Dear Members of the Colgate Community,
On behalf of the Board of Trustees, I write to provide you with a summary of the May 2, 2020, Board meeting. Our meeting was held in an online format at an extraordinary time for Colgate and the world. Before reporting on board actions, I want to acknowledge the remarkable effort by our faculty and staff during the past several weeks. Faculty retooled hundreds of courses for remote instruction. Since January, the 55 members of Colgate’s Emergency Operations Center helped steer the University’s COVID-19 response in operations and logistics. Many of you worked from home while homeschooling your children. The campus community cared for the approximately 250 students who stayed on campus. And faculty and administrators are now planning a robust academic year for 2020–21. The Board thanks the entire Colgate community for taking such great care of our students and our community and being so thoughtful about our future.
The Board began the year with momentum and excitement to continue the work set forth in The Third-Century Plan. While the COVID-19 pandemic has no doubt affected the pace at which we will achieve our ambitious goals, the Plan continues to guide our future. In fact, the Plan and the guiding principles underlying it have formed the basis for the Board to establish priorities for Colgate at this uncertain time. Below, I report that, despite the current crisis, we continue to move forward with key elements of the plan.
Unlike past Board meetings that included committee meetings, we spent our entire time meeting as a full board. The May 2 meeting focused on the University’s ongoing response to the COVID-19 pandemic and the plan forward to the 2020–2021 academic and fiscal year. After a summary of the response since March 13, when students left campus, the Board reviewed the fiscal implications of the emergency on the current year’s operating budget. Conservative operational practices established more than a decade ago ensured that Colgate’s cash management could withstand the sudden shock to the final months of the fiscal year. This means that the institution continues to meet all of its obligations with substantial cushion; it also had enough liquidity to provide a 50% refund on room and board charges to our students.
The refunds of room and board and additional technology costs to move hundreds of courses online created a potential deficit of approximately $8–$10 million for the current academic year. Thankfully, on-campus efforts at cost savings and the structural surplus that we had built into the budget will allow the closing of this operating budget gap without drastic action. The Board thanks all faculty and staff for their efforts to help ensure that FY2020–21 operating budget will not be burdened with a deficit.
The Board also received updates on the University’s endowment. I am happy to report that Colgate’s endowment has withstood well the financial shock of the past few months with manageable declines. The endowment reached an all-time high of $959 million at the end of January. In February, when equity markets started to see significant declines, the endowment performed very well with a decline of only 2% compared to the S&P, which lost more than 8%. In March, the endowment declined about 6% as compared to the S&P with a decline of more than 12%. For the first quarter, the endowment declined to a value of $872 million, which was an investment decline of 8%. The S&P declined by 19% in the first quarter. From peak to the trough, which occurred mid-March, the S&P lost more than 33% compared to University endowment losses of approximately 10%. The Board is very pleased with the management and performance of our endowment, which continues to produce very strong risk-adjusted outcomes.
The Board then considered plans for FY2020–21 — specifically, the return to classroom teaching and the budget implications for various scenarios. Dean of the Faculty Tracey Hucks and Associate Dean Lesleigh Cushing informed the Board about the developing academic plan, and the Board appreciated the thoughtfulness in creating a plan that mitigated against many risks and conditions that are currently not known. The Board acknowledged that the current plan calls for instruction to commence in late August but accounts for multiple potentialities, including a return to normal instruction in August, or, if circumstances do not fully permit that, partial remote instruction in the fall or to a return to normal classroom instruction in the spring. The plan’s commitment to ensuring the continuation of a full Colgate educational experience from off-campus study programs, student research, and FSEMs are principles as is the commitment to ensuring students could progress toward degree completion. Our clear desire, in service of our mission and our strengths, is to return to normal in-person operations as swiftly as circumstances and safety permit, and Colgate is working diligently to achieve this. The Board thanks the faculty for their thoughtful deliberations and planning work.
The academic plan feeds directly into the FY2020–21 operating budget. Senior Vice President JS Hope then presented potential budget scenarios, given this plan and other factors, which are still very uncertain. The Board is, however, aware that many variables in the current budget likely will change in the coming weeks and months. We are planning a special meeting of the Board in July, when more factors are certain. The Board commends the administration for its continual modeling, thus preparing for multiple eventualities and thoughtful, well-informed decision making.
The Board reviewed a new model for capital planning, which focused on high-priority projects not requiring significant or new resources (Hamilton Housing, Collection Annex, Frank Dining Hall, and Chenango Nursery School) and projects that will require meaningful investment over the near-term and that align with the goals of The Third-Century Plan (Olin Hall renovation, Gatehouse replacement, Dana renovation, and Broad Street planning). Other projects, such as new buildings in the Middle Campus and the development of West Campus, will resume when resources are available. Again, the Plan provided guidance in making these shifts to the capital planning.
Among its formal actions, the Board was pleased to establish four new endowed faculty chairs:
- Daniel C. Benton ’80 Endowed Chair in Arts, Creativity, and Innovation
- Rebecca C. Chopp Chair in the Humanities
- Carl Benton Straub ’58 Endowed Chair in Culture and Environment
- W. Bradford Wiley Chair in International Economics Endowed Fund II
The creation of these endowed positions demonstrates that, despite the current crisis, work of The Third-Century Plan continues.
The Board will welcome two new members, JP Conte ’85 and Eric Andersen ’87, P '16, '23, '23 in the fall, and approved the addition of Gretchen Burke ’81, P’11,’20 as a board vice chair, with responsibility for oversight of the campaign. The Board meeting acknowledged three retiring trustees: Dan Benton ’80, P’10, H’10; Christine Chao ’86; and Leroy Cody ’71. Between them, they represent 36 years of dedicated and exemplary service to Colgate. While we will miss them on the Board, we look forward to their continued engagement and leadership on the Emeriti Council.
Finally, and with great pleasure, the Board is pleased to announce that President Brian W. Casey’s contract has been extended for five years by a unanimous and enthusiastic vote of the Board. At this critical moment in history, it is important to have his steady and caring leadership continue. Brian’s love for this University and his dynamic leadership have served Colgate well, and they will serve us well for many years to come.
As mentioned numerous times above, the Board is immensely grateful to the administration, faculty, and staff, who have worked tirelessly to help Colgate not only weather the current crisis but also prepare for an uncertain future. This is not the first time Colgate has been tested; it survived world wars, the Depression, and numerous economic crises. At each of these inflection points, Colgate emerged stronger, though changed. The coming months and year will challenge us in ways unknown, and I have faith in the Colgate community to see us through the uncertainty.
Take care, stay safe, and be well.
Mike Herling, ’79, P’08,’09,’12