Eight years ago, the University began a plan to increase the size of its faculty, build new facilities and strengthen the endowment, all funded by the largest capital campaign in Brown's history. But as the $1.4 billion Campaign for Academic Enrichment nears its end, new economic challenges have forced administrators to adapt in ways not many would have anticipated just a few years ago.
Amid layoffs, cutbacks and a projected $800 million loss in the endowment, it is easy to wonder how Brown will move forward. But University officials said they see this challenging time as an opportunity to improve and raise the University's caliber.
The endowment, which as of last fall stood at $2.8 billion, is expected to hold only $2 billion by the end of the month. The frequency of donations and pledges has also decreased by 15 percent, according to Ronald Vanden Dorpel MA'71, senior vice president for University advancement.
"Next year is going to be a tough year," said Beppie Huidekoper, executive vice president for finance and administration. More budget reductions will be coming, she added.
But Brown's finances are a "bit more stable now," Huidekoper said, adding that administrators are "cautiously optimistic" that the University will be able to maintain its "most critical priorities" over the next five years, including financial aid, the quality of the faculty and adequate facilities and infrastructure.
Administrators are working to find ways to shrink costs given expensive policies — such as the boosted financial aid policy and smaller increases in tuition. The economy has also made more families eligible for aid than in the past.
In November, President Ruth Simmons announced a hiring freeze of staff and administrators, a halt in the expansion of the Graduate School and a moratorium on salary increases.
Expecting to slash $60 million in planned budget increases by 2014, Simmons also said that University administrators would be assessing capital projects to determine which renovation, technology, infrastructure and construction projects could be deferred or delayed entirely.
But a few months later, as the economy continued to falter, Simmons' plan for budget cuts did not seem to be enough.
The Corporation, the University's highest governing body, met in February to discuss Brown's financial future. Deepening the cuts Simmons initially predicted, the Corporation decided to reduce the University's budget by $90 million over the next five years, an additional $30 million more than Simmons' recommendation, by delaying major capital projects and eliminating salary increases for most faculty and staff.
The Corporation also approved a $6 million budget deduction for the 2010 fiscal year.
Brown will have to make "sacrifices" to decrease its budget, Huidekoper said. There will be a leaner administration, frozen salaries for faculty and staff and compromises on new facilities.
Difficult times
While Brown's endowment has taken a serious hit, the University is well prepared to face the weakened economy, Huidekoper said.
"Brown hasn't had to do what some other universities have had to do — borrowing externally to make payroll," she said. "That's both through generally a more conservative approach to our cash management and just generally being ahead of the game."
Administrators worked last spring to add liquidity to the University's investment portfolio, Huidekoper said, adding that this had helped Brown weather the economic storm.
Still, Brown will continue to lose the money that will no longer appreciate in the endowment, said Dick Spies, executive vice president for planning and senior adviser to the president.
"Now that the economy looks better, even if it bounced back fairly quickly, we still have this very significant setback that occurred between September and February that we will have to live with," Spies said.
To help reduce the financial burden on the University, officials have deferred, modified and cut several planned capital projects.
The Mind Brain Behavior building, slated to hold several science related departments, will now be housed in a renovated building instead of the site of the Urban Environmental Lab on Angell Street.
The planned Medical Education building, which was to be funded in part by a $100 million gift that renamed the medical school, will also be placed in an existing building instead of a new construction site. Renovations of Faunce House, a new Creative Arts Center and an upgraded data center will move forward as planned.
"We have been very actively looking at what we can do with less," Huidekoper said.
The University will also scale back its plans for the Nelson Fitness Center and a new swimming pool — considering more cost-effective methods such as combining the two projects.
The University has so far raised $27 million for the $42 million Mind Brain Behavior building and $13 million against a goal of $42 million for the Medical Education building, according to Vanden Dorpel.
After receiving an anonymous gift for the Aquatics Center, the University has raised $22.4 million against its goal of $25 million.
Spies said the University's commitment to continuing capital projects shows the long-term value of the Plan for Academic Enrichment — Simmons' wide-ranging blueprint for improving the University.
"With an economic crisis — needing to make heavy cuts — the first instinct is to say we can't spend money on (capital projects)," Spies said. But "the Plan says even in the most difficult times we need to find a way to move forward on those goals."
‘New strategies'
"The worst thing to do in a crisis like this is to hunker down and do nothing," Spies said. "If you do it for two or three or four years, opportunities don't come back. You just have to move forward."
Dean of the Faculty Rajiv Vohra P'07 said he expects to continue growing the faculty, even if at a slower pace. "I am expecting faculty searches will be going on," he said. "I'm pretty confident we will be doing searches, I just don't know how many."
Brown added nearly 100 faculty positions to the faculty over the last six years.
The University was naturally reaching "the end of the bigger expansion" and consequently planned for modest growth for this academic year, Vohra said.
The University kept open its planned 45 searches to fill faculty positions, Vohra said, adding that Brown is ahead of many of its peer universities who suspended faculty searches following the economic downturn.
"When other institutions are not hiring it stands to reason that it's a particularly good time to hire," he said.
Decisions regarding the number of faculty searches made for the next academic year will be made in the summer, Vohra said.
The University's capital campaign will reach its goal of raising $1.4 billion by December 2010, Vanden Dorpel said. The capital campaign has raised $1.347 billion so far, he added.
But University fundraisers have had to learn to adapt to the poor economic climate. "We're using some new strategies," Vanden Dorpel said. "We're adding more challenge gifts — matching programs."
As fundraisers receive more "negative" responses during a period of economic downturn, the capital campaign has increased its activity level by adding extra mailings, phone calls and visits, Vanden Dorpel said. "When we pull out of this recession, people who are prospects will be mindful of our efforts and they will remember us and stick with us."
