President R. Gerald Turner is taking action to assure the financial strength of SMU during the current economic downturn. He outlined his plans in a letter addressed to the university community, which included stricter salary adjustments, new hire reviews, and a freeze on major capital expenditures that lack previous funding.
The announcement followed his previous state of finances address in which he said the endowment fund, or SMU’s nest egg, had declined 13.3 percent from July 1 to October 31. The decline encompassed one of the worst months in stock market history when major indexes declined nearly 30 percent.
Since that time, Turner has reported an even greater decline as financial markets continue to deteriorate. He said another 12 percent was lost from the endowment fund since his first address, totaling to a 25 percent decline since July 1.
In his letter, Turner broke down where SMU gets funding, citing tuition and fees as the largest source of revenue, accounting for nearly two-thirds of the operating budget. He said the upcoming visitation weekends and AARO sessions are critical in helping prospective students and their parents decide that SMU is the right place for them, even in these economic times.
He said the next major portion of the budget is funded by the declining endowment and finally by major private giving. He said that most likely, as the economy continues to weaken, we should expect to see at least a delay in the gifts that some donors intended to make during the time,
Turner highlighted many implementations of prudent fiscal actions that will allow [the university] to enter the next academic year with a strong financial position.
His 12 strategies included necessary approval by appropriate provost or vice president for all new and/or vacant positions. Also stricter guidelines will be applied to salary and benefit increases. Along with this, tightening of travel and administrative budgets will help cut costs.
Turner said these actions will help enhance the financial strength of SMU, These efforts will ensure our ability to continue our academic advancements and to capitalize on opportunities ahead.
