Feb. 28, 2020: Winter 2020 Board of Trustees Meeting Summary

Dear Colleagues,

I am writing with a summary of our winter Board of Trustees meeting, which took place February 5-7 in New York City. As is customary, the Board had substantive discussions during its executive sessions and conducted much of its business through its designated committees. My thanks to Professor Bill Kenny, faculty chair; Professor Gary Steiner, faculty secretary; and Professors Tim Raymond and Peter Jansson for attending the various on-site meetings.

Expanding upon important conversations begun at the fall 2019 meeting, Board members spent a significant amount of time discussing the new enrollment management challenges experienced by many institutions, including Bucknell. As I indicated to the Board earlier this month, Bucknell is approaching future admission trends from a position of strength, yet is mindful of the new volatility that has entered the overall process. Bill Conley, vice president for enrollment management, and Kevin Mathes, dean of admissions, shared a detailed analysis of recruitment outcomes and takeaways from our experience with the Class of 2023, as well as an update on the current admissions cycle. As previously noted, a combination of demographic factors and new guidelines adopted last fall by the National Association for College Admission Counseling (NACAC) has permanently changed the recruiting landscape, posing new challenges to long-term institutional planning. In response, Bucknell administrators and Board members continue to consider all aspects of our recruitment process and will revisit this subject regularly.

Campus activism and free speech were important issues for Bucknell last fall, and will likely continue to dominate University conversation as the 2020 presidential election approaches and political opinion becomes increasingly polarized. In a discussion on campus dynamics and cultures, I outlined these factors and reviewed recent campus events involving controversial speakers, reiterating my commitment to a campus climate that values free speech as well as constructive and respectful community dialogue. University administrators and trustees seek to address these and related issues in a way that ensures a diversity of ideas and distinguishes Bucknell as a clear voice of reason and leadership as we promote the different perspectives that define a liberal arts education.

In other business, the Board approved the re-election of the following trustees for five-year terms: Makoto Fujimura ’83, P’13; Steven Kohn ’81; and Kathleen LaPoint P’14, P’17. We thank these trustees for their continued loyal service to Bucknell during their new terms, which are effective July 1, 2020, through June 30, 2025. Additionally, the Board elected three former trustees to emeriti status. They are Laura Kinney ’81, Nancy Prial ’80 and Larry Klock ’69. As I noted in the summary of the fall 2019 meeting, the Board is making changes to its emeriti structure. Emeriti trustees will no longer attend the Board meetings but will instead have an annual and separate emeriti Board meeting as well as emeriti-focused programming connected to other University events, such as Homecoming and Reunion.

You may recall that the Board annually sets our comprehensive fee and salary pool at its winter meeting and approves a final budget at its spring meeting. With that in mind, let me focus my remaining comments on a variety of financial matters.

Much of the Board’s discussion focused on financial strategies to advance the implementation of The Plan for Bucknell 2025. In support of commitment #4 of the plan, the trustees’ actions aligned with our initiatives to reallocate University resources to sustain Bucknell long into the future through, most notably, a strategic increase in the financial aid discount rate. Please refer to the plan for details, but in brief we seek to increase our discount rate from 30.5% to 35% by 2025, recognizing that this must be the absolute minimum goal. Each percentage point of increase requires spending about $2 million more per year. More particularly, and considering the most recent admissions cycle and the national news regarding college “net costs,” we seek now to accelerate the expansion of our financial aid program.

Informed by the work of the Planning & Budget Committee, which recommended an increase of 3.25% in our comprehensive fee, I endorsed and the Board approved a 3.50% increase in the University’s fee for the 2020-21 academic year, bringing the total to $74,900. We will share that information with our students and their families shortly. While we remain concerned about continued inflation in higher education, both the Planning & Budget Committee and I recognize the need for the increase at this time. And we are certainly not alone. At the time of this writing, other institutions similar to Bucknell have started to announce increases in line with or in excess of ours.

The trustees also approved a total increase in the faculty and staff compensation pools of 2.0% — an increase that had been recommended to me by the Planning & Budget Committee. Everyone will recognize that a 2% salary pool is modest at best. I wish we could do better by our community. We are highly constrained, however, by the reality that compensation expense comprises nearly two-thirds of our overall budget, and that the University must constrain expenses at this critical juncture. Members of the Operations & Management Group have decided that their own salaries will not increase for FY21.

Although not specifically addressed by the trustees, we will continue to hold aside the traditional 0.5% of this compensation pool for purposes of promotions, equity and appropriate market adjustments. While this holdback is one-quarter percent less than recommended by the University Planning & Budget Committee, this allotment will allow a larger percentage of the total compensation pool to be allocated based on our annual review processes.

Even as we seek ways to constrain expense growth and carefully consider the reallocation of existing and new resources in these times of financial uncertainty, our modeling suggests that we will still confront a budget deficit in FY21 (which begins July 1, 2020) and beyond. Thinking about our strategic needs, especially in service of improving our financial aid program, and taking into account both the significant financial implications of a somewhat smaller than expected Class of 2023 as well as the uncertainty in enrollment of the Class of 2024, I will be asking our finance and leadership teams and partners across campus to begin reducing their overall FY21 expenses, including both compensation and non-compensation/operating expenses, and to plan for further reductions in the period ahead. As an example of the impact of reduced spending, a 1% reduction in wages, benefits and general expenses would amount to nearly $2 million, which would be directly applied toward improving our financial aid program. I anticipate changes in FTE numbers only through attrition, but will ask that special attention be focused on opportunities to delay filling open positions or to eliminate them altogether. These reductions cannot be “across the board” but must be targeted as best as possible to minimize disruptions to our programs and goals.

As we continue to make important decisions regarding implementation of The Plan for Bucknell 2025 amid rapidly changing circumstances in higher education, please mark your calendars now and join me for a strategic planning update meeting on Tuesday, April 28. This is the day after classes end and the week following the spring Board meeting, during which our FY21 budget will be approved. At that point, we will also have at our disposal the observations of the Huron Consulting Group, which we expect to receive in mid-April. This update meeting will take place before the nominal May 1 deadline for new students to commit to Bucknell. More broadly, as the landscape of higher education and Bucknell continues to evolve, I may call such gatherings more than once per year.

Thank you again for your dedication to Bucknell students and the University. While we are navigating new challenges, I believe that with our combined talents and shared belief in the importance of our mission, we will continue to offer the best possible education to our students today and to future generations of Bucknellians.

My best,

John