Since the beginning of the fall term, we have experienced historic occurrences ranging from the election of Barack Obama as our new president to the disruption of our economy at a level not experienced since the Great Depression. The juxtaposition of these events reflects the complexity of our times: a period that requires focus and good will as we address the challenges ahead.
America’s economic downturn and the resulting losses in the stock market have a direct impact on Juilliard. Almost 50 percent of the School’s annual revenue comes from our endowment (the balance of our budget is funded by tuition, fees, gifts, and grants). Although the Juilliard Board’s Investment Committee has done a brilliant job of positioning our endowment so that it has performed better than the stock market overall, the School will have to make a downward budget adjustment in upcoming years, due to the precipitous drop in the value of the market.
In close consultation with our trustees and with faculty and administrative leaders throughout the School, during the coming months we will develop a set of steps to adjust to this new reality. Overall, we will no doubt settle on a plan that involves a combination of income and spending actions—those that address the financial challenge while best preserving our students’ educational and artistic experience, which is our first priority.
Regarding our renovation project, please understand that the funding of this important infrastructure investment is budgeted and paid for through a financial structure that is completely separate from the annual budget. This extensive construction effort does not detract from financial resources that support our annual budget. I am pleased to note that we are on schedule for completion of the project by September 2009.
In the time ahead, while certain school initiatives will need to be tempered or deferred, our principal focus will be on reducing or eliminating non-personnel costs wherever possible. In addition, there is no plan to reduce scholarship awards allocated to currently enrolled students.
In its 103-year history, Juilliard has experienced innumerable challenges. In each instance, the School has emerged as a stronger and more resourceful institution. Adding qualities of increased fiscal restraint to the Juilliard environment will allow us to successfully negotiate the current financial environment. I am completely confident that the impact of the recent economic downturn will be addressed with the creativity, discipline, and determination for which Juilliard is known and admired. I thank you for your support and understanding as we address the issues before us, and I look forward in the new year to reporting to you regarding further plans for the future.
Joseph W. Polisi