By Paul A. Anthony, Editor in Chief
The university endowment has fallen another 13 percent since May 31, university President Royce Money announced at his second annual state of the university address Monday.
The revelation came as Money told faculty and staff about how the university had fared in the past year and how he expected it to do in the next 12 months.
“God has blessed this institution,” Money said, but “from a financial standpoint, the nation is dealing with pressure it hasn’t seen in decades. Relatively speaking, we find ourselves in a position of great strength.”
Money noted that a volatile stock market and reluctant economy have slowed contributions to the university, stunted enrollment growth and erased a total of about $22 million, or about 15 percent, from the endowment since June 1.
The address focused on four main points: “Where are we today?”, “What challenges do we face?”, “What is the status of our reallocation effort?”, and “What should you expect over the next 12 months?”
Enrollment has tabled off in the past five years, Money said, describing the 4,700 mark as a “glass ceiling” the university is having trouble breaking. The university wants to add about 200-400 to that total by its centennial in 2006.
Meanwhile, the university’s admissions standards have increased noticeably, Money said, citing the average freshman’s SAT score, which has jumped from 920 a few years ago to 1104 this fall.
Amidst a litany of bad economic news, administrators had thought the school would be as much as $750,000 below budget this summer, thanks to an even lower enrollment than projected. But enrollment spiked the last two months of the summer and the university met budget projections this semester.
Money also stressed that even with a large endowment drop in the past three months, the endowment still ranks 141st out of about 4,000 colleges and universities nationwide.
Money told the Optimist the drop would have little or no impact on next year’s tuition increase and an unnoticeable effect on scholarship money.
“We’re fortunate enough to have an endowment large enough to stand this,” Money said in his address.
The lagging economy has forced the university to shave about $1 million from its budget, which normally runs about $7-8 million.
“That’s a fairly significant pressure point,” Money said. “The university budget committee is already working on a strategy for recovering potential losses and balancing our loss.”
The university continues to prepare for the 2006 centennial celebration and is working to meet its goals, Money said.
Those goals include an enrollment of about 5,000, an endowment of at least $250 million and a much-improved freshman-to-sophomore retention rate.
“That goal has been elusive,” Money said.
The university’s reallocation process is winding down, with 10-15 positions still needing to be cut, mostly through attrition, Money said. He said most of those would be finalized before Christmas.
The reallocated money went toward the following things:
* funding multicultural efforts, including the Office of Student Multicultural Enrichment;
* upgrading technology and creating a university-wide tri-annual replacement program;
* increasing alumni and development funding;
* enhancing the College of Business Administration as it moves toward accreditation;
* pushing faculty and staff salaries up to a competitive level;
* and providing for maintenance of Williams Performing Arts Center, among other things.
Despite the economic difficulties and financial concerns, the university is on strong financial ground, Money said.
He mentioned several times that the recent difficulties have hit most schools across the country and that in relation to others, ACU is doing better given the situation.
“I think that reveals the hand of God at work,” he said.