Financial Report

Sarah Lawrence College benefitted from the improving economic conditions that were in evidence when the 2009-10 fiscal year concluded in May. The College’s net assets, or total assets less liabilities, equivalent to net worth or equity, grew from the prior year’s low of $96.5 million to $104.2 million at year’s end. While this improvement was largely fueled by an improved investment picture, it was also supported by the College’s ability to generate a small operating surplus and continued successful fundraising. The College's cash liquidity remained strong throughout the fiscal year.

Operations

The College posted a $638 thousand operating surplus in 2009-10; an improvement of about $1.5 million over the $1 million deficit projected at the beginning of last year. In spite of two years of difficult economic news, The College had also generated a surplus from operations the year before. Last year’s improvement was largely the result of significant cost-cutting undertaken by the College community during the external financial crisis.

Investments & Endowment

The College’s long-term investment portfolio is managed by the Commonfund. The objective of the College’s portfolio is to provide that future growth is sufficient to offset normal inflation and reasonable spending, thereby preserving the purchasing power of the endowment. The College’s portfolio is highly diversified, and the overall investment performance of the portfolio has been consistent with its benchmarks. During the last fiscal year, financial markets rebounded somewhat from the record lows of spring, 2009, and the College’s investments regained some of the ground lost in the previous year. We experienced an investment gain of $9.1 million for the year, along with new gifts to endowment totaling $4.6 million. After subtracting out the spending draw of $5.9 million, the endowment ended the year at $66.8 million versus $59 million the year before.

Debt Refinancing

The College successfully restructured its debt during the 2009-10 fiscal year, refinancing from auction rate debt to fixed rate bonds, and thereby significantly reducing its vulnerability to the event of a rise in interest rates. Total indebtedness stood at $46.8 million.

Challenges Ahead

Sarah Lawrence, like all small colleges, will continue to face the challenge of maintaining excellence in the face of an uncertain national economy. The financial pressure on students and their families will probably not diminish in the near term. However, the College is well positioned to meet these challenges. We are completing a major strategic planning initiative which will guide the College’s planning for the next decade. We are confident that our solid plan, our strong donor support, and our experienced leadership should maintain Sarah Lawrence’s financial stability and strength going forward.

Joseph Giovannelli
Vice President for Finance and Operations
January 31, 2011