Update on COVID-19 financial impacts
Dear Baylor Faculty and Staff:
As we conclude the spring semester, I want to provide an update on the campus-wide efforts that have been underway regarding Baylor University’s financial outlook in response to COVID-19. Since our April 14 announcement establishing budgetary actions for FY20-21, I have been encouraged by the significant and selfless work of our leadership teams as we prepare Baylor not only to weather the impacts of COVID-19 but position the University for a strong recovery into the future.
Before I write further, however, I would like to express again my deepest appreciation to you – our faculty and staff – for your simply heroic efforts since mid-March. You have extended the love and grace of the Baylor Family to our students during these challenging times, while also caring for your personal health and well-being, as well as that of many others. Please know you have been in my thoughts and prayers daily.
The financial landscape
Higher education continues to face significant headwinds – both now and into the future – caused by COVID-19. SimpsonScarborough, a national higher education research firm that also works with Baylor, has indicated the “total effect on higher education could be catastrophic.” Among the many sobering findings in the firm’s most recent national survey, 40% of incoming freshmen not yet deposited are uncertain they can stay with their first college choice, and 26% of current students indicated they will not return to their current institution – an increase of 12% in just three weeks.
We firmly believe that Baylor has many distinct advantages, including our Christian mission, our size and academic scope, and overall institutional strength, to effectively and appropriately respond to the challenges presented by COVID-19. Additionally, I continue to be impressed by our leadership team – many of whom previously have managed crises at other universities – along with the expertise and dedication of our admissions staff and special initiatives such as the Bear Care program. It would not be prudent, however, to stand idle and ignore the many economic realities we face.
Our response
The comprehensive planning of our leadership and budget teams has incorporated mitigation strategies of cost avoidances, cost reductions and revenue allocations to prepare for three budget impact scenarios related to COVID-19. The “best case” and “moderate case” scenarios correlate to the $65 million to $80 million in budgetary actions included as part of the FY20-21 University budget under consideration by the Board of Regents next week. We outlined many of these responsible measures as part of the initial financial communication shared with you last month.
Let me reiterate that these comprehensive actions call for shared sacrifice across the University, impacting the academy, student life, athletics, and administration and support functions. With that said, we took great strategic care to protect the core educational mission of Baylor.
Each of the University divisions is in the process of preparing specific plans to meet their budget parameters. This will allow each vice president to strategically position their respective units in alignment with Illuminate and the University’s overall objectives. We understand that such division-specific decisions are incredibly difficult and could impact personnel, workloads and responsibilities, but these thoughtful actions are necessary to ensure Baylor’s long-term success in response to COVID-19 and continuance of our Tier 1/Research 1 aspirations.
Next steps
As the Board of Regents considers the proposed FY20-21 budget during this time of great uncertainty, we realize that many of our financial assumptions are based on projections and unknowns. We must be prepared, for instance, to take further budgetary actions and sacrifices if the economic situation becomes worse than anticipated. Similarly, if economic conditions improve at an accelerated pace, we may be able to rescind some of the financial measures we have put in place.
During our weekly calls with the Board since mid-March, we have benefited from the experience and expertise of our Regents, who also are managing this pandemic from their leadership roles in business, education, law and churches. One non-negotiable throughout these conversations has been the desire for all of us – Regents, administrators, faculty and staff – to be good stewards of the 175-year Baylor legacy entrusted to us.
We will provide our customary summary of the Board of Regents meeting to you next Friday afternoon. As part of this summary, we anticipate sharing more details regarding the FY20-21 budget, which pending approval by the Board of Regents, would go into effect June 1.
Thank you, again, for your continued dedication to Baylor and your selfless service to our students. I remain optimistic about our collective future because of the responsible, proactive decisions we have made regarding COVID-19. Baylor truly has a special place in higher education and for His Kingdom.
Sincerely,
Linda A. Livingstone, Ph.D.
President