Challenging times call for proven leadership
When COVID-19 struck last spring, it was no time to recruit a new president. To ensure steady leadership, the Board of Trustees and President Steve Bahls agreed to renew his contract through 2021-2022.
“During times of great challenge, there is zero substitute for experienced, wise and calm leadership,” said John Murabito ’80, chair of the board.
“Augustana has seen many crises over its history. And due to strong leaders who have worked closely in support of our mission with faculty, administration, staff and the community, our college has not simply survived those crises, but thrived.
“Under Steve’s extremely able leadership, I have no doubt that will be the case once again. This extension ensures a consistent approach and strategy during and through the challenging times we now face.”
So President Bahls, already having steered the college through the 2008 recession, was asked to not only lead the college through this unprecedented COVID-19 crisis but also emerge stronger.
‘Toughest task in my 24 years’
The 2008 recession was the country’s worst economic meltdown since the Great Depression. Housing prices increased, then fell, due to the subprime mortgage crisis, and the stock market plummeted. Higher education was particularly hard hit.
In the summer of 2009, President Bahls reported on the college’s decline in enrollment, a 25% decrease in the endowment and a slowdown of gifts to the Authentically Augustana campaign.
“The task ahead is daunting — indeed it is the toughest task in my 24 years in higher education,” President Bahls said at the time.
He submitted a plan to the board that focused on a 3.5% reduction across Augustana’s budget; pay freezes for the 2009-2010 academic year; a possible delay in the renovation of Old Main; and new funding for new programs that would attract and retainstudents and increase the visibility of the college.
Trustee Lee Selander ‘72, former chair of the board’s finance committee, worked closely with President Bahls.
“His strong focus on the financial strength and sustainability of the college resulted in a rigorous budgeting process that centered on maintaining and adding to the school’s physical assets and creating reserves for unexpected outcomes,” Selander said. “That approach in my mind is the reason we were able to navigate the financial crisis of 2008.”
Augustana’s administration and the board also avoided a “hunker down” mentality — the mindset of lying low and minimizing losses to Augustana programs, without thinking about strengthening the college’s competitive position. In 2009-2010, while other schools were cutting programs, Augustana added nine majors and two varsity sports and celebrated the college’s 150th anniversary.
Pandemic or not, looking at the future
Interestingly, that approach reflects how the college is dealing with the current pandemic. Augustana is not “hunkering down” by any means. Despite dramatic revenue losses since the campus closed in late March to mitigate the spread of COVID-19, the college has added three varsity sports and a major, and launched a master’s program in speech-language pathology.
“We continue to focus on the needs and requirements of the future while managing the challenges and obstacles of today,” said Kirk Anderson ’93, chief financial officer and vice president for finance and administration.
According to Anderson, the college’s biggest financial hardships related to the pandemic include refunds for room and board after campus closed in late March; decreased tuition and room and board income due to low enrollment in the fall; and COVID-19 testing expenses.
“Steve has made it clear he always wants to know the financial implications of a number of different scenarios, especially the worst-case scenario, before he makes decisions,” Anderson said. “He doesn’t want to be surprised. He has spent many hours analyzing the details so we can get through this and remain strong.
“What I’ve enjoyed most about working with him is his sense of humility. He doesn’t come in thinking his way is always the right way. He listens to folks and asks questions so he can make informed decisions.”
With board approval, the college has taken the following actions, among others, to reduce the impact of COVID-19-related revenue loss:
• increased drawdown on the endowment
• reduced capital spending (infrastructure)
• frozen wages for the current academic year
• adjusted contribution to employee pension plans
‘A driving force in fundraising’
As President Bahls looks back on his years at Augustana, he is especially proud of the college’s improved financial position since his arrival in 2003. He attributes it to the administration and board’s embrace of fiscal conservatism.
The college’s net assets in 2003 were $108.7 million. As of June 30. 2020, the net assets had nearly tripled to $309.2 million. The endowment grew from $71.3 million to $169.4 million.
In conversations about President Bahls, many colleagues talk about his dogged dedication to raise funds for the college. He ranks as one of the all-time most effective fundraisers in the Quad Cities. More than $285 million has been raised so far during his tenure at Augustana.
“Steve has an uncanny understanding of the need for him to be a driving force in fundraising,” Selander said. “The two successful capital campaigns accomplished under his leadership have furthered the school’s financial strength in very uncertain times. Many college presidents don’t have the desire or passion to engage this way.”
Selander joined the board a year after President Bahls was hired, after a search by a committee led by Board Chair Brenda Czajka ’75 Barnes.
“Given Brenda’s exceptional leadership qualities and those of the trustees, they fortuitously chose a person who had the best possible credentials, experience and faith orientation to lead the school through what have become very challenging years and a dramatically changing landscape for small liberal arts colleges,” he said.