March 14, 2014
Tommy Shomo '69
This is the first installment of a three-part interview with Dr. Chris Howard. The following installments will be published on March 17 and March 19.
Chris Howard is in the fifth year as President of Hampden-Sydney College, and it is an appropriate time to reflect on those years.
On March 12, I sat down with President Howard to do just that, but before I relate that discussion it is worthwhile describing Hampden-Sydney on July 1, 2009. The endowment had dropped 19%; the opening enrollment that August would be 1068, down 5%. The 2009-2010 budget, which had been fashioned by the Board the previous spring, called for substantial belt tightening.
Howard: When I arrived on campus nearly five years ago, the Board had directed the elimination of a $1.8M deficit for 2009-10. At the same time, families' ability to pay college costs had been devastated by the worst recession since the Great Depression. Attracting and retaining the best students meant increasing financial aid, a point faculty made clear to me as I met with almost all of them during my first six months on campus. More financial aid pushes up the discount rate. However, in 2010 we increased scholarship and fellowship aid by over $1 million; by $1.5 million in 2011; by $1.9 million in 2012, and over $2 million this year. The opening enrollment slipped by only 1% in 2010 and by only one student in 2011. In 2012, the enrollment grew by 2%. We saw a .9% drop in the opening enrollment this past August the result of reducing the discount rate for entering freshmen.
Note: "How The Cost Of College Went From Affordable To Sky-High," NPR Morning Edition, March 18, 2013
Note: "How America Pays for College," the 2013 survey by Sallie Mae found that grants and scholarships now fund the greatest share of college costs.
Please explain further what is meant by the discount rate.
Howard: The discount rate refers to the amount of tuition and fees "discounted" to students through scholarships and need-based financial aid. I imagine that there has never been a time in the history of the College when we have not had to financially help some of our students. Directly across from the door of my office hangs the portrait of Mr. P. T. Atkinson who was Treasurer of the College from 1919 to 1957. There are still living alumni whom "Mr. P.T." helped with small sums in the informal way things were then done. Today there is nothing small or informal about the process. This year [2013-14] Hampden-Sydney will expend $22,409,208 in institutional funds for scholarships and fellowships. That is 33.3% of the operating budget.
What is the current status of the endowment?
Howard: At $134,228,000 (June 30, 2013) the endowment has come back to nearly its 2008 level [$134,924,000]. However, we are still below the record high. Our endowment investment policy is set by the Board of Trustees. In 2009, the Finance Committee of the Board moved our investments under Spider Management Company which provides investment management services to endowments, one of which is the University of Richmond. Spider Management has a specific charge to preserve capital. The idea is to mitigate down-side risk but it also means you don't necessarily make out-sized gains. We have taken a 5% draw (standard best practice for colleges of our size) in each of the last five years except one [2011-12] when we took a Board-approved additional draw of 2% for operations, including an across-the-board raise for faculty and staff.
Would you talk a little more about faculty and staff compensation?
Howard: In the summer of 2010, I had a meeting with faculty and staff to announce an across-the-board pay cut of 1.54%. I was happy that after that year's opening enrollment was established we were able to restore almost all the cut, but you can imagine the initial impact on morale. In the last four years, all faculty and staff have had two pay raises - 2% in 2011-12 and 2% in 2013-14. Even in the years when faculty and most staff did not receive raises, we provided raises to our lowest paid employees. In the last four years, faculty who were granted tenure received the commensurate raises, and no sabbaticals were denied for financial reasons.
Enough good cannot be said in praise of the men and women who make Hampden-Sydney what it is. We have tried to assure that, although budgets are tight, we allocate sufficient resources to retain and attract high-quality faculty and to support their work. Our tenure-track faculty turnover rate for the last ten years is less than 1.5% for non-retirees. Professors like Kristian Hargadon '01, James Janowski, Sarah Hardy, Mike Wolyniak, and Alex Werth are publishing in the top journals and taking our students with them to conferences. Student travel stipends are requested by faculty and to date this year every request to include student travel to academic conferences has been funded by the Provost. We are enormously proud of the achievements of our entire faculty.
Let's turn to over-all budget priorities.
Howard: Scholarships and fellowship are 33.3% of the 2013-14 operating budget, making them our largest expenditure. Second is instruction at 18.2% and to this should be added 3.9% for academic support which includes the library and computing center thus totaling 22.1%. . For comparison, Athletics [varsity and intramural} is 3.7%. In the last five years scholarships and fellowships have increased by 45.7%. In the same period total current revenues increased by 12.3%. Individual allocations are always going to be subject to debate, but the two realities are that student aid is and will continue to be our greatest expense and instruction and academic support our first priority.
Please talk about the College's fund-raising.
Howard: When I arrived, the College had just successfully completed a $100M capital campaign. That substantial undertaking temporarily tapped out our donor base. Many campaign gifts were made in five-year pledges and when the economy went sour, some donors had to stretch those pledges to eight years. Feeling the impact of the economy, the College had to focus on the Annual Fund, now called the Hampden-Sydney Fund, which supports annual operations. Current fund gifts (unrestricted and restricted combined) were $3,123,470 on June 30, 2009. At the end of the next fiscal year, they increased to $3,181,443, for 2011 another increase to $3,460,465, for 2012 another increase to $4,054,631. The last fiscal year was a paradox, the amount given dropped to $3,756,296 but the percentage of alumni donors was the highest in six years. The increase in alumni donors is attributable to the CASE [Council for Advancement and Support of Education] award-winning "3000 Alumni Strong" campaign.
However, there is more to annual fund raising than the Hampden-Sydney Fund. If you add gifts to the endowment, the physical plant and annuities/life funds, total annual giving was $11,320,944 the third highest total in the history of the College.
I recognize the importance of the Hampden-Sydney Fund, but the College faces some significant capital needs.
Howard: As you know, in 2011 we completed the Ty Cobb Baseball Park, a project paid for in-full by the donors. Also In 2011 the Wilson Center was expanded and remodeled providing meeting space for over 250 students each semester. There are now 115 students enrolled in Wilson Center programs. We exceeded our goal of $1.6 million to renovate most academic class rooms on campus. The phased renovation will be completed in 2018. Architects are currently working on a plan for a phased renovation of Winston Hall, which will provide greatly enhanced facilities for art, music, and photography. $1M has been raised for this project. We have a matching grant to substantially fund the design work on new science facilities. Three million dollars is in hand for the new student center. The renovation of Winston is a manageable project; the new student center is an achievable goal; new science facilities are a significant challenge. We will see progress in the next two years on these capital projects. The Strategic Plan approved by the Board in November 2011 calls for completion by 2020.
Part 2 will focus on students.