The Wesleyan Student Assembly (WSA) officially released a report this past Sunday from the September 2008 Board of Trustees retreat. While the primary function of these retreats is to provide an opportunity for Board members and faculty/student representatives to discuss current priorities and long-term goals for the University, the board spent considerable time reviewing the University’s current financial situation.

Last week, the University revealed that its endowment for Fiscal Year (FY) 2008 declined by 3.9 percent, compared to the endowment’s 15 percent growth for FY 2007. This decline translates to a shortfall of approximately $100 million, since the endowment was expected to land in the $700 million range and slipped into the $600 million range.

Speaking at Monday’s forum on the financial crisis, Tom Kannam, Vice President and Chief Investment Officer, explained that the University’s investment goal has been to take advantage of opportunities for long-term growth. By diversifying its portfolio through investments in domestic equity, international equity, hedgefund strategies, private equity and venture capital, the University has been able to withstand fluctuations in segments of the portfolio without having it affect the overall portfolio.

In the current economic crisis, however, the University’s diverse portfolio has not prevented it from feeling the negative effects of the economy. According to Kannam, although the University has maintained a diverse portfolio, the endowment’s performance has correlated to that of the economy.

During the retreat, the Board reviewed the financial picture of the University, looking not only at the immediate impacts of the national economic crisis on the University’s endowment and budget, but also at the University’s priorities and long-term plans.

“This time, the Board arrived with questions—how will the economy effect financial aid and fundraising, among other aspects of the University,” said President Michael Roth when he spoke at Sunday’s WSA meeting. “The last thing the Board wants to impact is a student’s academic experience.”

Roth noted that the University is not looking to raise tuition to offset the declining endowment. Moreover, one of his goals is to find ways to make the cost of education more affordable. Roth also emphasized the necessity for implementing reasonable spending plans, particularly during these rough financial times.

“In the past, Wesleyan has had issues with overspending, especially given its economic capacity,” Roth said. “The University has not been investing enough in the future of the school. Too much is done on an annual basis.”

The University has already undergone several rounds of budget cuts, but in order to keep the University’s annual draw on the endowment below 5.5 percent, additional rounds of budget cuts will have to be made.

“We are committed to staying within the policy limits established by the Board and that means looking at all options, including a further slowdown in the growth of the operating budget,” John Meerts, vice president for Finance and Administration, wrote in an e-mail to the Argus.

A significant part of the annual budget comes from the Wesleyan Annual Fund (WAF). According to the WSA Report from the Board of Trustees retreat, the University raised $34.7 million last year, but fell short of the $17.6 million needed for the WAF.

According to WSA Vice President Saul Carlin ’09, University Relations often has an easier time raising money for the endowment because donors are more inclined to contribute to a fund that benefits students in the long run, versus the WAF, which gets funneled into the budget and used annually. As a result, Meerts presented a proposal at the retreat to freeze the WAF goal at $17.6 million annually, so that a larger percentage of alumni donations can be placed directly into the endowment.

“So basically, the size of the annual fund [WAF] will not increase annually as it has in the past,” Carlin said. “As the budget undergoes pressures such as inflation, this flat sum won’t go as far.”

According to Carlin, the University’s long-term goal is to reduce its reliance on the WAF.

During the retreat, the Board also discussed financial aid, as it is a growing concern in light of the national banking crisis that is affecting the accessibility of loans.

“Committee members consented to the fact that with the risk of credit becoming more difficult to obtain, many students may have more difficulty getting outside loans in the near future,” the WSA report from the 2008 Board of Trustees retreat reads.

Thus far, according to Roth, the University has managed to assist students in getting the loans they need. In the future, the University is planning on matching students with agencies that provide credit.

“We’re going to try to monitor students and match them with lenders,” he said at Sunday’s meeting. “Ideally, over time we want to lessen the requirements for loans.”

According to Roth, financial aid will remain a top priority of the University.

“While one of my goals is to expand financial aid, right now the University’s priority is to maintain it,” Roth said. “Trade economics are about tradeoffs—you can’t just add, you have to cut. I asked the Board, ’Do you want to cut financial aid?’ It’s something we’re not willing to do.”

However, the economy’s indirect effect on alumni donations could impact financial aid.

“It is our job, in University Relations, to make the case for Wesleyan, especially in tough economic times,” Barbara-Jan Wilson, vice president for University Relations, wrote in an e-mail to the Argus. “It will be harder to raise money this year, some people simply won’t have discretionary income. We hope those with the means will step up. The Wesleyan Fund is a critical part of the University budget and provides over $15 million annually, much of it to financial aid.”

According to Carlin, while many other universities are now at the climax of their fundraising campaigns—meaning they need their pool of givers to be especially willing to donate money—Wesleyan has not yet reached that point in its campaign.

“We’re fortunate that this economic downturn doesn’t coincide with the climax of Wesleyan’s capital campaign,” he said.

While Roth noted that fundraising this year will be particularly challenging, he emphasized in Sunday’s address that the University will need to find ways to increase its revenue in the long-term.

If anything, both students and faculty are feeling the ramifications of the unstable national economy, and so is the school.

“While Wesleyan is caught in this economic turmoil, it’s an economic squeeze we can get out of,” Roth said.