Standing Strong In A Weak Economy

August 31, 2009

No one, it seems, is unaffected by the current state of the economy. While some forecasters say the worst of the economic recession is over, the lingering impact of foreclosures, bankruptcies, layoffs and business closings continues to affect institutions and individuals across the nation and around the globe.

Higher education has also been impacted. From the Ivies to the Pac 10, colleges and universities are furloughing faculty and staff, cutting back on academic and other programs, and deferring maintenance of their facilities and grounds. The recession has reduced the value of most university endowments, in some cases considerably. As state legislatures grapple with far less tax revenue and greater demand for resources, public colleges and universities are being forced to take drastic measures to reduce spending. 

In contrast, Baylor is bucking national norms in higher education and continuing to move forward. By national standards, the University is faring remarkably well. Of course Baylor has not been immune to the effects of the downturn in the economy; the endowment has slipped since its peak last year, and Baylor accepted more students than usual to ensure that the University would reach its enrollment goals for the incoming freshman class. But due to a combination of sound business practices, the continued generosity of alumni and other supporters, and the desirability of a Baylor education among prospective students and their families, progress at Baylor has been largely unimpeded, and the University is continuing on an upward trajectory.

With strong enrollment projections for Fall 2009, not only are no layoffs forecasted, the University has added faculty and staff in areas of greatest need, and new degree programs and other projects have begun.

"I am pleased to report that the financial status of Baylor is relatively stable, and we are continuing to move forward in achieving the imperatives of Baylor 2012," Interim President Dr. David E. Garland says. "We have faithful alumni and other supporters, and our faculty and staff are responsible stewards of the resources entrusted to them.

"While we have seen some effects of the recession, we have not been hit as hard as many other universities. People want to be a part of something that is important and that is successful, and each success we achieve is leading to more success. We have our challenges, but overwhelmingly, people want to be connected to Baylor University, and we are blessed because they do."

Financial stability means that the quality of a Baylor University education remains as high as ever, Interim Provost Dr. Elizabeth Davis says.

"A strong financial position allows us to keep our promise--the promise we make to deliver a quality educational experience in a Christian setting," Davis says. "Baylor students haven't seen a disruption in services because we have been able to continue to create an environment where learning can flourish."

New degree plans added during the year have been thoughtfully developed to enhance that learning environment, leveraging areas of existing academic strength to address emerging areas of societal need. Baylor's School of Engineering and Computer Science added a new bachelor of science degree to allow Computer Science Fellows--intellectually gifted and highly motivated students with a wide range of interests--to design individualized courses of study across the disciplines. A master of public health degree with specialization in community health education in the School of Education will better prepare students for faith-based public health service. Baylor's Hankamer School of Business also began offering its first Ph.D.--a doctoral degree program in information systems--designed to train future researchers, scholars and teachers to analyze and understand the impact of information and communications technologies on individuals, organizations and society.

And though Baylor's endowment portfolio has been affected by market downturns, Vice President for Finance and Administration Dr. Reagan Ramsower believes that when the endowment value is publicly reported in the fall, the results will rank the endowment's performance at least in the top quartile as compared to other university endowments nationwide.

"A strongly diversified investment strategy has helped shield Baylor endowment returns from drastic fluctuations," Ramsower says. "We know the overall value will decrease, but the performance of our endowment will position us favorably in comparison to our peers in the annual National Association of College and University Business Officers endowment survey," which is released each January.

Ramsower also cites the University's money management practices. "We budget conservatively, and three times a year, we look at where we can reallocate the budget to help advance University objectives and address emerging opportunities." This ongoing practice--known as Summer, Fall and Spring Review--enables budget savings across Baylor to be reassigned to support university priorities, programs and services.

"During every review period for the past several years, we have been able to reallocate some resources, and this past year was no exception," Ramsower says. In the most recent Summer Review, for example, new staff positions were approved in geology, art and enrollment management, among others, while initiatives to improve security and accessibility in several areas of the campus were approved.

If sound resource management is the mark of strength on the spending side of Baylor's financial ledger, on the other side a successful fundraising program has ensured the influx of new capital to support continued University growth and development. Here again, Baylor compares favorably with other universities nationally in the volume of gifts and donations it has received during this difficult economic season, says Dr. Dennis Prescott, vice president for university development.

"The survey of Voluntary Support of Education measures actual gifts received--not pledges or deferred donations--and nationwide, giving is down 4 percent. At Baylor, our voluntary support of education report shows we are actually up by 3 percent over last year.

"In particular, this increase is due to our alumni," Prescott says. "Sizable gifts from several alumni families were realized this year, and we are extremely grateful for their support."

One area where support is always needed: scholarships. "Our alumni and other friends historically have been strong scholarship donors, and we need them now more than ever," Prescott says. "As more families are hit hard by the recession, we know students will need scholarship support to attend Baylor. We are always working to build our scholarship pool, and the entire Baylor family deeply appreciates donors who provide scholarship support for our students."

Such support is especially important as the attractiveness of a high quality Baylor education and experience accounts for record numbers of applications from students across the economic spectrum. In 2009, Baylor saw more than 31,000 applications from prospective new students for the fall 2009 semester--a historically high number, Ramsower says. Last fall, just under 3,100 new freshmen entered Baylor--the second largest freshman class in the school's history--and Ramsower expects this year's class to be at or above the same number when school begins. Not surprisingly, demand for financial aid is keeping pace.

"We remain true to our mission and vision as a Christian university that offers outstanding academic programs at a reasonable price, and we know that is what so many students and their parents are looking for," Ramsower says. "The perceived value of a Baylor education--the combination of cost and the academic experience we deliver--has earned us recognition as a best value in the major college guides such as Kiplinger's and Fiske. We believe that the addition of a Christian commitment, coupled with competitive aid packages, makes us a very special and very desirable option for prospective students and their families."