A Message from President Steven Knapp

Feb. 24, 2009

To The George Washington University Community:

Here in Washington we are still feeling the excitement of the inauguration and of GW's role in that historic event. At the same time, however, we are keenly aware of the remarkable and in many ways unprecedented economic circumstances in which we live. Many people knew last year that a difficult period was approaching, but few predicted the dramatic level of decline the nation faced in 2008. The outlook for 2009 does not point to an immediate recovery, and a number of you have been asking, understandably and wisely, how our University in particular is being affected by the current economic downturn.

Each university has its own unique set of circumstances. Endowments, including ours, have been affected, and some institutions, as a result, have announced hiring freezes or other austerity measures. As you know, the size of our endowment relative to our budget means that our operations are not as dependent on endowment payout as is the case at some universities. Moreover, through sound planning, conservative investments, and, frankly, a measure of good luck, we currently enjoy a level of financial liquidity that is consistent with our continuing the progress envisioned by our campus plan and required by our academic aspirations.

We are taking prudent action to ensure that we remain in this position and will be prepared in the event that the crisis becomes even worse than is suggested by current indications. Earlier this month, the Board of Trustees took steps to restructure our borrowing program in ways that would further strengthen the University's financial position. Above all, we are monitoring the key factor in this equation: student demand. Currently, our enrollments are strong across the board, and our applications for next fall are stable in every area. The quality of the students applying to our University continues to inspire and impress us all. This gives us cautionary confidence to stay the course and continue investing in the implementation of our Strategic Plan for Academic Excellence.

Some may wonder why, despite our current status, we are not taking preemptive action by instituting, for example, a freeze on hiring or construction. A key consideration is the fact that GW is currently experiencing tremendous momentum that would be difficult and costly to restart if we prematurely called it to a halt. Our approach instead is to proceed with caution and yet still take the steps necessary to keep our options open. For instance, the Board of Trustees approved planning dollars for a badly needed science and engineering complex; the Board action will allow us to proceed, when the time is right, to take an important step toward realizing our dream of becoming indisputably the premiere research university in the nation's capital. We cannot achieve that status without continuing to invest in our faculty, students, and staff, in part by ensuring that they will have facilities worthy of their aspirations and their talents.

That is not to minimize the fact that many in our community are feeling the economic pinch. In October we sent our students and their families a letter offering assistance if a change in their economic circumstances made it difficult for them to make their tuition payments. We also rescinded the deadline for financial aid applications. At least for the foreseeable future, the liquidity I mentioned earlier will allow us to ensure that students will not be compelled to withdraw because of changes in the economic status of their families.

Of course we must be diligent in monitoring the current economic situation and adjusting accordingly. This is a volatile period, and we take seriously the need to manage financial risks by looking ahead, digesting as much information as possible, and being prepared to change course if and when it becomes necessary to do so. At present, however, we are confident that we can continue to invest in the future of GW and in the quality of the education through which we are helping to produce the next generation of citizen leaders.

Sincerely,

Steven Knapp
President