For a look at how the College is faring in the current economic environment, we have turned to Paul Mutone, vice president for finance and operations and treasurer.
How would you describe Trinity’s overall financial philosophy?
Conservative. To protect the institution’s financial viability, its mission, and its assets, we must continue to be conservative in our assumptions and financial planning.
What was the state of the College’s finances just prior to the beginning
of the downturn?
The College implemented and completed a series of budget reductions in 2005 and 2006 that set the infrastructure in place for strong, balanced operating budgets. The endowment reached an all-time high in excess of $440 million and provided additional support for the annual operating budget.
Trinity passed through its own period of economic concern several years
ago. Has that helped us or hurt us in the current global crisis?
The College’s corrective actions at that time significantly helped position Trinity to better face the current financial challenges. Without those changes, our ability to “steer the ship” through the current economic storm would have been impaired.
As the crisis began to unfold last fall, what immediate measures did
Trinity take to minimize the damage?
President Jones called for an immediate reduction in discretionary operating budgets in the amount of $1 million. In addition, a temporary shift in the asset allocation of the investment portfolio occurred to minimize our exposure in equities and to produce greater liquidity in the portfolio.
What is the current plan for dealing with the situation?
Given the negative returns in the investment portfolio, the operating budget must be resized in order to continue to be balanced, taking into consideration the fact that the College will be receiving 25 to 30 percent less support from endowment income.
Where has Trinity made cuts in its operating budget?
To date, we have made cuts in discretionary spending and have scrutinized vacant non-faculty positions.
What are the nature and scope of Trinity’s loss?
From the high-water mark to the low point, the endowment lost approximately $170 million. In addition, operating revenues, exclusive of endowment income, declined approximately $3 million, representing revenue streams directly affected by the recession.
How does the financial situation affect enrollment and financial aid?
To date, enrollment parameters—the size of the student body and our families’ ability to pay—are in line with the College’s budget. The size of the incoming first-year class and the related amount of financial aid need are both in line with the budget.