SPRING 2009

Q&A: College's officials discuss shorter and the economy

For several years, Shorter College has been experiencing remarkable growth. Record enrollments, campus improvements and new programs have strengthened the college and broadened its opportunities for the future. Yet, Shorter, like colleges, universities, businesses and individuals across the nation, now finds itself facing a dreary economic forecast.

What does the current economic situation mean for Shorter and how will the 136-year-old institution fare? The following question-and-answer session with President Harold E. Newman and Chief Financial Officer Stephanie Owens illustrates how the college is responding to current financial pressures.

How has Shorter College been affected by the slowing economy?

Newman: “The positive momentum that we have been experiencing in recent years has left us in a much stronger position than some other institutions. The college enrolled 1,136** traditional students in the fall semester, and thanks to better than expected retention, we are again experiencing a record enrollment this spring. In fact, we have 1,051 traditional students enrolled, which is the first time our spring enrollment has been greater than 1,000.”

**Total fall enrollment for the college was 3,123, including 1,136 in the traditional program, 1,687 in Professional Students, and 300 in graduate programs.

Owens: “As I talk with CFOs of other institutions, I am learning that we are somewhat unique in that we have experienced growth over the last four years. In addition, the administration and the trustees made a decision to begin the current fiscal year as of June 1, 2008, in a contingency budget that had been cut $1.2 million. That proactive step gave us a five-month head start toward reducing expenses.”

Have those planned reductions been enough?

Owens: “The contingency budget was a very good start. Of course, no one could have foreseen the drastic changes in the stock market and in the nationwide economic picture. Since late fall, we have been taking steps to reduce expenses, asking department leaders to weigh each purchase or position carefully to see if it is a must or if it can wait. These actions are very similar to what most of us are doing as individuals. We are currently planning three budgets for the 2009-10 academic year and will begin the year under the worst-case scenario.”

Newman: “As we are making decisions to reduce expenses, we are committed to doing so with the least possible impact on instruction and on the academic experience of our students.”

Why are budget reductions necessary when the college has a record enrollment?

Newman: “Our traditional student numbers are quite good, and every indicator is that we will have another year of growth in the fall. Additionally, the Professional Studies program had a very good January, and they seem to be exceeding their budget numbers for the year. Yet, tuition and fees comprise only 63 percent of our revenue stream. The remaining sources of revenue are private gifts and grants and income from our investments.” Owens: “Our endowment at the end of the 2007-08 academic year was approximately $24 million. To date, we have seen that value reduced by $7 million. That is right in line with what other colleges and universities are reporting: a decrease of 25 to 35 percent in the value of their endowments. Our board of trustees has a very conservative endowment spending policy, which allows us to receive up to 5 percent of the earnings from our endowment. If there are no earnings, there is little to no income. We have also had a small reduction in the amount we receive from the Georgia Baptist Convention because those funds are driven by the earnings on their endowments.”

Newman: “One bright spot in this economic picture continues to be the generosity of Shorter’s alumni and friends. As of early March, our fund-raising efforts have already generated pledges and gifts for the Shorter Fund in excess of what was raised during the last fiscal year. We also have 100 percent participation in giving from our trustees, our faculty and our staff, which shows a deep commitment to the college. Our immediate challenge is encouraging annual giving to help the college meet our tightened budget.”

What would you like our readers to remember about this situation?

Newman: “Shorter College is not in a crisis; instead, we are on the cusp of a new era as we prepare to transition to university status. We are entering new circles of excellence in academics, in the arts, and in athletics. We have positive momentum, but we are not exempt from feeling the effects of the economy. Yet our mission is important. The work that we do and the life-changing opportunities that we offer are vital for this generation of Shorter College students and future students as well.

“I ask our alumni and friends for three things: keep Shorter College in your prayers, encourage the high school students in your lives to consider Shorter, and consider supporting the institution financially or expanding your support. Each of these will help sustain us in the days ahead.”