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Washington and Lee University

Washington and Lee University

Letter to the Community Regarding the Economic Crisis

from President Ruscio, November 2008

In the midst of these turbulent, uncertain financial times, Washington and Lee’s Board of Trustees held its fall meeting last week when we conducted our normal business but also held thoughtful discussions about the impact of the global crisis on the University’s current and future planning, operations and financial status.

While none of us can predict with certainty what the state of the economy will be in the coming months, we can assure all members of the Washington and Lee family that we are monitoring the situation carefully and are determined to protect the quality of the University’s educational enterprise.

Colleges and universities across the country have seen a significant impact on their endowments. We are not an exception, but the University has benefitted from strong investment management, which has placed our endowment in the top 25 percent of college and university endowment performance over both short and long terms. During the last several months, that strong management has enabled W&L to experience relatively lower losses than some of our peers. Since June 30, the University’s endowment has declined between 15 percent and 20 percent, though the extreme volatility in the markets makes these numbers fluctuate considerably from day to day, let alone from week to week.

Importantly, our Trustees have shown wisdom and foresight by establishing reserves over the past several years. These reserves are designed to mitigate the impact of times like these. As a consequence of these prudent decisions, we are better positioned to weather this economic storm. But in order to take advantage of our position, we must examine our discretionary spending carefully for the coming year and prepare for some reductions in such spending in 2009-2010. We will review capital plans going forward and will limit capital investment to either those projects with fully supported funding sources or those that must be done to maintain the integrity and safety of facilities and programs. We will evaluate positions to ensure that vacancies or allocation of funds to new positions are targeted toward meeting the University’s strategic objectives.

As part of our planning in this unpredictable environment, we must also develop a series of models that will allow us to make adjustments as changing circumstances warrant.

Throughout this period, it is important to emphasize that our core commitments are unchanged:

  • We are committed to continue pursuing our strategic plan and those initiatives that were identified as institutional priorities for 2008-2009 — Academic Renewal, Work/Life Initiative, Advancing Our Strategic Plan, Sustainability, and Accreditation. The details of these priorities are available on our Web site. Developments in the economy may affect how quickly we meet some of the goals, but we remain confident in the strategic direction we have set for ourselves.
  • We are committed to the recruitment and retention of the very best faculty and students;
  • We are committed to providing adequate financial aid to make Washington and Lee a viable opportunity for students who qualify to attend;
  • We are committed to remaining an employer who treats employment as a shared responsibility between the institution and those who devote their careers to Washington and Lee.

The challenges that we all face are daunting. The uncertainty makes these times all the more difficult. But Washington and Lee has always been a resilient institution, largely due to the devotion and generosity of its alumni, students, faculty and staff. With your continued help and support, including participation in the Annual Fund and the Parents Fund, and through the careful management of our resources, we are confident that we will be able to offer the best possible Washington and Lee education to our current students and to achieve our long-term goals.