Dec. 4, 2020: Fall 2020 Board of Trustees Update

Dear Colleagues,

I write to share this summary report of the fall 2020 Board of Trustees meeting, which took place from Wednesday, Oct. 21, through Friday, Oct. 23. Due to the continuing COVID-19 pandemic, sessions were again held via Zoom. I am grateful to everyone who planned and participated in these important discussions at this critical time in the life of the University. My thanks to Professor Coralynn Davis, faculty chair; Professor Jan Knoedler, faculty secretary; and Professors M. Laura Beninati, Alan Cheville, Paula Davis, Erin Jablonski, Peter Jansson, Anjalee Deshpande Hutchinson, Nick Jones, Angèle Kingué, Emily Martin, Eddy Ng, Linda Smolka and Virginia Zimmerman for their participation in various committee meetings.

During executive sessions, I presented the full Board with detailed information on University operations this semester and our management of COVID-19. I wish to note here that the Board recognized the exceptional efforts made by Bucknell employees in recent months. Trustee Chair Chris O’Brien ’80, P’18, P’20 shared the following statement at the business meeting, and I would like to make sure all faculty and staff are aware of the Board’s sentiment:

We recognize how extraordinarily difficult this period of time has been during the COVID-19 pandemic. It is absolutely extraordinary that we have been able to keep Bucknell open and functioning, and our students, faculty and staff safe. We have no illusions about how difficult it has been or how tiresome it has been, and we know that the faculty and staff have gone above and beyond anything that could be expected in order to achieve this. We are extraordinarily proud of this success, and I extend on behalf of the Board a heartfelt thank-you for all the efforts that you have made over the last months and all the efforts we know that you will continue to make on behalf of this University. Thank you very much for all that you have done.

In another executive session, the full Board participated in a diversity, equity and inclusion (DEI) program led by Deborah Bial, founder and president of the Posse Foundation, and Dorcas Davis, Posse senior consultant and co-founder of the March for Racial Justice. The session provided the trustees an opportunity to discuss their own values, identities and life experiences with regards to race and inclusion, and to develop further the Board’s role in the University’s overall DEI efforts. The Board will continue annual DEI programming to build upon this experience. As you might expect given our guest leaders, this was a powerful and revealing session.

All Board members also took part in a robust discussion about college rankings and received an update on enrollment management and admissions marketing, particularly how it supported our recruitment of the Class of 2024. A highlight was a preview of a new admissions virtual reality project funded by Marc Lore ’93, which is expected to launch soon. The Board had an opportunity to hear from Lisa Keegan, our new vice president of enrollment management; Heather Johns, vice president of communications; and Kevork Horissian, assistant provost of institutional research & assessment.

Provost Elisabeth Mermann-Jozwiak provided the full Board with a detailed explanation of how University academics have adapted to the challenges of the pandemic, citing the outstanding work of the faculty and staff, particularly the Teaching & Learning Center and Library & Information Technology. Further discussion took place separately in the Academic Affairs Committee, which received updates on collaborations across the colleges, academic advising, retention, DEI and civic action.

Another executive session featured College of Engineering Dean Pat Mather’s presentation of Engineering’s strategic plan. Broader conversations took place separately in the Board’s Strategy Committee, which met to review the implementation of the Plan for Bucknell 2025. The committee recognized the need for an aggregate tracking mechanism to monitor and measure plan progress at regular intervals, and the need to ensure that Bucknell’s strategic priorities remain relevant in the fluid higher education landscape.

During the Trustee business meeting, the Board completed its annual confirmation of University officers and approved the election of three Board members to trustee emeritus status effective Nov. 1, 2020. We are grateful to Juanita Brown, Kathleen LaPoint P’14, P’17 and William Morrow ’70 for their years of service and welcome them to emeritus status.

For some time I have communicated to you the increasing pressure on University finances. (Recordings of my most recent town hall sessions on this topic are here and here; login is required.) In parallel, the Board has undertaken important discussions about Bucknell’s financial challenges and our path forward. These discussions continued at the October meeting, and in the weeks since.

Six months later than in a typical year, the Board approved the FY21 budget with a provision that any projected deficit should not exceed $5 million. Our initial estimate was a deficit of approximately $8.3 million; the specified reduction is necessary to protect against further losses and to begin positioning the University for the long-term demands of the future. We have begun the process of reducing proposed operating expenses by $3.3 million for the year to deliver on this directive.

Focusing on its fiduciary role and the long-term sustainability of the University — and noting such factors as national demographic shifts, the increasing levels of uncertainty we anticipate in every aspect of student recruitment and retention, the competitive landscape and growing public unrest with the cost of higher education — the Board specified several changes to the financial parameters we use in our budget forecasting. These forecasts are produced annually, cover a five-year horizon (at least) and need to show balanced annual budgets. These new parameters will reduce the University’s overall income relative to previous forecasts while increasing spending for financial aid. (I’ll note that, since financial aid is a discount on our comprehensive fee, improving our financial aid program is effectively another reduction in net income to the University.)

There are four changes reflected in the Board’s new policies. Two address issues of endowment spending, and two speak to the net price of attendance (cost after financial aid).

Between FY22 and FY25, the endowment spending cap will gradually be reduced from its current 5.5% to 4.5%. This reduction is in line with industry standards and our strategic plan, and is attentive to long-term financial sustainability and intergenerational equity. This year the endowment provided nearly $50 million toward our budget. The other change related to endowment spending lowers the current 6.5% assumed real rate of return on the endowment, which will decrease to 5.5%, effective with the FY22 projection and budget.

The Board has also expressed a strong desire to adopt annual comprehensive fee increases that are substantially smaller than in recent decades, and ideally no greater than the rate of inflation. Similarly, there is great interest in pushing our financial aid discount rate higher than the 35% specified in our strategic plan, in part because of experiences over the past two admissions cycles.

In addition to these policy changes, the Board has also strongly encouraged a full exploration of potential avenues of revenue enhancement, including expanding student enrollment; reducing student attrition and increasing transfer student capture; and promoting online class offerings for continuing education or prospective students.

COVID-19 has disrupted the higher education landscape nationally, and the pandemic has only accelerated the University’s planned and strategic momentum toward a financially sustainable Bucknell. Thus we find ourselves in a situation that is more urgent than ever — one that calls for analysis and timely action on all levels of operation. I will be sharing additional information about financial issues in the weeks and months ahead, and I ask for your support and cooperation as we prepare for this new phase of review and adjustment.

Thank you for your continued dedication to the University and our students. While these are not easy times, we will continue to persevere and ensure Bucknell’s strength and success now and for generations to come.

My best,

John