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Greensboro College cuts called essential

Wednesday, April 22, 2009

(Updated 2:40 pm)

By Joe Killian
Staff Writer

GREENSBORO — When Greensboro College announced staff and salary cuts last week, many at the school were in a state of shock.

The cuts were sweeping and to the bone:

All faculty and staff salaries cut by 20 percent.
Retirement matching and dental insurance eliminated completely.
Eight positions lost, including one professor, from a teaching staff of just 76.

President Craven Williams said he knows the changes won’t be popular, but they were necessary to keep the small private college going.

“Of course, we’re concerned with what effect something like this has on our faculty,” Williams said. “We know that with these changes some of them may feel they need to go elsewhere. But our biggest concern is our students.”

Williams, who is taking a 20 percent salary cut himself, said with unemployment climbing to 11 percent in some parts of the state, the school wanted to avoid raising tuition and continue to provide as much financial aid as possible.

Faculty and staff members wouldn’t talk publicly Tuesday about the cuts. Many said they didn’t want to make themselves potential targets for further cuts but said that they are meeting and talking about how to respond.

Williams said adjunct professors will be covering the classes of the laid-off professor, and most of the school’s 1,100 students should notice no difference in the classroom.

“When we made the cuts, we wanted to be sure to have the minimum effect on classroom instruction,” Williams said. “I think we’ve done that.”

Williams said the school also wanted to protect its lowest-paid, hourly workers — their pay will not be affected by the cuts.

Williams said the school’s bottom line became precarious when the economic downturn and severe drops in the stock market wiped out 40 percent of the school’s endowment, or about $1 million. The school uses about 4.5 percent of the endowment’s earnings for operating costs each year.

“These cuts, these changes, are intended to stabilize our situation financially,” Williams said.

“Without them, we would be put into a critical situation.”

Contact Joe Killian at 373-7023 or joe.killian@news-record.com

Accompanying Photos

Staff photo (News & Record)

Photo Caption: The campus of Greensboro College.

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sandsjunk

April 22, 2009 - 10:12 am EDT

The financial information as reported looks a strange to me. The endowment that lost 40% of its value or about $1 million. I would have thought the endowment was lager than that.

Regardless, the even bigger question concerns the funds derived from the endowment. As stated GC uses "about 4.5 percent of the endowment's earnings for operating costs each year". That seems like a relatively small amount of money.

For sake of argument, assume a $2 million endowment that might have yielded 8% or $160,000 annually in earnings. Take 4.5% of those earnings and you end up with $7,200 dollars thrown into the pot for operating costs each year. Hardly the deal breaker to force a 20% across the board salary cut in order to maintain operations.

Perhaps the reporter meant to say 4.5% of the endowment and not the "endowment's earnings" were used for operations. That would indeed be a more significant amount - although I'm still baffled by the size of the endowment as a whole.

Gray

April 22, 2009 - 11:14 am EDT

I'm assuming that the reporter meant to say that 4.5% is drawn off of the endowment each year. That would be $2.5 million x 4.5% = $112,500. Not a tiny amount, but not enough to justify eliminating eight positions, cutting pay 20% across the board, and dropping retirement matching and dental plans.

Other commenters have mentioned the high salary paid to the university president. Since he is claiming to take a 20% cut as well, why not mention what his salary is in relation to the endowment hit the university is taking, which according to the numbers in the article is only around $100,000?

jmoffat

April 22, 2009 - 11:32 am EDT

There's no way of mentioning his salary unless he offers that himself. This is a private institution and, therefore, he has no obligation to discuss that information. And BTW - has Erskine or any of the UNC presidents taken such a hit to their salaries? As a GC alum, I am hopeful that the college continues on strong.

Gray

April 22, 2009 - 12:14 pm EDT

Just like you said, there is a way of mentioning his salary: ask him.

If he'd like to disclose his salary while taking credit for cutting it, that's fine. But if he in fact gets a high salary even after the 20% cut, then letting him just mention the cut doesn't provide the most helpful context.

Panacea

April 22, 2009 - 12:25 pm EDT

It is the height of bad taste to ask a man how much he makes.

He is not a public servant and has every right to keep that information to himself. At least he is sharing the pain with the rest of the faculty and staff by taking the same 20% pay cut. Too many administrators would not take any cut at all, and aren't.

All the numbers on the endowment are guessing games unless you know how much it is.

