June 15, 2018
Dear Sweet Briar Community and Stakeholders,
I write today to share that after reviewing Sweet Briar College’s financials in the first two years after the near-closure in 2015 [ending with fiscal year 2017 financials, the year ending June 30, 2017]*, the Southern Association of Colleges and Schools Commission on Colleges (SACS) placed the College “on warning” for one year for FY17 noncompliance with Standard 13.1, Financial resources (Resource Manual for The Principles of Accreditation: Foundations for Quality Enhancement, p.123-125). This standard is defined as, “The institution has sound financial resources and a demonstrated, stable financial base to support the mission of the institution and the scope of its programs and services.”
It is not surprising given the College’s unpredictable financials just two years after the near closure in 2015. That said, FY17 was the second consecutive year for the College to achieve a fundraising record, with philanthropic commitments totaling $21.1 million. From 2015 to 2017, Sweet Briar donors contributed $43.8 million dollars, the largest two-year total in the 116-year history of the College.
Since the close of FY17, the College has been on a trajectory for a strong and sustainable future. In the past year, with your full support, we designed and implemented a tuition reset to lower the discount rate and stabilize tuition revenue without tuition revenue loss. We restructured administrative departments and consolidated academic offerings. In December, S&P Global Ratings raised its long-term rating to “B+” from “B” on bonds issued for Sweet Briar College, with an outlook of “stable.” The rating upgrade reflected S&P’s view of the College’s new board and senior leadership team as well as the actions taken to stabilize the College.
For FY18 we planned for and incurred non-recurring cost for restructuring and severance payments. These expenditures have been within plan, and we expect to close the operating budget, exclusive of these costs, with positive results. The College is expected to meet its FY18 fundraising goal of $12.5 million. Final numbers will be reported 30-60 days after the last day of the fiscal year (June 30, 2018).
For FY19 the College has presented to the Board of Directors a balanced budget, developed from a zero-based budgeting perspective. The College has received 125 deposits (as of June 14, 2018), with additional verbal commitments, for new students in Fall 2018, increasing FY19 new student enrollment by nearly 50 percent over FY18 and projected tuition revenue by $1,138,000. The fundraising burden for gifts and grants in FY19 to support operating expenses will be reduced by approximately 25 percent, according to the College’s multi-year plan to increase operational revenues, such as tuition revenue and auxiliary revenue, while steadily reducing its reliance on donations.
This present warning does not mean that the College’s membership is at risk. SACS will review the College’s financial progress in April 2019, and we are positioned to demonstrate significant stability for supporting the College’s mission as a liberal arts and sciences institution to educate women.
*This sentence was appended on June 21, 2018 to more clearly reflect the time period reviewed.