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2008 Fall Issue 4 (October 17, 2008)

Financial crisis hits Carleton: Residence hall unaffected; completion of Arts Union delayed

October 17, 2008
By DeeDee Rupert

As the American economy continues to face hard times, one might wonder how Carleton will be affected by the growing financial crisis. President Rob Oden and Treasurer Fred Rogers detail ways Carleton is coping and possible future changes.

According to Oden, “Theoretically, the financial downturn [capital market dislocation] hit during June 2007. It has yet to have an effect…”

However, “it would be irresponsible for us not to have a contingency plan,” said Oden. The most likely change to Carleton finance will occur to the Capital Campaign, although, Oden says he is more concerned about the effect on the annual fund than the long term endowment.

The Capital Campaign has a current goal of $300 million dollars which is broken down into 4 categories, “teaching and learning ($90 million), financial aid scholarships ($90 million), facilities ($90 million), and annual fund ($30 million)”. Within these categories, more specific purposes are assigned to the money, for example, within the “facilities” category, $35 million of the total $90 million, is intended for the Arts Union.

The biggest expenditures of the Capital Campaign would suffer first, falling under the “teaching and learning” category or the “financial aid scholarships” categories.

“We do not anticipate any change in Financial Aid policy [instead] the college will most likely slow future hiring and the creation of new staff positions,” said Rogers.

Faculty and staff are further affected on a personal level. They must consider changes in retirement funds. Fred Rogers explains the faculty retirement plan is set up as follows:

“As participants in a ‘defined contribution pension plan’, Carleton faculty and most staff are responsible for and enjoy the benefits of the investment results of their retirement savings.” That is, the college contributes X amount every year and the particular staff contributes Y amount.

“Recently [the amount the staff themselves are contributing] have been declining…” said Rogers.
Besides faculty and staff positions and retirement funds, students will also recognize pre-measures taking place on campus right now. In a recent campus wide e-mail Scott Bierman, Dean of the College said, “… we will not move ahead with asking the Board at its October meeting to approve the development of construction documents [for the Arts Union]. Practically, this means that the completion of Phase I in the Fall of 2011 will be unlikely.”

The date for beginning construction as well as the date for opening of the Arts Union is now in discussion.

Oden assures the Arts Union will continue to be a future plan. “The arts union will certainly happen. It is not possible that it will not be build. The timing will be affected but it is too clear we need it [to drop the project entirely].”

This is the only campus project to be affected thus far. The construction of the two new residence halls continues as of planed thanks to a gift made by Carleton alumni couple, the Cassets.

“We anticipate that [the dorms] will be completed in time for full occupancy in September 2009,” said Rogers.

Through the financial crisis Oden is determined to remain positive. He says, “We’ve been through this before [like during the Great Depression and the endowment fund fall in 2001]”

Oden said, “I ask myself, what would Cowling do?...Cowling was president of Carleton during the Great Depression. He reminded Carleton that we are a great college and will remain so through tough times. He even increased his fund raising [despite the depression.”

Rogers meanwhile stresses the importance of perspective. He says, “this too will pass, and we will ask ourselves – what did I do back then. The answers that matter will not be about what seems so obvious today, but about what is less obvious and which will turn out to mater more in the longer run. Figuring out those distinctions now is the tough work in front of all of us, rather than worrying about headlines over which we have no control and very little involvement.”

Further, Carleton is facing the economic downturn with certain advantages. “We are number 1 for the 7th year in a row for alumnus who participate in the annual fund...[and] fortunately, we are entering the crisis with a 7 million endowment”, said Oden.

In the end, as Oden says, “Carleton will remain Carleton through this.”

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