With national investments at an all-time low and a shrinking college endowment, Mills College has been hustling to keep the institution running.
“We’re not in a crisis,” said President Janet Holmgren, in a community meeting Feb. 4; however, the College has adjusted the way the institution will run in order to maximize financial efficiency.
Endowment and fundraising
This Mills endowment has declined 35 percent in the last 18 months, which is a problem because the payout from the endowment account for 20 percent of the College’s operating budget, said Holmgren.
Reported once every quarter, the College endowment was $233 million in June 2007. It reduced to $155 million by December 2008, according to Executive Vice President Ramon Torrecilha.
Torrecilha manages the Office of Institutional Advancement (OIA), the department in charge of fundraising and alumnae relations. He said that even though Mills has strong donor support, some are wary of investing.
“Given what’s happening with the economy, some donors say this is not a good time to have a commitment,” he said.
He pointed out the current stock market troubles. The Dow Jones indicator, which computes the average stock prices of the top 30 U.S. companies, is under 7,000. Normally placed at 14,000, this is the lowest stock market rating in over a decade, according to a March 2 Reuters article.
Despite these problems, the College has enough endowment and cash funds to carry the institution for 12 to 18 months, according to Holmgren’s Jan. 27 memo.
Holmgren mentioned that the College gets funds from gifts and has been on a “fundraising overdrive.”
By Feb. 4, the College met its fundraising quota of $15 million for the 2009 fiscal year. A fiscal year runs from July 1 to June 30.
As of early March, Mills has raised close to $22 million, according to Torrecilha.
Cuts to the operational budget
At a Feb. 4 meeting with the Mills community, Holmgren said that various departments made $1 million in cuts to the current 2009 fiscal year’s operating budget.
Vice President for Finance LaDene Diamond explained that each department cut a certain percentage of the operating budget. This percentage was based on the amount of funds each department had available.
For instance, the music department cut 11 percent of their operating budget. According to Fred Frith, head of the music department, this percentage was common for academic departments.
Some offices, like OIA and Admissions, received more lenient cuts, according to Torrecilha.
He said this was done for strategic reasons.
“If you have a department that generates funds, it doesn’t make sense to cut it too much,” he said. “Funds may go down.”
Torrecilha and Diamond said they did not have the figures for what percentage of the budget each department cut, nor did they release the percentages their own departments cut.
Academic departments did their part by cutting under-enrolled classes, according to Frith and Cynthia Scheinberg, head of the English department.
OIA reduced the amount of traveling their department engaged in and tried to reduce the materials used.
“For instance, if we have two brochures, we might combine them to be one,” Torrecilha said.
Holmgren also said that the College will decrease salary fluxuations. There will be no across the board salary increases or any reductions. This has been Frith and Scheinberg’s experience.
The hiring freeze
While Holmgren said the College will not force staff and faculty members to leave, the College has a hiring freeze in place.
A hiring freeze means that once a person has left their position at Mills, the College will keep that position open for as long as they can, according to Diamond.
By holding these positions, Mills saves five percent on salary costs, she said.
Holmgren first mentioned that the hiring freeze was in place in her Nov. 17 memo to the Mills community.
Sometimes another staff member may take on open position’s duties, but if the College deems the job important enough, they will hire a replacement, according to Diamond.
For instance, Mills recently hired a new public safety officer. “It’s an issue of life and safety, so it’s important,” she said.
Other positions that are placed in high priority include positions that deal with funds, according to Diamond. Positions that tend to be kept open include administrative positions.
However, this is not an exact science. The English department recently got a replacement administrative assistant, Jess Heaney.
OIA has three open positions, two of which would help with major gifts to the College. Major gifts are a significant means by which the College gets money, according to Torrecilha.
Diamond said that she does not know how many staff positions were filled or vacated since the hiring freeze began.
College officers remain optimistic about Mills despite the financial climate.
“Mills has survived for 150 years; I’m sure we’ll be around for