To Washington University faculty and staff,
We are writing to you today with some encouraging news about the university’s financial health. As you are aware, we have had to make some difficult decisions since this spring in response to COVID-19, many of which have had a direct impact on our faculty and staff. These steps were taken based on the information we had at the time, and now that we’re getting a clearer picture of our financial situation, we are cautiously optimistic that our outlook is improving.
We know many of you have made financial sacrifices during this time. The university has implemented furloughs and layoffs, reductions in compensation for university leaders and many faculty and staff on the Medical Campus, and the suspension of the university’s contribution to the employee retirement savings plan. We remain grateful to our faculty and staff for your sacrifices and extraordinary efforts as we all continue to navigate an unpredictable future.
While we anticipated significant revenue loss and costs associated with the pandemic, we actually have ended the 2019-20 fiscal year very close to the previous year’s results. Key factors leading to this solid performance were a quicker than anticipated return to patient care and stronger than expected research funding. Because of the strong recovery on the Medical Campus, we have been able to end the hiring freeze on the Medical Campus, and restore salaries and compensation for more than 1,700 School of Medicine faculty and staff to fiscal year 2019-20 levels.
In addition, the university’s managed endowment pool has performed far better than expected, showing a return of 9.9% during the 2019-20 fiscal year. This figure, which exceeds our projection by a wide margin, is one of the strongest in higher education, and a testament to the strong leadership of the talented Washington University Investment Management Company team, to whom we are exceptionally grateful.
We are greatly encouraged by these positive indicators, but at the same time, we remain cautious. We continue to expend significant resources to keep our campuses safely open, and there are still a number of unknowns, as we are only a few weeks into the new academic year and the financial picture for the rest of the fall semester is still unclear. We will closely monitor the university’s budget in the coming weeks, with the hope that we will be able to reinstate the university’s contribution to the employee retirement plan and lift the hiring freeze on the Danforth Campus sooner than expected. We will provide another update about timing and other details as soon as we are ready to proceed.
We remain thankful to all of you – our faculty and staff – for your many contributions and your ongoing support of the university. It is reassuring to know we are all in this together.
Andrew D. Martin
Amy B. Kweskin
Vice Chancellor for Finance and Chief Financial Officer