Emerson President Jacqueline Liebergott announced budget reallocation, increased financial aid for struggling families and a cap on new personnel positions in a speech and conversation with faculty and students about the college's financial status on Dec. 9.
Liebergott said the college's endowment has been hit by recent turmoil in global financial markets, but that Emerson's immediate fiscal outlook is brighter than those at other universities. The endowment, which was valued in June 2008 at about $89.7 million, has depreciated to $82 million, or eight percent in five months, Liebergott said.
By comparison, Harvard University announced a hiring and salary freeze also on Dec. 9, after announcing a 22 percent drop in its multi-billion dollar endowment last week. Tufts University also announced a major endowment loss.
"We have further reduced our risk of loss in today's chaotic economy by following a very conservative investment strategy," she said.
The college has not invested in the "highly risky investment instruments" like swaps or collateralized debt, two popular but dangerous investment techniques which helped lead to the wider recession, she said.
Emerson is currently waiting on $8 million to be released from Commonfund, a company that manages colleges' and universities' short term cash expenses.
After part of Emerson's money was temporarily frozen in September, the college had already withdrawn about half of its stake. The remaining cash is expected to be released by December 2010.
Only two percent of the budget is funded by investment income, Liebergott said. The majority comes from student tuition and room and board fees.
Some colleges, like Harvard, invest enormous sums of money in securities tied to the stock market's performance. Emerson does not.
Liebergott also announced the college plans to transfer $500,000 from this year's budget to the financial aid pool to help students this year and next.
Major construction projects at the Paramount Center and Colonial Building will move forward as planned, but smaller summer renovation efforts will be cut.
"I am pleased to report that the financial condition of Emerson College remains sound despite the economic downturn," Liebergott said. "If we maintain our strong enrollment profile, and I am optimistic that we will, we can weather the economic storm with minimal disruption by tightening our belts and continuing to act prudently."
No new academic, administrative or staff positions will be created, she said. "Exceptions will be granted on a case-by-case basis for positions that are deemed to be both mission-critical and time-sensitive."
The budget of the current fiscal year is $137.5 million, with approximately 55 percent being put toward instruction, academic support and student services; 17 percent toward financial aid and 28 percent toward institutional support and housing, Liebergott said. Last year's budget was $130 million.
Approval for next year's budget will come in October 2009. Liebergott said she does not anticipate any significant increases or decreases in the budget.
In response to a iBeacon/i reporter's question after the speech, Emerson Vice President of Administration and Finance David Ellis said a total of $1 million will eventually be added to the financial aid pool.
"We are very well positioned," Ellis said.