May 23, 2009
Good morning, friends. Welcome to Sammenkomst, the time alumni of the College set aside to hear a message about the state of the College and to present our gifts in support of St. Olaf. I am here today not only as the President of the College but also as a proud member of the record-setting 35th reunion class, the Class of 1974. But you’ll hear more about that later. Suffice it for now to say that Oles everywhere support our College in any number of ways — by urging high school students to consider applying to St. Olaf, by hosting St. Olaf students on music tours, by providing internships at their companies and organizations, by organizing alumni events and by serving as our most potent marketing force when they affirm to their friends and neighbors, to their congregations, and to their business associates the value of their St. Olaf experience. Oles also support the College through their philanthropy. One of the marks of a great college, as distinct from the many merely good ones, is the passion of its graduates, whose time at the college was made possible by gifts from previous generations, who preserve that same opportunity for future generations through their gifts. Today we see and celebrate the concrete expression of your passion for St. Olaf in the gifts given at Sammenkomst.
But before we do that, I’m glad to have this opportunity to describe the state of our College as we close the 2009 academic year. I begin with what I’ll call the Main Things. St. Olaf is a relatively complex organization with initiatives, programs and endeavors that reach literally around the world. These are all important in their way and we must attend to them, for everything we do we want to do well, but it is equally important that we keep our sharpest focus on the things that matter most, and these are (1) the excellence of our academic program; (2) the vibrancy of our residential community, which includes, centrally, our identity as a Lutheran college; and (3) our ability to gather together the resources required to accomplish our mission over time.
First, academic excellence. We have just enrolled the Class of 2013 whose memberswill arrive as first-year students next fall. From an applicant pool of 3,900 students we admitted 2,220 students, or 57 percent of them. Eight-hundred and two of those admitted students accepted our offer and have paid their enrollment deposits, for a yield rate of 36 percent. Let me pause a moment here to say that lowering our acceptance rate is not a top priority of the College. It is likely to drop lower as more and more students apply, since the number of spots in the first-year class is fixed, but we are not going to engage in marketing or other kinds of efforts merely to drive up the number of applicants so that we can exult in the number of students we disappointed by refusing admission. What matters is not how many students apply so much as the quality and breadth of those who do. We don’t have the lowest acceptance rate among America’s leading colleges, but we certainly have one of the best entering first-year classes. Thirty-nine members of the class are National Merit Scholars. The average high school GPA of these students is 3.65, 10 percent of them graduated first or second in their class, and 22 percentof them earned a 4.0 grade point in high school. In short, these are some very bright young men and women.
We are a national, not a regional college. Fewer than 50% of the class (48 percentto be exact) comes from Minnesota. The rest come from 44 other states, including 21 from Washington state, and nine from Alaska. Thirty-two members of the class are four-year, degree-seeking international students, including 10 from China, five from Norway, two from Tanzania, and others from Bangladesh, Ecuador, France, Thailand, the United Kingdom, Vietnam, and Turkey. One of the requirements of an excellent college in America today is that it provides a diverse learning environment for its students. Students who graduate from college now and in the future will spend their working lives, and will dwell and raise their families, in multiculturally rich environments. Graduating students who have no experience with such an environment, and who carry with them no competencies to enable them to flourish in such environments, is like graduating students unable to do math. I’m happy to report that the Class of 2013 contains one hundred five domestic American multicultural students. I think it’s safe to say that next year St. Olaf will have more multicultural and international students enrolled than at any time in its history. That’s a good thing, and it’s a key measure of the quality of the education we offer.
Obviously, simply admitting well-qualified students isn’t enough to demonstrate academic excellence. Those students have to leave the College four years later launched in successful careers. What happens to students in the years immediately after graduation is notoriously hard information to capture, but we do have some hard data, and it is very impressive. According to the National Science Foundation’s Survey of Earned Doctorates, St. Olaf ranks No. 1 in mathematics and statistics, No. 2 in religion and theology, No. 3 in art and music, No. 3 in foreign languages, No. 6 in chemistry, No. 8 in physics, and No. 10 in biological sciences among the nation’s 213 baccalaureate colleges in the number of graduates who go on to earn Ph.D.s. These are significant statistics, because they represent a third-party endorsement of the quality of the education our students receive. Graduate schools can admit students from anywhere, yet they consistently prefer Oles. Another third-party endorsement is provided by the selection committees for the Rhodes Scholarship. St. Olaf has had nine Rhodes Scholars. Since 1996, the College has produced more Rhodes Scholars than any other liberal arts college in the nation. Two St. Olaf seniors were selected in the 2008 awards competition. In a typical year, about 33 percent of our graduates go to graduate or professional school, about 12 percent volunteer in such organizations as the Peace Corps, the Lutheran Volunteer Corps, or Teach for America where again their selection for these competitive programs constitutes a third-party endorsement) and the rest find employment in the private sector.
