A hiring freeze is among several precautionary measures Biola will take in light of worsening economic conditions which have hurt the university’s endowment, said President Corey last week in letters to students, faculty and staff.
The university will not be hiring for any unfilled, non-faculty positions until at least March 15, Corey wrote. In addition, positions that have been recently vacated will not be refilled except with special exception, said Carl Schreiber, vice president of finance.
Since the university always has unfilled positions, which in most cases are less critical, Schreiber said this is a good opportunity to save money with little negative effect. Labor related expenses account for about 57 percent of the university’s budget, he said.
Biola’s endowment, which is the total value of its investments, is “millions of dollars less” than it was when the last budget was published in June, Schreiber said. In that budget it was reported that the university had about $60 million invested.
While Schreiber did not provide the specific amount lost, a finance department graph viewed by The Chimes in early September showed the university with about $53.5 million invested. On Sept. 29, however, the Dow Jones Industrial Average suffered its largest one-day drop in history, losing 778 points and sending the economy into a tailspin.
Since then the Dow has suffered several more days of hard losses, and a recession was officially declared on Monday by the National Bureau of Economic Research. The Dow, which measures the average value of 30 of the most prominent publicly traded companies, has gone down around 23 percent since mid-September.
However, Schreiber said he is “not overly concerned with the endowment,” believing the university’s investment strategy is sound. He said it’s important to remember that the endowment is meant for long-term investments, and that pulling out of the market now would eliminate the possibility of gaining back the losses.
Expenses among Biola’s departments will also be tightened in coming months, with approval procedures being required for “major expenses and travel,” Corey wrote. He asked all members of the President’s Administrative Council, made up of top Biola administrators, to meet with their budget managers to plan how they can decrease spending for the duration of the fiscal year.
The cutbacks will mostly be in many small areas, rather than a few large ones, Schreiber said. He said his principle has always been that small expenses add up to big sums.
“Take care of the nickels and dimes, and the dollars will take care of themselves,” he said, crediting his father for the quote.
Schreiber has also been asked to develop “scenario-based budget plans” that would anticipate the university’s budget under a variety of different circumstances. He said Biola wants to be on the “front edge of the problem” so that it is not caught off guard.
Corey has also commissioned the forming of a council that is to help students whose future at Biola is in jeopardy because of extraneous financial hardships. The council is made up of eight staff representatives from around Biola and is headed by Carrie Stockton, director of academic advising and student retention in enrollment management.
Biola’s donors have been asked to contribute to an economic relief fund that the council will be able to tap to help students. However, Stockton said the council is not just “throwing money” at the problem, and will focus more on how to “creatively help students,” such as suggesting that they earn some credits at a community college.
Corey emphasized in an interview that Biola is not in a crisis, and the university is hurting no more than most other universities. Far from just surviving, he said this could be the university’s “finest hour.”
“Moments like these are important for organizations because they help us focus on our core competencies,” Corey said. “Because of our faith and resolve it is only going to make Biola stronger.”
