Yeshiva University officials insist they won’t roll back five years of investing that partially led to a $24 million budget gap this fiscal year to balance the books. Instead, they’ll work carefully to slash expenses without harming the core mission of Modern Orthodoxy’s academic and religious stronghold, minimizing the impact on student life.
“We will make no compromises on quality,” said YU President Richard Joel in an interview with The Jewish Week. “We must equip the next generation of Jewish leaders, both lay and professional, with an education that is both of high quality and high Torah content.”
Joel said he knew that the extensive (and expensive) enhancements he initiated when he succeeded Dr. Norman Lamm in 2003, amounting to some $30 million per year, would require increased fundraising, but he could not have anticipated the current worldwide economic crisis.
“The university has always placed its mission first,” said Joel. “When I came on five years ago the mandate I was given … was that it was time to take the next step and do what we needed to be both a great university and a great Jewish university.”
Joel announced the budget gap to trustees last month and said a redrafted version of the $564 million budget would be presented to them for review in late November.
The announcement comes on the cusp of a record year of fund-raising for YU, which took in $104 million, including 30 gifts of $1 million or more.
But the university also has a tall payroll to meet. According to a report in JTA, YU’s faculty in 2006 was the ninth highest paid in the nation, and Joel’s compensation was $619,700.
During his tenure Joel has added 75 faculty positions at the Manhattan-based university, which operates men’s and women’s undergraduate colleges, a rabbinic seminary and business, social work, medical and law schools among other programs.
In 2005, the university launched the Center for the Jewish Future, which, among other things, places rabbis in pulpits, works to strengthen Jewish communities, promotes women’s leadership and supports Jewish professionals.
YU has also invested in infrastructure during that time, including the Glueck Center for Jewish Study, a $32 million building nearing completion in Washington Heights that houses a new Torah study hall and other facilities, and a medical research lab that opened this summer at Albert Einstein School of Medicine in the Bronx.
Joel acknowledges an “if you build it they will come” approach to these improvements, and his fundraising suggests he was correct in his assumption that the more ambition the university displays, the more alumni and other supporters will want to be part of it.
But it remains to be seen if the full cost of the upgrades can be absorbed as planned, and there are those who feel he over-reached.
“We made these improvements knowing that after the first five years we would have to spend the next five years marshaling the resources to pay for it,” says Joel. Given the new economic reality, he said, “what we have to do is double our efforts in philanthropy [outreach] and make some hard decisions we didn’t think we would have to make.”
Joel noted that YU emerged from a bigger crisis in the 1970s, at the start of Dr. Lamm’s tenure, when the university was nearly bankrupt.
“There were no assets and $70 million in debts,” he said. “Through Dr. Lamm’s heroic efforts, and help from Governor [Hugh] Carey, an agreement was made with the banks to resolve the debt at an agreed-upon rate within 30 months, and the university just hunkered down and met that challenge.”
The man charged with closing the current budget gap, newly appointed vice president and chief financial officer J. Michael Gower, said in a separate interview that his mandate is to identify savings that do not impact on the university’s essential goal of providing a first-rate dual education of secular and Jewish studies.
“What we didn’t want to do is just do an across the board view,” said Gower. “We have to take a hard look at those activities, events and programs we were setting up to decide which ones are contributing more to the mission of the university and which ones are maybe not contributing as much.
“There are things we can either stop doing that aren’t mission critical or things we can do differently, more efficiently, or less often.”
Gower conceded that there was no way to know if the unstable economy and rising costs would result in an even greater deficit in coming years.
“We’re going to have to have contingencies,” said Gower. “We’ll have to establish different options and be flexible depending on what’s happening in the investment market and what’s happening in philanthropy.”
He cited many of the university’s graduate programs and the entire religious studies program as most dependant on fundraising because their cost per student exceeds the tuition price.
“The university has always boasted of offering two educations for the price of one, and there’s an economic reality to that.”
Still, he insisted the university would not balance the budget on the backs of students and their families.
“This is not something that’s going to be solved by tuition and other increases. We have to be very conscious of making tuition work right. That doesn’t mean we are not going to ask for some increases but it’s not going to solve the problems as much as slowing down expenditures.”
Gower added that reducing faculty, with its impact on the quality of programs, was not high on the agenda. But he did not rule out consolidating some courses or reducing some staff “on the margins. That is not something where there will be a dramatic change.”
YU is far from alone suffering in these uncertain times, and many universities may be in far worse straits. According to a recent report in the Chronicle of Higher Education, campuses across the country were jarred by the record Dow Jones plunge last week, and nearly 1,000 colleges may be unable to make the payroll after their accounts were frozen by the wobbly Wachovia Bank.
Administrators told the Chronicle they were considering such measures as hiring adjunct professors instead of tenure-track teachers and borrowing money from auxiliary operations such as stadiums and bookstores.
Experts say public and private colleges will suffer disproportionately from the downturn depending on their location, the strength of pre-existing endowments and their ability to draw public money, and whether they will enroll more students seeking better skills as the job market worsens.
Joel said he was confident that even in troubled times YU benefactors will continue to respond because “We have a product that’s non-paralleled.
“This is not the worst time in the history of the Jewish people or the United States and it would be foolish to look at the situation and say, ‘Whoa, all bets are off.’ We have to be leaner and harder and make tough choices.