Goddard faces $550,000 deficit
By Eric Blaisdell
STAFF WRITER | June 15,2013
While avoiding any layoffs, Goddard College in Plainfield is imposing pay cuts on its faculty and staff to help counter a $550,000 deficit.
President Barbara Vacarr and Chief Financial Officer Faith Brown met with a reporter and Times Argus Editor Steven Pappas on Friday to discuss the cuts and how the school plans to turn around its financial situation.
The school is running a deficit in its $12 million to $13 million operating budget, Brown said. To bring that number in check, she said, faculty and staff will see tiered pay reductions based on how much money they make. Employees making $30,000 or less will be unaffected, Vacarr said. Other cuts include a suspension of matching contributions for retirement, no severance pay, and some reduced hours for the equivalent of 1˝ full-time employees in all departments.
Brown said the school is planning for the cuts to last only a year.
The deficit does not affect any of Goddard’s capital projects already in the works, they said.
Vacarr described the plan, which was outlined to the Goddard community Friday, as a “correction.” It received unanimous approval from Goddard’s board of directors earlier Friday.
Brown said the reason for the deficit is the same problem colleges across the country are facing: declining enrollment. She said higher education is under pressure from a sluggish economy, and with Goddard being 96 percent tuition dependent, with a very small endowment, the school has been forced to look to other revenue sources.
Another reason for Goddard’s financial difficulties is the way the school fixed its previous economic problems. In 2002, the school closed its residential program and focused all of its efforts on its low-residency model, where students are on campus for just days rather than months and do most of their work at home.
Vacarr said that change “put a tourniquet on the problem,” and enrollment started to come back. But no one had a plan for the future, she said. What the school is doing today is trying to correct those changes to help keep the school financially solvent, Vacarr said.
The school could have simply raised tuition to help balance the budget, but after already raising tuition by 4 percent earlier this year, Vacarr said, she decided against another increase. She said she did not want to pass any costs on to students.
“Our commitment is to keep tuition accessible and within the range of public (college) tuition,” Vacarr said.
Instead, Vacarr said, they are continuing to invest in areas of the school where results are taking root, including marketing, partnerships and fundraising.
Laying off employees to help fix the financial issues was another option Vacarr said she refused to consider.
“There have been decisions made in fear, and I don’t think that’s a good way to make a decision,” she said. “It has to be data driven.”
But it’s not all bad news, as Vacarr said that data and initiatives the school has put into place are starting to show results, and she hopes continuation of those programs will help dig the school out of its financial problems. Certain partnerships that have generated interest in the school are “feeding” students to the college.
The school is leasing parts of its campus to the Waldorf School and EarthWalk, and Goddard is in talks with the Center for Circumpolar Navigation for a lease.
Goddard also is getting much more interest from potential students, Vacarr said, as inquiries have increased by 33 percent to 5,074 and raw applications have increased by 155 percent to 1,106.
The fundraising the school has been doing is also starting to pay off, Vacarr said, with a once-nonexistent fundraising initiative having gone up 88 percent in the last year. There were 155 new donors to the college in fiscal year 2013, she said.
Faced with the challenges, Vacarr and Brown indicated they will not know if the “seeds” of their work will yield fruit until about April, when a complete analysis is finished.