The curriculum of the College continues to evolve in response to advances in knowledge and pedagogy. Perhaps the most exciting addition to the curriculum for next year is the Science Conversation, which brings together students and faculty with a broad range of academic interests for a critical exploration of science within its historical, cultural, and social contexts. The program will encourage a philosophically and theologically informed appreciation of the development of science, the relationship between reason and faith, questions of meaning and purpose, and the complex interplay of science and society. It is designed to illuminate the distinctive character of science and its relevance to the challenges facing our world. That brings to four the number of “conversations” in our curriculum, including the Great Conversation, an integrated sequence of five courses taken over two years that introduces students to the major epochs of Western tradition through direct encounter with significant works; the American Conversations, a four-semester program that studies the conversations that have shaped the history and culture of the United States; and the Asian Conversations, a sophomore-year option that includes language study, a January interim in China or Japan, and a series of classes on the movement of people and ideas throughout Asia.
St. Olaf remains a college with a robust general education requirement. We require students to complete courses in the humanities, social sciences, natural sciences, and fine arts, including courses with an emphasis on writing, oral communication, and quantitative reasoning. We require foreign language study and the study of other peoples and cultures. We require a course in the Christian Bible, a course in Christian theology, and a course in ethics.
We have hired 10 new faculty for next year. Given the age of our current faculty, we expect significant turnover in the next decade, and a challenge facing the College is precisely how best to renew the faculty as retirements occur, taking advantage of advances in scholarship so that we bring cutting edge research and pedagogy to the Hill will retaining the distinctive character of our College. I think it’s fair to say, and I hope what I have just said demonstrates to you, that the academic program of the College remains excellent and that we are on track to preserve that excellence for future students.
Most people who reflect on St. Olaf identify its sense of community as one of our core strengths. This sense of community is palpable on campus, but it is difficult to pin down its constituent parts. Certainly, though, our identity as a Lutheran college underlies everything. Among the top 50 colleges in America, including St. Olaf, only a handful can match, and none exceeds, our living, meaningful connection with a faith tradition — in our case the Lutheran tradition — that shapes the conversation on campus every day and adds to the excellence of the academic program a rich set of resources to assist students in their faith journey and encourages them in their process of spiritual and vocational discernment. Through daily chapel — which all of you are invited to join on the Web during the academic year — Sunday worship — also streamed on the Web during the academic year — and a host of other college programs, we keep alive the conversation about faith and values that many of you remember as a central part of your St. Olaf experience. On average, about 130 students, faculty and staff attend daily chapel, and Sunday worship in Boe typical draws about 400 congregants to our services. We are committed to preserving — and to enhancing wherever we can — this part of our life together.
But it’s not just our Lutheran tradition that shapes the sense our community. We are a residential college and well over 95 percent of our students live in the residence halls on campus. Preserving that residentiality is key to preserving the St. Olaf community as we know it. Some students will always live off-campus for a variety of good reasons, but we remain committed to the goal of aligning the size of our student body to our capacity to house them so that we never have to ask a student to live off-campus merely because there is no room on the Hill. Thirty-one percent of the students entering St. Olaf next fall will be continuing a tradition begun by another member of their family — a mother or father, a grandparent, or a sibling. We’re pleased at this number, which represents yet another third-party endorsement of the quality of the community we offer, just as the third-party endorsements I mentioned earlier validate the quality of the academic experience. We are, I think, well positioned to continue and to build on these strengths, and we are agreed on the importance of this aspect of the St. Olaf experience.
