Wellesley College details layoffs, retirements

Come on now. The colleges have the money and should be working to bolster the economy. Get the projects underway, do not lay off staff, be part of the solution. So your endowment (which you don't use) is lower????? Live with it; look at the crazy salaries paid to professors especially those that barely work and only lend their name???

How will this affect the new students? It is Wellesley's reputation that draws the best and brightest women, but if there is a staff cut, can these students expect the same standard of education?

Come on now, these colleges doing cutbacks are utterly rediculous! We have seen nothing short of tuition inflation over the past 10 yrs and to think that they need to lay folks off makes me think that this institution shouldn't be teaching our kids anything about finances.

Jim, from my memories during my 4 years at wellesley, I did not encounter any professors that just "lend their names" to the college. I've heard of professors that are actually horrible lecturers but nobody who doesn't teach anything, grade anything. wellesley is a not big university where professors are hired for research. I can understand where you are coming from were you comment directed at a large university where graduate students teach most of the introductory and intermediate courses. But not at Wellesley.

Wellesley is just jumping on the bandwagon along with the rest of corporate america. It creates a marketing spin image of itself as something great when deep down it is just a petty institution thats main objective is the bottom line. They don't really care about cutbacks of staff. Its all lip service. They are part of the problem not the solution.

They're taking to heart the Emmanuel doctrine: "Never let a good crisis go to waste."

Colleges and other non-profits are in a tough situation. Many private schools and colleges are seeing reduced spending by their major donors and reduced budgets handed down by their respective boards. As non-profits do not generate a profit year-to-year to supplement income in a down economy, raising revenue (i.e., tuition and fee hikes) and slashing costs are the only options left to them to close budget gaps.

A fiscally responsible institution cannot simply spend more of its endowment to cover a shortfall. An endowment is not a piggy bank, and cannot be thought of as a rainy-day fund. In fact, most endowment donations come with the stipulation that the money be invested in support of the institution's future, and so is legally inaccessible.

Any non-profit relies on private donations in addition to its endowment draw; those charitable donations are often the first to go in a down economy. Philanthropic gifts to non-profits are down across the board, and the institutions which rely on such gifts as a portion of their annual revenue must compensate somehow. When additional funds are not available, spending must be cut.

I sympathize with Wellesley's situation, and I'm sad that their position is such a desperate one. Cutting back staff and faculty is something of a desperation move, as Wellesley is fundamentally weakening their ability to offer the academic experience that is so valued by the higher education 'market.' They are risking their stature and their position as a prestigious institution if they are unable to weather these difficult times and come out of the storm as they entered it.

Did I miss something...have they lowered their tuition and fees? did they not get enough applicants? Doesn't seem like they have done anything to help the people the economy is hurting. How is this terrible economy hurting them?

I have a differernt persepective on Wellesley College. My daughter is a junior there; she has had nothing short of a tremendous and challenging educational experience there. This school has already presented her with opportunities that she would not likely have had elsewhere. They know how to educate and nurture bright young women who want to make important contributions to our world. They continue to make this type of education available to young women of all economic backgrounds. I can tell you for sure that my daughter would not be there, if not for the school's financial aid program.

So I have to strongly disagree with the tone of most of the posts here.

As a Wellesley alum, I have to strongly disagree with the tone of some of the posts. From my experience, Wellesley is incredibly generous with their financial aid and has a need-blind admission policy. The cost of educating each student is significantly more than the tuition and fees passed on to the student and her family. The economic downturn does have an impact on non-profit institutions like ACollegeStaffer posted. Making staff cuts, though very unfortunate, is the fiscally responsible thing to do to meet operating costs. The college needs be a viable institution in order to provide excellent educational experiences to its students. Lastly, I had never come across any professor who “barely work and only lend their name.” In fact, it was quite the opposite.

I would wager that those who are lambasting Wellesley College havn't a clue about how the college operates.

First, wellesley has a "needs blind" admissions policy -- that means, in essence, that the College is committed to charging the student and family only what they can reasonably afford, and the college will pick up the rest of the tuition tab.