I don't work at GC or know how much their faculty makes to know if they think the solutions are fair. They have my sympathies: I have been fearing a salary cut at my job and have been lucky so far--administration has found other places to cut and most of the cuts I agree with (travel, expendable supplies, and major capital purchases).

Wages are always the single biggest expenditure, so those cuts do make some sense. Since GC is a private school, they don't get a big part of the budget from the state like UNCG or the community colleges do.

jcialone

April 22, 2009 - 1:38 pm EDT

Yes, very bad taste. I am a graduate of GC and know Craven Williams. It doesn't matter what he makes, we're missing the issue entirely. I can tell you as someone who hs worked in higher education for 14 years as several colleges, there are folks who make way more than GC is paying for a president. Ask the top people at public institutions that get your tax dollar if they are going to take a cut to help the students.

The students are the main focus. If Dr. Williams is making cuts, it's because it is the best thing for the students and the financial health of the college. Being private, the majority of the colleges revenue come from tution dollars. Other than federal student financial aid, which goes directly to the student, GC doesn't have the luxury of getting the state funds to operate under.

John Robinson

April 22, 2009 - 1:57 pm EDT

In fact, we asked Williams. He declined to say, and his salary is private.

gsoreader

April 22, 2009 - 2:05 pm EDT

Per an post from an earlier article:
According to the Chronicle of Higher Education 11/16/2007 "Baccalaureate institutions Craven E. Williams, Greensboro College (N.C.) 1 $1,704,582" That is the highest annual income for a president of a Baccalaureate Institution.
20% of his salary is $340,916.40

Here are the current chancellor salaries for some of the UNC schools:
UNCG $315,000
UNC $420,000
A&T $265,200.00
NCSU $390,835.00

per an article in the News & Record:
http://www.news-record.com/content/2008/06/16/article/chancellor_of_uncg...

jcialone

April 22, 2009 - 5:40 pm EDT

According to the USA Today - http://www.usatoday.com/community/profile.htm?UID=ca617b94859be53c&plckC...

Top-paid presidents at private universities (based on 2006-07):
David J. Sargent, Suffolk University, Boston ($2,800,461)*
Henry S. Bienen, Northwestern University, Chicago ($1,742,560)
Lee C. Bollinger, Columbia University, New York ($1,411,894)
Shirley Ann Jackson, Rensselaer Polytechnic Institute ($1,326,774)

Gray

April 22, 2009 - 6:02 pm EDT

Yes, but you're comparing apples to oranges. All of those schools have graduate programs, while GC is a four-year college only. Even without the much greater complexity, larger campuses, greater diversity in programs, etc., enrollment at those schools is much higher. Total enrollment, according to Wikipedia:

Suffolk: >9000
Northwestern: 18,028
Columbia: 24,820
RPI: 7,521

Greensboro College: 1,233

Gray

April 22, 2009 - 3:34 pm EDT

While his salary is private, a bit of search reveals that his salary information for the 2005-2006 fiscal year is available:

http://chronicle.com/weekly/v54/i12/12b00301.htm

My point is not that he has to make the information available, only that it is absurd to give him credit for taking a pay cut when he is unwilling to specify how much that actually is and how much he still makes.

Gray

April 22, 2009 - 3:53 pm EDT

The endowment numbers are guessing games...except that the numbers were specified in the article, at least in approximate terms: ". . . wiped out 40 percent of the school’s endowment, or about $1 million."

Again, there's clearly more to it than this article states. A $1 million reduction in endowment does not necessitate cuts as drastic as these. Even assuming a 10% return, that's just a hundred thousand dollars in funding each year--far less than the cost of eight positions, 20% of other salaries, dental coverage and retirement matching.

Other explanations--like, say, poor strategic decisions--could explain these cuts, but instead the reporter takes the university president's statements at face value.

FordP

April 23, 2009 - 5:23 pm EDT

I have to think that the endowment figures as quoted in the N&R are wrong - You can't run a school on earnings off of $1.5 million, let alone $2.5 million. USNews & World Report has the endowment at $26 million, so either they lost 4% ($1 million, which wouldn't be that bad) or they lost $10 million, (about 40%). The average college endowment loss through January was around 25%, so GC was hit pretty hard..

