“Financial Update From Chris Canavan ’84, Chair-elect, Board of Trustees”

Chris Canavan, OC ’84

Editor’s Note: The following is an email sent June 14, 2017 to the Oberlin College faculty and staff by the chair of the Board of Trustees. This was not submitted to the Review as a Letter to the Editors, but as it is addressed to the Oberlin community, we feel it appropriate to publish the text in full.

To the Oberlin community:

Oberlin’s Board of Trustees met last week. It was a bittersweet meeting because Oberlin is going through so many transitions. President Marvin Krislov will soon depart for Pace University. We bid farewell to Mike Frandsen, Sandhya Subramanian, and Debra Chermonte. But we also welcomed Oberlin’s 15th president, Carmen Ambar, and we’re lucky to have Alan Norton, Donica Varner, and Manuel Carballo joining us. I will become chair of the Board of Trustees on July 1, following Clyde McGregor’s six years in that role.

Change can be exciting, but it can also bring anxiety. At Oberlin, as at most residential liberal arts colleges and conservatories, there is particular anxiety about finances.

I know that there have been very thoughtful discussions among the faculty about Oberlin’s financial situation over the past several weeks. I understand that the Faculty Councils worked diligently through options for tackling our long-term projected structural deficits.

Unfortunately, this coming year’s budget has been dealt an unexpected blow in the last month. As many of you already know, Oberlin’s primary source of revenue, student charges, will fall well short of our target because the incoming class is smaller than we expected and fewer students will return next year. There is no avoiding the financial impact of these shortfalls. Although we had already reduced budgets across the institution for next year, this shortfall in student charges will generate a deficit of about $5 million.

We spent a great deal of time debating how to deal with this deficit, in conversations that involved both Marvin Krislov and Carmen Ambar. We hope that this enrollment shock is a transitory one, but we won’t know for sure until we have a lot more information. We do know that Oberlin is not alone; many schools have seen enrollment fall below expectations this year, which doesn’t augur well for the future. That’s why we decided that it would be irresponsible to let the endowment absorb the full brunt of this shock. Our budget must adjust to changes that could persist for the next few years.

It is for this reason that the board has approved the administration’s recommendation of a budget that holds non-union salaries at their current level for the coming year. This does not eliminate the deficit, but it makes the most significant short-term difference without eliminating essential services and positions and jeopardizing our educational mandate.

The enrollment shortfall is a sign that Oberlin’s long-term financial model must change with the times. The cost of running institutions like Oberlin gets more expensive every year, while the pool of high-school graduates, which grew steadily beginning in the mid-’90s, will stay flat over the next decade. We must spend the next few years making important decisions that will ensure Oberlin’s financial strength well into the future. These decisions must be made thoughtfully and with broad consultation.

In the meantime, the board has asked the administration, faculty, and staff to identify ways to shrink our structural deficit, either through higher revenue or lower spending, by at least 5 percent of the cumulative budget over the next 10 years. This is intended to give the Oberlin community the breathing room needed to think carefully and purposefully about Oberlin’s long-term financial model, and to avoid making future decisions under financial duress, which almost never leads to healthy decisions.

We have not prescribed where those savings should be found. We will work with the administration, faculty and staff to make these decisions, not only because we believe in shared governance but also because consultation and deliberation always leads to healthier decisions.

This is not the first message I wanted to send to the Oberlin community in my new role as chair of the Board of Trustees. But sending this message is easy compared to the difficult work that the faculty, staff, and administration will have to do over the coming weeks and months. The board is grateful for this work.

I said earlier that change brings anxiety but also excitement. I know that Carmen Ambar will focus intently on Oberlin’s financial model, and that she is eager to work with you to keep Oberlin on firm ground for years to come. I also know that she shares our enthusiasm for Oberlin – for its incredible faculty and staff, its remarkable students, its committed alumni, and also for its enduring relevance to higher education and to social justice. These qualities give Oberlin the creativity, vigor, and resilience to deal with these challenges and to make the most of Oberlin’s incredible prospects. We feel very good about Oberlin’s future.

On behalf of the trustees, I look forward to working with the rest of the Oberlin community.

All the best,

Chris Canavan, OC ’84
Chair-elect, Board of Trustees