As we settle into our new experiences and slowly become accustomed to staying connected while physically distant, we are looking ahead to what's next and beginning to assess the long-term impact of the global pandemic on our community.
Some of you may not yet be ready to look ahead to the future, instead choosing to focus on getting by one-day-at-a-time. That is okay. Others of you may be wondering what life will look like when social distancing ends, planning for when we can be together again on campus. Both approaches are valid and welcome.
Grinnell is exceptionally fortunate to have entered the global public health crisis in a position of strength with operating reserves and endowment funds that helped us cover our community's needs in this moment. We moved quickly to refund millions of dollars in unused room and board expenses and provide additional millions in emergency funding for student travel, housing, and storage. We converted need-based work-study to grants. And we invested in human and financial resources needed for academic continuity, ensuring our students have access to the technology they needed so that faculty were able to move their courses online.
We are also incredibly grateful for our generous alumni and friends who donated through the "Supporting Our Students Fund" (SOS Fund) to address immediate student needs related to the COVID-19 pandemic. And we anticipate receiving some funds from the federal stimulus support. Nonetheless, the net financial impact of COVID-19 in the immediate term has been significant.
While Grinnell does have resources that will help us recover some of the costs of the past few months, we cannot look to the future as business-as-usual. Across higher education and throughout the economy, there is uncertainty about future financial implications for all of us. Now, more than ever, our plans and projections must factor in uncertainties around our revenue, enrollment, and endowment.
Many higher education institutions have come forward in recent days to share news about very real economic threats to their continued existence. Grinnell College, however, is among a small group for whom the economic consequences of closing campus may not be as dire as others, but we should not take our position of strength for granted. We have an opportunity to be a leader in higher education, but that will depend on how we move forward. And so, we must prepare now to grapple with the long-term financial implications of the crisis, focusing on recovery and on rebuilding a Grinnell College that adapts to new realities and stewards our resources to sustain our academic mission.
Even before the crisis, Grinnell College was heavily reliant on our endowment for operating costs which presented significant risk should the market crash; to mitigate that risk, we built reserves and began to shift our income streams. The pandemic has had a significant impact on the markets and thus on our endowment, making it all the more vital that we continue to evaluate how we draw from it. We expect that record levels of unemployment and wage losses will affect the financial capacities of our current and future Grinnellians, requiring us to support the growing population of students with greater financial need.
While our past experience and choices may inform our deliberations, grounding us in our mission and values, they will not predict or secure our future. We cannot continue to operate as we have grown accustomed to in recent years. Instead, we must continue to adapt and reimagine how we provide a high-quality education that still allows for discovery and the exchange of ideas even in the face of new challenges.
The level of uncertainty and the magnitude of change we are facing calls for close partnership of the board, administration, faculty, staff, and students. While there is a great deal that we do not have control over, we do have control of how we, as an institution, make decisions and lead. Our collaborations this spring have held us in good stead, and we will maintain our iterative and collaborative approach to decision-making. Together, the board and administration will appoint an advisory/steering committee representative of the College's stakeholders to guide Grinnell's path forward. The members of the committee will be shared once they are named. Staying true to our communication processes, we will have ways for everyone to provide input both individually and through their departments and divisions.
As we plan future budgets and establish fiscal structures to sustain the institution through what are likely to be long after-effects of the pandemic, no change in the operating budget is unimaginable or off-the-table for reconsideration. There are no projects that will be designated as untouchable. We will have to think about different ways of working and recognize that there are likely to be things that we have to stop doing. Within this work, we will strive to limit the impact on faculty and staff. And, to the extent possible, we will avoid across-the-board cuts, instead seeking targeted solutions from all divisions.
For the past several years, as a matter of prudent fiscal management, the College's senior leadership has been making it a standing practice to create annual shadow budgets that could account for revenue cuts of 2% and 5%. That work can serve as a starting point for considering larger potential revenue reductions. Moving forward, we will consider multiple budget iterations, including possible reductions in revenue to arrive at best, moderate, and worst-case scenarios. We hope to know what level of budget reduction we may need to take by early summer, but the pandemic situation is still changing rapidly and thus we will have to adjust as we learn.
Any budget recommendations should reflect our mission, values, and priorities: maintaining academic excellence and the quality of the student experience, building community and advancing diversity and inclusion, furthering social responsibility to provide access to a Grinnell education, continuing our institutional responsibility for financial stewardship and sustainability, and supporting our faculty and staff.
We have difficult decisions ahead and will be well served by the creativity, compassion, and consideration for community that are the hallmarks of Grinnell College and that you all have demonstrated time and again throughout this spring. Adaptation will be required of all of us. We will remain united in doing everything we can to provide a Grinnell College education to our students, and in protecting our faculty and staff.
The uncertainty of the times can feel destabilizing, but know that we are doing all we can to ensure a stable future for Grinnell. We are confident that if we come together to address these challenges before us, as we did in the early days of the crisis, we will demonstrate again the resilience that led to the strength of our College before we encountered the pandemic.
The Community Friday session this week will be dedicated to sharing how we, as a community, will work together to address the economic impact of COVID-19 on the College. Details for the Community Friday session will be forthcoming.
Please stay safe and stay well. Best wishes,
David and Raynard
David Maxwell '66
Chair, Grinnell College Board of Trustees
Raynard S. Kington