Public Statements

Financial Planning Update

April 27, 2020

Dear Colleagues,

We have entered a new phase in our response to the COVID-19 pandemic. For the past six weeks, most of our efforts have centered on responding to the emergency immediately before us. With all the energy, talent, and dedication we have come to expect from our community, we shuttered our campus, moved to remote instruction, shifted our student support services and engagement activities online, reinvented our admission and fundraising processes, and answered countless queries from all corners of our community.

Now we must focus on the months ahead. It is too early to predict with any confidence what the fall will bring, but we must plan for a wide range of possible outcomes, from an on-time, on-campus start to a semester or more of remote instruction. Those different scenarios pose starkly different challenges for the delivery of our academic program, and we will find opportunities to discuss with you in the days ahead some possible approaches to those challenges.

For the moment, we write to address the possible financial consequences of different scenarios. We entered this crisis in a strong position, with healthy reserves, a substantial endowment, and a supportive board and alumni body. As a result, we have so far been able to avoid some of the austerity measures implemented at many other colleges.

As noted in my April 2 message to the community, however, we may face a possible perfect storm if we cannot resume on-campus instruction in the fall. Unlike 2008, when enrollment and tuition revenues were stable even though endowment draws and fundraising were dropping, this fall could see significant declines in all three of our primary revenue streams.

In the best-case scenario — on-campus instruction with full enrollment in the fall — we can anticipate a significant but manageable financial challenge, driven by transition costs incurred this spring, an expected increase in financial aid costs, and expected decreases in endowment payouts and philanthropic support. That is why we are already cutting non-essential expenditures, carefully managing the FY20 budget as we near the end of the fiscal year, and studying the financial impact of different scenarios by varying our assumptions about enrollment, tuition, endowment draws, fundraising, and expenses.

If we cannot resume instruction on campus this fall, we will have to consider some of the measures already taken elsewhere, including furloughs and layoffs, additional spending cuts, salary reductions, and suspending contributions to employee retirement plans. We recognize the burden such measures would impose on Hamilton’s employees. In a struggling economy, cutting employment should and would be a measure of last resort.

At this point, we do not see a need for such measures. Accordingly, the College will continue paying all benefits-eligible employees according to their normal schedule through the end of the fiscal year, June 30.

As we approach that date, we should be in a much better position to assess the likely impact of the pandemic on College operations and to determine what further spending reductions, if any, may be required. One step we think will probably prove necessary is a suspension of most pay increases for the coming academic year. We will make a decision on that option in the next few weeks.

Even as we contemplate the future, most of our traditional responsibilities continue — remotely for most and on campus for a few employees performing essential functions. We are grateful to all of you, especially those who are putting in hours far beyond what you would normally work. We know everyone is as eager to return to campus as we are to have you back.

New York State has indicated that its PAUSE mandate will continue at least until May 15. Thereafter, we expect a phased approach to resuming business operations. Since it seems likely some social distancing measures will continue well beyond May, the College has reluctantly canceled most summer programs, including our summer picnics.

We know this remains a time of great uncertainty and that many of you have questions for us. We hope you can join us tomorrow for the staff town hall at 9 a.m. and the faculty town hall at 4:10 p.m. We look forward to seeing you then, if only virtually, and to sharing further information with you. We welcome your questions, and we will do our best to answer them. If you are unable to join the live events, please feel free to email us or any member of senior staff with your questions.

David Wippman and Karen Leach