05/09/08

When Kansas officially became a state in 1861, Baker University’s roots were already beginning to take hold in Baldwin City.

Over the past 150 years, the university has seen and endured many downturns in the American economy.

The Stock Market Crash of 1929. The Great Depression. The Reagan Recession. Over the last 150 years, Baker University has managed to survive each economic crisis that the United States has faced.

However, thriving as an institution has not always been painless.

In the early 1980s, the American economy faced a severe decline, the so-called Reagan Recession, which hindered financial growth for nearly 16 months. The unexpected downturn was the worst financial crisis this country had seen since the Great Depression.

During this difficult economic time, Baker had to face fiscal difficulties of its own.

Starting in 1980, Baker’s student enrollment began to plummet and those roots that had been very secure were about to be shaken.

The School of Professional and Graduate Studies was not even in the works, nor was the School of Nursing. The College of Arts and Sciences was Baker’s main source of income, and tuition was the backbone of its financial portfolio.

With resources dwindling, changes had to be made to ensure the school’s stability through this economic crisis.

As teaching opportunities disappeared across the country, prospective scholars were pushed into the workforce and away from the classroom.

At Baker, Professor of Philosophy Donald Hatcher, a non-tenured professor at the time, found himself heading a committee that would work toward a solution to reduce expenses and reallocate university funds.

The committee had to look at individual faculty positions, departments and programs to determine who or what had become an expendable asset.

Hatcher said the committee had to produce a report that relied on three factors for evaluation: contribution to the university’s mission, quality and market viability.

“It was a horrible thing – a gut-wrenching experience,” he said. “I was heading a committee that had to determine the importance of other professors’ jobs.”

The final report laid out several recommendations for the university that were quickly enacted.

The first step was the elimination of all adjuncts and part-time employees. Then, the university eliminated the home economics degree before finally releasing two full-time professors.

While these changes seemed drastic at the time, they were necessary for the university’s overall health, Hatcher said.

“They were totally economic decisions,” he said. “The professors who were released had low enrollment in their classes so it made sense. Times were tough, but things had to be done to help the university.”

Baker’s roots began entrenching themselves in Baldwin City’s soil once again, and the financial shaking turned into a less dramatic sway.

In the summer of 1987, those roots starting growing deeper as a significant addition was made to the Baker community.

On May 1, Dan Lambert and his family arrived in Baldwin City. He would not officially become the university’s president for three months but he wanted to entrench himself into the Baker community.

His goal was to help steady those roots for good and help Baker thrive in the future.

Lambert would not disappoint the Baldwin faithful during his tenure as he oversaw several growths within the university.

The SPGS opened its doors in 1988, followed by the SON three years later and then the School of Education – all of which would prove to be huge financial resources for the university.

Since non-traditional programs don’t have tremendous operating expenses, they can be great sources of revenue for a university. The SPGS leases its locations and does not incur the costs of owning the campus like the CAS, Vice President of Financial Services Jo Adams said.

“The CAS has all sorts of outside expenses that add up. Non-traditional programs don’t because most of the students involved in these programs are adults who have families and homes,” she said. “They don’t need housing or food services to be provided for them so the operating costs are much less.”

As of September 2007, the Baker community has expanded to 3,959 students, but those first roots will always be in Baldwin City and the additions of the 1980s and early ’90s have only made them stronger.

While the additions helped enhance the future of Baker University, the school’s endowment has steadily grown, ensuring financial roots for the future.

When Lambert first arrived on campus, Baker’s endowment was approximately $15 million. After his 19 years as the university’s president, the endowment had grown to more than $30 million dollars.

The endowment consists of many components: stocks, bonds, cash, land and art, to name a few.

If a student receives a scholarship that is named in honor of someone, the means for that scholarship came from the endowment. The namesake of the scholarship most likely made a significant contribution to the university.

The goal of every university is to grow its endowment quickly and efficiently, but smart financial decisions have to be made, said Lyn Lakin, vice president of university advancement.

“We have a very strict spending policy for the endowment, which never includes dipping into the principal amount of the endowment,” Lakin said.

However, at the conclusion of the 2002-03 academic year Baker University found itself staring at a 17.7 percent loss off the endowment. At the beginning of the year, the endowment stood at nearly $34 million but after the significant loss, the final tally was slightly less than $28 million.

Adams said the university did not dip into the principal of the fund but had to finally write off deficit the school carried for a number of years.

“We borrowed money from the endowment at one point, but definitely not from the principal amount of the fund,” Adams said. “Then, we weren’t in a position to put the money back so we had to accept the loss.”

While the damage was significant to the university’s endowment fund, it was not exclusive to Baker, Adams said.

“That situation was not unique to Baker,” Adams said. “Other schools face the same situation at different times. It is not the best situation to be in, but it is definitely not unique to Baker.”

When President Pat Long took over at Baker, she brought Lakin with her to step up the university’s fundraising efforts. In the next few years, Long would like to see the endowment reach somewhere near $60 million.

As of August 1, Baker’s endowment stood at $37,819,997 – a 13 percent increase from the $33.5 million that was reported in 2006.