Financial Planning Working Groups
February 23, 2017
Dear Members of the Loyola Community,
In the months following my November inauguration address, I have spoken about the critical issues facing higher education today—rising expenses, escalating tuitions, student loan debt, and the general value proposition of higher education. In addition, state and federal budget uncertainty—including MAP grants that close to 2,400 Loyola students rely on—creates added pressure on families and the University budget. All of these tensions continue to fuel the arguments of those who question whether a college education is worth the financial investment and truly prepares our students to be productive and engaged members of our society.
At Loyola, we know that we cannot continue to rely on raising tuition rates as the principal source of funding our increases in expenses. We have a responsibility to ensure that as many students as possible have access to a transformative education. So, we must ask ourselves how we can balance the requirement of careful fiscal stewardship with our institutional mission.
Over the past eight years, our expenses have continued to increase at a faster rate than revenue. Continuing on the current trajectory without making significant changes will result in our expenses exceeding our revenue in the next few years.
The good news is that Loyola is fiscally healthy, but we must do some critical work now to ensure that it remains so. We have built the foundation of a sustainable financial and operating plan to address our challenges—both in the short term and the longer term—by moving to a three-year strategic budgeting process. Now is the time to secure our future by closely reviewing our finances and operations and developing specific action plans for diversifying and growing our revenue through innovative academic programming, enhanced research activities, increased fundraising success, and endowment growth.
During the fall semester, we took the first steps toward a comprehensive review of our operational and fiscal priorities to ensure alignment with our mission, strategic plan, and desired, measurable outcomes across the University. The strategic planning undertaken for “Plan 2020: Building a More Just, Humane, and Sustainable World” continues to drive our work and investment. The Plan 2020 structure is working well, and we will be following a similar model as we roll out this new financial planning initiative.
This month, we established five University-wide working groups to advise the Budget Review Team, composed of senior administrative leaders, on future directions for strategic financial and operations planning. The five groups include faculty and staff representatives, as well as administrative leaders, to collectively assess our current state of operations. The teams will focus on five areas across our University: Academics, Student Development and Academic Services, Human Resources and Benefits, Capital Assets and Facilities, and Operational Processes.
The primary focus for these groups is to study how our academic and business operations support the University mission; advance our current strategic plan; stimulate innovation; and spur revenue enhancement and cost containment to improve the results of operations. The groups have been charged with studying current operations and assessing opportunities for change that could be implemented over a multi-year period. Before or by December 2017, each group will provide recommendations for further consideration.
The goal of moving to multi-year financial planning and modeling is to produce three-year rolling budgets—clearly tying our outcome metrics with our resource allocation and prioritization over a multi-year period.
Again, I want to reassure you that we are a fiscally healthy and sound institution. Because of that position, we are able to both plan for the future and have the flexibility required to modify our business model. This is all about preparing for a future where adaptability and change leadership is imperative.
As progress is made, we will provide regular updates. In the meantime, please find information on the financial planning working groups, including a list of each group’s members, here.
Jo Ann Rooney, JD, LLM, EdD