There is Light at the End of the Tunnel
On Friday, The Forward ran their latest (over) coverage of Yeshiva University with this headline: “Yeshiva University’s Fiscal Crisis Deepens with No End in Sight.”
From the outside, it does, in fact, appear that YU is in a nosedive, plummeting ever farther in credit ratings, debt, and stability. On December 6, S&P downgraded YU from an A+ to an A, citing “prolonged operating deficits, which are still negative on a cash basis and are taking longer than we anticipated to resolve.”
According to Moody’s, “given the ongoing challenges faced by the university, an upgrade or return to a stable outlook is unlikely in the medium term.” According to S&P, “These deficits are now expected to continue for the next three years.”
Employees at YU justifiably fear for their pensions, salaries, and jobs. YU has begun downsizing, from fewer water-bottles given out at events (seriously) to tightening tenure-track hiring. Despite pleas from students and faculty, YU will inevitably cut course offerings and unfortunately raise our too-good-to-be-true low class sizes.
The numbers, which I need not repeat here, speak for themselves. They tell a story of poor planning, of overly optimistic reliance on philanthropy, of running on fumes. Nobody could have anticipated the slough of jabs and upper-cuts YU has faced in the last four years, but report after report do show that the blows would have been mitigated if the university had prepared by settling its finances and taking proper stock of its assets.
The magnitude of this kind of financial crisis does not spontaneously appear with no one to blame but the “markets.” True, colleges and universities are suffering, but as Standard and Poor’s analyst Carolyn McLean told The Commentator, “After the recession, a lot of universities had budgetary and fundraising pressures, Yeshiva’s problems have been more acute.”
It would be difficult, if not misleading, to paint a rosy picture of the immediate future of the university. The Commentator has no intention of ignoring external and internal reports about the health of our university. Students, faculty members, and alumni have the right to know the facts, whether or not they “lower morale,” as one administrator accused us of last month. Our job isn’t to raise morale; our job is to tell the facts. And right now, the facts aren’t great.
Honors scholarships have already been cut. Events have been curtailed. Retirement packages, vital to the turnover health of YU, have been reduced. I commend the President for signaling this new and arduous phase with a self-motivated and significant cut in his compensation, in solidarity with other members of the faculty who have already suffered from pay freezes, but we all know more pain for everyone is on its way.
That being said, I also believe it would be misleading to print an absolutely dire picture of YU. Inside YU, members of the faculty and members of the board of trustees have adopted a counterintuitive confidence that YU will emerge bruised, but a far stronger university by the end of this fiscal fight. While many employees of the university fear what the next few months will reveal, some longtime employees remain optimistic that financial difficulties will force the university to radically improve its infrastructure. Departments will be streamlined across campuses. Top-heavy administration will be cut. Excess real estate will be sold. The faculty, long excluded in the decision making of the university, will once again find a voice. The Banner System, long needed but never ready, will finally help the university balance the books. The university will no longer operate as a corporation—“colleges become universities when they stop caring about students,” one professor quipped—but as a college again.
Don’t believe us; read the reports. Despite the downgrades, both Moody’s and S&P anticipate that YU will recover in the face of short and medium-term credit troubles. It will take three, five, possibly even ten years, but the reports seem confident in the long-term health of YU. This recovery, however, is not guaranteed.
S&P raised doubts, noting, “Sweeping change is unlikely to occur quickly at this large and complex institution” and warning that without real change, “deficits will likely continue and cause financial resources to deteriorate to a point that could result in another downgrade within two years.” Plans to improve performance have “not materialized.” Can President Joel prove the analysts wrong?
“If you stand still you are a going to lose,” President Joel told me in a recent interview “There are two pieces of this next challenge. One is to reimagine what a 21st century university must be, the other challenge is to assure that 21st century university retains its critical role in the civilization by engaging students and scholars in thinking and ideas, and, certainly from this university’s point of view, the value of values.”
President Joel’s challenge is, paradoxically, both preservation and transformation. He must preserve the core of YU while fundamentally transforming the university into a lean and efficient institution. YU can lumber through the next years cutting, sequestering, and freezing, or—possibly and—it can use this opportunity to deliver real change.
President Joel is no stranger to transformational change. During his 15-year tenure with Hillel, President Joel helped the organization achieve exponential growth. The annual budget increased from $14 million to $52 million and the organization opened 26 new facilities to serve students, among many other achievements. President Joel’s successful transformation of YU from lackluster to lodestar was outlined in my previous editorial.
Now though, “we confront the fact that we have built a great enterprise that is not structurally sustainable as is,” as the President said in his recent letter to students. President Joel, a veteran institution-maker, must now be an institution-saver. I believe President Joel, whose very expertise is transformational change, has the leadership capability—and responsibility—to steer this university to safer waters.
But President Joel needs more than just leadership capability. He needs the university—students, faculty, employees, and alumni—behind him, supporting his initiatives in spite of the pain they bring.
President Joel will not succeed with patronizing communications, “I know you want more specific details regarding our next steps,” he said in his two-week late communication to students. “I want to give them to you. You also understand that, despite the desire for instant communication, it is not always the approach that enables us to grow and succeed.”
He will not succeed with fluff: “Why should students be optimistic despite the hard times ahead?” I asked him in an interview on Monday. “They should look at their fellow students, at their rabbeim, and professors, and realize there is nowhere else they can have that. We all need to embrace the challenge that society, the economy and the vicissitudes of the community put on us.”
He will not succeed with reticence: When will you unveil a comprehensive plan?“Not today.” A month, two months? “Not today.” What changes have already occurred? “The ones I have outlined in my letters.”
The president cannot communicate broad changes in missives alone. Will the President communicate changes within the university to students face-to-face? “I will meet with them at our scheduled town-hall meeting next semester.”
We all want to assure that YU remains our flagship institution and that it continues to play a vital role in the Jewish community and beyond. We want to support the administration. We all want to see the light at the end of the tunnel. We can truly show support and loyalty and our hope for a bright future for Yeshiva University if we—the student body—feel that we are, if not partners, than at least not a simple afterthought.