The third Main Thing is being able to sustain over time the program of the College: in other words, to accomplish our mission. This is where our most significant challenges lie. The plain fact of the matter is that we cannot charge a Comprehensive Fee high enough to cover the costs of providing a St. Olaf education. Our operating budget next year will be $115 million. That includes everything: paying the salaries of faculty and staff, heating and lighting our buildings, providing financial aid to the 84 percent of our students who receive it, providing meals in the caf, and so forth. The comprehensive fee next year will be — prepare yourselves — $43,700. Our price increased 3.5 percent from this year, one of the smallest increases among private colleges in the upper Midwest and the lowest percentage increase in our comprehensive fee since I was a senior at St. Oaf in 1974. But that’s still a lot of money. Now, if every student paid $43,700 to attend St. Olaf next year, we would be able to fund our operating budget and set aside about $15,000 for the future, but of course that won’t happen. Most of the financial aid we provide comes in the form of a pure price discount. In other words, we simply don’t collect the full amount of the comprehensive fee from those students. As a result, tuition and fees paid by our students and their families only account for about 70 percent of our annual operating budget. That means we must raise another 30 percent each year simply to balance our budget. Fortunately, we are assisted in that endeavor by our endowment, which next year will fund about 10% of the operating budget. That brings to 80 percent the amount of the budget that is funded. Partners, our annual fund, raised $4 million last year and we are on track to raise another $4 million this year — in defiance of the economic downturn and the experience of most other colleges like us with their annual funds. Oles have stepped forward in support of the College in an absolutely remarkable way, and I offer my personal and heartfelt thanks to everyone here who has been part of that effort.
Unfortunately, and as all of us know who have had the courage to open our retirement account statements lately, the global recession has reduced the value of most everyone’s investments. Our endowment reached its peak last spring at $335 million, which sounds like a lot of money but, in fact, is a very small sum for an institution of our size and quality. When you compare endowments of colleges, you have to divide the size of the endowment by the number of students to derive the “endowment per student” number, which is the key indicator of the college’s ability to support its program with funds other than those derived by tuition and fees. Today our $335 million endowment has been reduced to $240 million. It will come back eventually, but in the meantime we know now that over the next five years the amount of our operating budget that we can expect the endowment to support will decline from 10 percent next year to about 7.5 percent by fiscal 2014. At the same time that we are losing that source of revenue, we will be less able than we have been in the past to raise our price to generate more revenue. Nor should we. Even though it ranks among the top 50 liberal arts colleges in America, St. Olaf is not among the most expensive. We are — comparatively — a bargain for the price, considering the quality of the experience we offer. Nevertheless, families cannot continue to absorb in the next decade the kinds of price increases we have been able to sustain in the last decade. So, we face declining revenue from tuition and fees and declining support for the budget from the endowment. Certainly, we will work hard to control our costs — we have reduced the non-compensation portion of our budget for next year by $1.5 million, for example — but we will continue to be challenged, and increasingly so in the coming decade, by increasing costs, increasing expectations for programs and facilities by our students and their families, and declining revenue from two of our principal sources — the comprehensive fee and the endowment.
You can see where this is headed. We are going to be increasingly dependent upon gifts — both to the endowment and to the annual fund — for our operations. Our Number One philanthropic priority is gifts to the endowment to support financial aid for students. If we can reduce the amount of the annual budget that has to go to pay for financial aid, shifting that cost instead to the endowment, we can see a clear path forward toward economic sustainability for St. Olaf College and we can keep St. Olaf affordable for a broad range of students from all over America and, indeed, the world.
By successfully funding and completing Regents Hall, we have taken an important step forward in securing the future of St. Olaf. This new building for science and mathematics propels the academic excellence of our programs in those areas, energizes our student recruitment efforts, and creates a magnificent new green space on the south quadrant of campus. I do not anticipate any more major new buildings anytime soon at the College, but we do have one bit of unfinished business, and that is the renovation of the old science building, which sits at the heart of the campus facing Boe Chapel and Buntrock Commons across the green. That is an approximately $22.5 million project, and the Board of Regents is currently considering what our best options are to move that project forward while retaining the strength of our balance sheet and protecting the cash flows represented by our operating budget.
St. Olaf is weathering the current economic storm well. Because we did not depend upon our endowment for more than 10 percent of our operating budget, the decline in our investments did not deal a crippling blow to us. We were able in a down economy to recruit a robust class of students and to meet our revenue goals, and we were able to reduce our operating budget by over a million dollars without cutting the people and programs that drew our students to us in the first place. We have some debt, but expenditures on our debt service constitute less than 5 percent of our annual budget, so it is manageable. Our balance sheet is strong, and our credit is good. We know who we are, we know what we do well, and we are focused on the Main Things that drive our success. We have an experienced senior team, a President who plans a lengthy term of service, and a faculty committed to the mission of the institution and to our students.
That is the state of St. Olaf College in May of 2009. We are inheritors of the good work of the generations who came before us, and we are the stewards of this place for the generations that will follow us. We are about to receive the gifts from our 50th reunion class, from our graduating seniors, and from all of the classes in between, that represent our commitment to preserving this wonderful college. Please accept my heartfelt thanks for your support of our College and my best wishes for a memorable reunion weekend. Welcome home.
David R. Anderson ‘74