in May.
So my challenge to the class of 2010 is to think about how you would like to be remembered, whether that can be captured in a word or not. I have a certain vested interest in this since your are, after all, the class that arrived at the same time I did – I feel like part of your class and will always think of you as my class – we have shared the same experiences – many of your impressions are my impressions too – much of what challenged you challenged me – and we continue together this year to work to fulfill Vassar’s promise.
A special welcome as well to the newest class – the class of 2013. Your future at Vassar is completely ahead of you so I won’t challenge you with anything more specific than to get yourselves settled in and focused. I am confident of your ability to do that and to go on to succeed in remarkable ways. We know already that you are smart, ambitious, talented and interesting, and in that way you will fit right in with other Vassar students. What sets you apart to some extent is that you are Vassar’s most diverse class ever – by almost any measure of diversity. This in part reflects the increasing diversity of the US population, but it also reflects a concerted effort and commitment at Vassar to make it financially possible for any qualified applicant to attend. That commitment is foundational as well as financial – a statement about what Vassar stands for.
Questions of the future have certainly captured my attention recently. One reason for this is that part of my summer reading included Thomas Friedman’s Hot, Flat and Crowded, which as the title straightforwardly says, concerns three challenging and interrelated global trends:
hot: climate change,
flat: economic globalization,
crowded: population growth – particularly the growth of the middle class and the implications of that growth on demand for scarce resources.
Friedman describes the development and potentially devastating consequences of these trends, and then proposes a solution, which is for the US to take the lead in a radical transformation to a green economy. Easier said than done, of course. In advocating this solution he certainly does not minimize the difficulty of creating the political will necessary to achieve it. He understands that we are facing these problems (particularly climate change) as a result of not recognizing (or at least not being willing to act on the recognition) that the long-term consequences are catastrophic. In some ways, such as a loss of biodiversity, they are simply irreversible. The practices that have gotten us to this point – plentiful and cheap carbon based energy coupled with the delay in understanding the global consequences of using such energy – have put us at significant risk. In short, the planet is facing a crisis because the consequences of these trends have developed slowly, which makes them easy for decision makers to ignore until it may be too late to address the consequences.
I could not help but think about this in the context of my primary responsibility – the leadership of this wonderful college. And those thoughts included at least two threads. The thread more directly linked is what we do at Vassar in relation to the specific problems Friedman talks about. I certainly think that we as a community have made a concerted effort to address aspects of these issues through programs that reduce energy consumption, recycle waste, and control the use of resources. Often what we are able to do feels like it isn’t enough because we are such a small player in the larger world system. On the other hand, if an important part of the long-term solution is to educate leaders who will have the awareness, skills, imagination and commitment to transform that larger system – then I think Vassar can feel very good about that contribution. Our faculty speaker today is an outstanding example of the effectiveness and influence possible through innovative academic programs, and through personal example and leadership.
The other thread that linked to Vassar in my mind is the more general awareness of the future consequences of present behavior. This in some ways is how Vassar needs to think about its response to the consequences of the global financial crisis, the most immediate aspect of which is the decline of the stock market and its impact on our endowment – an endowment that is by any reasonable measure substantial – not as large as the wealthiest of our peers, but among the top dozen of the over 250 liberal arts colleges in the country.
The reputed excellence of an institution – and I want to be careful here to not get into a discussion of just exactly how excellence should be measured – the reputed excellence of an institution is positively related with the size of its endowment per student. And if an endowment is being used wisely, that correlation extends to particular objective measures of excellence as well. Wealthier institutions have greater resources and greater resources can and are used to build the programs able to support an outstanding faculty and staff, offer a rich curriculum, and provide a physical and intellectual environment that facilitates teaching and learning.
Colleges use a percentage of their endowments for annual operating expenses – a percentage that in normal times is less than the growth in the endowment through investments and additional donations. In this sense, an endowment is operated as a kind of renewable resource, designed to provide support indefinitely. However, with a decline in endowments, that resource is not only not being renewed, it is being consumed, and with it, its future value. Generally speaking, the larger the endowment, the more an institution depends on it, so it is precisely the wealthier institutions that are having to make the most significant adjustments in response to the financial crisis. This has led to a certain curious – but quite understandable – situation where some colleges recently have almost boasted that they have so small an endowment that they are largely unaffected by the economic downturn. I doubt many of these schools would hesitate to trade places with us, however.