migms530

April 22, 2009 - 6:28 pm EDT

Actually, the president of Greensboro College is a public servant. The college is a nonprofit and therefore the salaries of all highly compensated employees are a matter of public record. The college does receive state and federal funding. The median salary for a president of a public university is $427k; of a private college approx $527k. http://www.newsobserver.com/1366/story/1297726.html. Erskine Bowles' salary is less than $500k. Craven Williams is the among the highest-paid college presidents in the U.S. The Chronicle of Higher Education reports his compensation as $1.7 million. http://chronicle.com/weekly/v54/i12/12b00301.htm. Greensboro College faculty salaries are among the lowest in the state, yet the faculty & staff's pay cut is the same % as the president's. Although the president says the cuts are not affecting hourly-paid workers, many hourly workers have been laid off and others have had their work schedules drastically reduced.

brokenback

April 22, 2009 - 9:02 pm EDT

I think the time for considering bad taste is long gone. How about considering bad judgment? If you aren't a faculty member (or staff for that matter) at Greensboro College, you can't know the details. Of 49 institutions in NC, many of the Greensboro College faculty's pay is rated 48th! You are correct, Dr. Williams doesn't have to disclose his compensation. Unfortunately for him, it's a matter of public record. According to the Chronicle of Education, his salary is #1 among Baccalaureate institutions. As a matter of fact, you can take #s 2,3, & 4 and add them together and still not come up with his salary! His salary is higher than Erskine Bowles! How much money has he raised lately? I believe the number of gifts is $1 million less than last year. Maybe that's because people are tired of it going toward his houses, maid service, car, laundry, etc.

So, when and if your salary is reduced 27% (yes 27% when you figure 20% cut in salary and 7% cut in matching retirement funds are considered), you'll certainly have our sympathies, too.

Oh, and by the way, about all those "lowest paid hourly employees" that he supposedly saved from having their salaries cut is just a PR stunt. Most hourly employees were conveniently considered salaried and therefore had their salaries cut anyway. Someone really ought to let the Methodist Church know how they are being represented.

connieohyeah

April 23, 2009 - 1:15 am EDT

I'm sure the Methodist Church knows, but Craven has also taken several steps away from it, so the UMC probably doesn't really care all that much.

connieohyeah

April 22, 2009 - 4:38 pm EDT

40% of endowment = 1 million! Ha! What's Craven been up to?

Joelle

April 22, 2009 - 5:27 pm EDT

Recently I think he is maybe busy writing some positive comments on news-record.com.

GCalum

April 23, 2009 - 9:48 am EDT

I am a graduate of Greensboro college and love the institution dearly. It pains me to see that one of the oldest colleges in NC is struggling to keep her doors open. However, she has survived much worse in her history and will get through this.

First of all it does not surprise me that GC's endowment is as low as it is. We have not seen any major donations since perhaps the generosity of the Royce Reynolds family or the Campbell family in the late 1990's and early 2000's. So to answer the earlier comment, yes, the endowment IS that low.

To answer the question about President' Williams salary. It can be found any number of places - The Chronicle of Higher Education and in the Methodist Church's publications and reports. At one time he was the highest paid president (with salary, housing allowances, car allowances, health, retirement) then any other private college or university president in NC. He was paid more then even Wake Forest or Duke who have much bigger endowments. It is quite feasible that he is still ranked in the top few with regards to compensation.

I have many friends who work at GC - many of whom are alumni as well. Some of them have master's degrees and started with salaries in the mid 20,000. Using a 2.5% salary increase that the college has given on average over the past few years, many of the younger staff are now making LESS (with the 20% cut) then what they were making when they started 6-7 years ago. I'm worried how these young professional will survive.

Perhaps the college should reevaluate the purchase of the price complex ( the old GTCC) campus and put that property up for sale.

ConcernedAlum

April 26, 2009 - 12:57 am EDT

Since GC is a nonprofit, all tax returns can be viewed at guidestar.org including the top five paid staff, faculty, and officers, respectively.

wolfpackgrad

May 10, 2009 - 12:58 pm EDT

As an Alumni of this college I can say with concrete evidence that the college needs an overall in order to survive. I personally sat in a classroom 2005-2006 that had cardboard for windows while abstract art and useless furniture was put in the hallway where the English classes were held. It would seem to me that the priorities of Greensboro College are not clear and the staff (which includes the President) are not displaying productive results that would warrant the salaries they receive. I strongly suggest to the Board of Directors to terminate the contracts for the present administration and start from scratch with people who will spend their energies proving their worth by getting this college back on track. I have seen this before and I can promise you, if these steps are not taken, this school will close and everyone in control now will point fingers at everyone else for the blame while the Alumni, students and parents stare in awe at the demise of this school. Thank god I graduated with a MA from a University that understands the meaning of good administration (NCSU).