“Thanks,” she said, “for showing up this afternoon.”
College President Nancy Dye said she’d called a special faculty meeting Tuesday to “answer some questions” and “tell a longer, fuller story.”
At a standing-room-only meeting of the General Faculty, with more than 100 faculty and staff present, she did just that. In a 50-minute PowerPoint presentation, the President touched on questions of selling art from the museum, endowment performance and terminating the College’s football program. She managed to bring laughter from the faculty in a time where the College’s finances, to many, look dire.
Layoffs, she said, were avoided at all costs.
“I realize that laying people off does not sit well with the community,” Dye said. “It’s also painful to be the agent of causing some distress.”
These layoffs, she said, were put off more than a year. While other colleges and universities across the nation have been slashing positions, Oberlin has been quietly eliminating them through attrition.
“We have eliminated mostly through attrition 78 positions throughout the College,” she added. Beyond this, administrators decided to cut another 11 positions, to, “do more with less,” as she has put it
“It’s a good thing to preserve people’s jobs,” she added. “It’s also a good thing to preserve the core mission of the College.”
Dye also has opted to close the downtown Community Affairs office.
“At this moment we cannot afford to be operating an office with two full time positions,” she said.
But things are better at Oberlin than they were when she assumed the Presidency, Dye declared.
“From 1997 to 2000, Oberlin took much benefit from the great bull market,” she said. “Our fundraising reached record highs.”
Oberlin’s endowment shot up $72 million in one year in the late ‘90s, the College’s nonprofit statements show.
“The College intentionally used the great bull market of the 1990s to improve things,” she remarked.
She rattled through statistics in areas of admission, financial aid, faculty salaries and the student-faculty ratio. She asserted that the Science Center was integral to the College’s future success. And she lauded those involved in the College-community partnership.
While Oberlin’s endowment enjoyed record highs in 1999 and 2000, by the fall quarter of 2000, with the crash of the dot-coms, Oberlin’s endowment returns stagnated. The College’s investment in venture projects dried up, and donors began to grow stingy with their pocketbooks.
In June 2001, the College ran its first negative endowment return, Dye said. Then came Sept. 11, and the mushrooming of healthcare costs across the United States. It was then that Administration instituted a hiring freeze.
“The hiring freeze was put in to be cautious,” Dye said.
By May of this year, the endowment had sunk to $550 million from a high of $619.
She used a visual slide of a comic of the stock market with coffee cups growing to lattes in the late ‘90s, with 2001 as a styrofoam coffee cup. Faculty chuckled.
“We have a perfect visual representation,” she said. “The year of the giant latte, we were enjoying ourselves.”
“Our coffee cup grows smaller still,” she added. “It’s not even there on the page.”
She then sought to answer the question: “Why is our endowment falling so fast?”
Endowment spending, Dye said, is predicated upon growth in the market. During the late 1990s, the domestic stock market grew apace. The College was able to draw close to $30 million dollars each year, generally around 5 percent, out of the endowment to pay for its operating budget, and still see the endowment blossom, since the market was growing by a much wider margin.
But when the market tanked, the College continued to need $30 million annually to pay its bills. And not only was the market not growing, it actually began to shrink. The $30 million that was coming out of gains, began to burn cash, to the tune of $30 to $35 million a year.
“The endowment spending going forward is the problem,” Dye said.
With this necessary spending, the endowment fell last month to $479 million. If the College continues to spend this $30 million, the endowment will begin to evaporate, and paying salaries will grow ever-more difficult.
This is why layoffs were necessary, Dye said.
She then rattled off what she believed were the achievements of her Administration.
“We could have decided also not to build the Science Center,” she said. But without it, she said, it would be “highly dubious” whether Oberlin could remain in the top tier of private liberal arts colleges.
Or, she said, we could have no first-year seminar program. Or, we could have let the student-faculty ratio slip. The Board of Trustees recently approved 10 new faculty positions, and these hires are nearly done.
In these difficult economic times, Dye opined, Oberlin must hold onto its gains.
“The trick is to preserve and enhance the progress…we have gained,” she said.
And so she came back to the layoffs, after showing a graph of how Oberlin’s money is spent. About one-third of it is spent on salaries, and most other expenses can’t be altered, like operations, financial aid and depreciation. During the last five years, College employees have enjoyed salaries that have grown in sum by $10 million.
Salaries and wages rose 29 percent, and benefits soared.
“One way or another, usually many people will be touched by budget cutting,” she said.
Then she flipped to a slide of frequently asked questions. Among them were: “Why hasn’t the College sold art from its museum?” and “Why has the College not cut its football program?”
OC, she said, has a major art museum.
“Part of being a major art museum is that you don’t deaccession art for the purpose of using the money that you get for something else,” she declared. “Oberlin…holds art in trust.”
“To begin to erode the collection would be to immeasurably impoverish this institution forever,” she added.
As for football, she said she’d rather we continue to tackle competing schools.
“I don’t think we are at the point yet…to eliminate any academic program,” she stated. “Athletics is indeed an academic aspect of the College.”
And in the end, she said, employees would have to be laid off in athletics as well. Administrators have suggested through the years that the football program has allowed them to raise large sums of money for the division.
Then she moved to the topic of whether or not she should simply freeze faculty salaries. Already, she said, the salary increases this year would probably be negated by cost of living increases.
The College could kiss the gains they’d made on major benchmarks of faculty salaries across the U.S. academy goodbye.
“If faculty salaries were frozen, all gains would hit zero,” she remarked.
She closed with personal comments about Oberlin being a humane employer.
“I believe that Oberlin is a generous and humane employer,” she said. “This doesn’t mean that there are not conflicts, that there is not harshness in our workplace.”

The College, she said, “will move through and out of this period of trouble.”

Faculty delivered resounding applause.