For the upcoming fiscal year beginning July 1, 2020 and ending June 30, 2021, the University is projecting a $100 million loss in revenue compared to the original budget plans, according to a letter to the Notre Dame community Monday.
These losses will be due to “increased financial aid expenditures, flat endowment payout, lower auxiliary revenue and projected lower levels of philanthropy,” the letter signed by University President Fr. John Jenkins, provost Thomas Burish, provost-elect Marie Lynn Miranda and executive vice president Shannon Cullinan, said.
The University also projects a $44 million loss in revenue for the current fiscal year which ends June 30 due to the prorating of spring undergraduate room and board fees and the loss of auxiliary revenues from the Hammes Bookstore, campus dining outlets, the Morris Inn and more after the campus closed down.
“In an effort to mitigate this immediate impact, we, as an institution, enacted a series of measures including freezing staff hiring, stopping or postponing several capital projects and eliminating University-sponsored travel and non-essential spending,” the letter said.
In addition to the loss in revenue in the 2021 fiscal year, the University expects to continue to suffer from financial challenges after this year. While the University holds a sizable endowment, the letter said Notre Dame cannot simply direct endowment funds to recover from revenue losses.
“The endowment is not a single unrestricted fund that can be utilized when we face budget shortfalls,” the letter said. “The endowment is a collection of almost 7,000 individual funds, most with restrictions created by binding donor agreements that allow us to use the earnings from those funds only for specific purposes, such as financial aid, a professorship or a lecture series.”
In order to offset some of the losses for the 2021 fiscal year, the University plans on considering a number of actions. In terms of salary actions, no faculty and staff will receive salary increases until further notice, and senior leaders at the University will take a salary reduction of 5 to 20%.
Units across Notre Dame have prepared for 5% budget reductions, and all units will be asked to prepare for a 2.5% budget reduction for the 2021 fiscal year and a 2.5% budget reduction for the 2022 fiscal year, the letter said.
The University froze staff hiring in March and will continue to do so until otherwise indicated. While other Universities have already announced the reduction or elimination of the employer 403(b) match for the 2021 fiscal year, Notre Dame will consider this option by holding listening sessions with faculty and staff.
“If we were to reduce any portion of the match for a period of time, we would not do so before January 1, 2021,” the letter said.
The University leaders said they hope to prevent against furloughs by creating a job bank strategy for staff members.
“At this time, we are creating a job pool in the hope of repurposing as many staff members as possible with no or limited work to other units with heightened needs,” the letter said. “For example, we are considering the possibility of reassigning staff who would clean instructional spaces between classes and assist as ushers in large classroom buildings at times of peak activity.”