Wellesley College is an arganization that want's to be able to continue to use the value of it's endowment to fund the educational quality that the students deserve. If you look over the FAQ linked from this news article, you will see that they are not going to be reducng the quality of the education. (by the way, at Wellesley, *all* members of the faculty *teach*. *All* members. Period.)

As for drawing down the endowment, if you do that too much you wind up eating the "seed corn." If you want the endowment accumulation to be able to fund the college activities and needs and stay solvent, you have to manage just how much you take from that endowment, and try as hard as possible to take no more from the endowment than what is earned by growth, after accounting for inflation. Again, look over the posting in the FAQ about the structure of where the money comes from, and how it is drawn from.

As one of the few remaining secular single-sex colleges in the nation, Wellesley offers a unique opportunity for women to get an education that is of extremly high quality, and a chance to live and learn on one of the most beautiful campusus in the country.

(and, no, "single-sxc college" does not mean that the students are all gay.)

Ivory Towers everywhere will tumble as a result of this economic downturn...

It's been a badge of honor for many years to spend an inordinately high
percentage of your tuition income on student financial aid among the more
prestigious private colleges. Bates was rated the "best value in America"
in a recent study because the percentage of students getting financial
aid was very high. $40k a year, and it's considered a great value because
they'll help you pay for it. They do it out of a pool of tuition money, and not
much else, as the endowment is growing but small. That model works in a
sustained period of economic expansion, but when the pendulum swings
back, the hit to the operating budget is severe. Can't speak for Wellesley, but
I would not be surprised to hear it is this very type of situation.

I would assume that their endowment is used like Harvard's endowment and they use the interest every year to pay the staff's salaries. So if the lose 25% or so of the endowment that is a lot less money lying around to pay staff. Also they are worried about what economists are saying about the economy and they don't want to pay money out of that endowment until they have a chance to make some back when the market rebounds.

Obviously many of you do not understand the issues with endowments. There is a law in MA and other that states you cannot sell assets in your endowment if they are worth less than when the gift was given (a story in the Brandeis school paper in early March discussed this law). In light of the fact that stocks are at 10+ year lows and in the case of commonly gifted stocks like GE, GM, F, C and others prices that have not been seen since 20, 30 and even 50 years, any gifts made within this timeframe are forzen and cannot be used. Since schools rely on their endowments to bridge the gap between the cost of runnign the school and tuition, such a legal lock on endowmnet assets certainly puts a damper on their flexibility.

I applaud the thoughtful and transparent way that Wellesley has handled this. The college has gone to great lengths to engage the campus community, explain why these difficult decisions have been made, solicit ideas, and explore alternatives (such as early retirement packages) that are generous in this climate. Wellesley offers a model for how other organizations--nonprofit and for-profit alike--should deal with severe economic challenges.

I am loving what this downturn is doing to colleges everywhere.

In 2008, Harvard reported 10% growth and 3.9 billion more in their endowment. How come windfall profits were only reported in the oil industry?

Why does tuition go up faster than inflation? Why does housing go up faster than the cost of living increases? Are universities really not for profit?

Clearly not. The ivory towers who continually lambaste corporate America (while training their employees, btw) clearly operate under the same criteria save one thing:at least corporations admit their all about the bottom line.

Take a look at the president's office, is she getting rid of any of her administrative staff?

Having worked for both corporations and non-profits, I can safely say the wasteful spending and unsound business decisions at non-profits is astounding. If they actually earned their money instead of having it 'gifted', there would be less mismanagement of their assets. An example being the priceless painting that was thrown out during Wellesley College's museum revovation and not discoved until last fall. Some employees may have been promoted after that one!

"Some employees may have been promoted after that one!"

DB, do you have evidence for such a statement? Otherwise, it's just inflammatory

Susan, as I said and you quoted, I used the word MAY, not FACT. My statement and opinion was not intended to be inflammatory, as you suggest, but rather to illustrate how non-profits foster mismanagement by rewarding incompetent behavior.