But even though the less-well-endowed colleges still face difficult challenges as a result of the economic environment, it has largely been the case that the headlines about the responses of colleges and universities have concerned the responses at the institutions with the largest endowments – Harvard, Yale, Wellesley, Brandeis, and others. Such institutions get a great deal of attention by virtue of their prominence, but in this case the attention is warranted because of how dramatically they have had to respond. Some of these wealthiest institutions were also invested in ways that required them to act quickly, further compounding their difficulties.
Historically, Vassar has been able to rely on its endowment for approximately one-third of its annual operating expenses, so we have definitely been in the situation of needing to adjust to our endowment decline. But we have had a couple of things going for us in moderating the size and speed of that adjustment. The first is that the endowment has been invested in a way that hasn’t created the additional problems experienced by some of the larger endowments, and the second is that Vassar’s Board of Trustees has been willing to allow us to spend from the endowment to make the necessary adjustments over a period of a couple of years. In doing so the Board has been sensitive to how Vassar traditionally operates – all trustees are Vassar alums or Vassar parents or both – including lawyers, business people, leaders in many areas – but all are deeply aware that Vassar's response has to be grounded in Vassar's principles and the principles of an educational institution, and not necessarily on the principles of whatever business they work in otherwise. Thus we are, in fact, doing in part what is sometimes proposed as a complete solution, which is simply to use more of the endowment to cover ongoing expenses. Our Board of Trustees recognizes that its primary responsibility is to ensure the long-term financial health of the college, and with it its continued excellence. This commitment to Vassar’s excellence today and in the future – a commitment I believe we all share – is why we have placed sharp limits on simply spending down the endowment as a part of the solution.
The additional endowment draw has, however, allowed us to respond to the financial pressures we face with more careful planning and widespread input – not as leisurely as we are used to acting as a deliberative body of shared governance, but in a way that allows for consultation with Vassar’s various constituents and with information about consequences of making adjustments in our spending. This process was well underway last year with campus-wide meetings and communications as well as discussions within the relevant committees and the creation of additional task forces to advise on the allocation of resources. Planning has continued during the summer and some measures have been implemented. Additional measures will follow, as will the kinds of communication and exchanges that those of you who were here last year are aware of. The all-campus email sent earlier today is the latest example. I also want to announce that members of the Board of Trustees will be on campus on September 13 and will hold a meeting for all students – a meeting scheduled in recognition that most students had already left campus when a similar meeting was held for the entire community in conjunction with the last meeting of the Board of Trustees in May before Commencement.
Specifics details of our ongoing plans will be announced as they are finalized, but let me conclude by addressing two points that I know are important to all of us.
First, as has already been the case, some of the adjustments that we have made and that we need to make will be difficult and will have consequences for programs, services, and – most painfully of all – members of our community. In an institution of our size, when we make changes in the way we spend our resources and the way we do things, it has some impact on all of us. This is not to say that there were no opportunities for greater efficiencies in some areas, but I understand fully the concern when those involved in affected programs, or who rely on the services of those programs, are faced with changes, especially potential loss of employment. To the extent possible, we are using retirement incentives and vacancies to achieve savings in compensation. But these mechanisms may not bring us to the necessary level of savings. The reality is that because compensation accounts for two-thirds of our operating budget, it necessarily has to be one of our sources of savings as we take the steps necessary to stabilize our finances.
Some of the decisions that we are making involve hard choices – and this brings me to the second point. As we make the choices that are necessary to address these difficult financial times, and face together the consequences of those choices, I hope that we will always do so in an atmosphere of understanding and respect, and through discussions that are true to the highest standards of the institution. Our plans and decisions are being made with awareness and sensitivity to the values that define us as a community – first and foremost of which is our mission to provide our students the best possible liberal arts education. Important aspects of that education and the environment in which it takes place are:
These qualities and principles are in the most fundamental way the foundation of what we do. They are core values that, like the endowment, need to be vigilantly preserved and not allowed to erode. But, more than that, the sustainability of the excellence of Vassar College requires us not just to preserve these principles but to renew them in every possible way. These are the values and qualities that have brought all of us to Vassar – and they are the values and aspirations that guide us as we work to sustain and strengthen this remarkable college.
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