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Schools Learn Lesson as Money Pots Shrink

March 26, 2009 By:
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The economy has forced Gratz College in Melrose Park to make some budget cuts.

With the job market looking grim and showing few signs of turning around, now might not be such a bad time to be in college or graduate school -- preferably in a multiyear program, or at least until the unemployment rate declines and economists stop using the "R" word.

Still, it's no secret that colleges and universities are deeply affected by the same market forces that have slowed down the economy as a whole.

In the region, large institutions with Jewish-studies programs, such as Temple University, Drexel University and the University of Pennsylvania, along with smaller centers of learning, such as the Reconstructionist Rabbinical College and Gratz College, are all feeling the effects of the downturn.

Schools are grappling with diminished endowments, anemic fundraising environments, uncertainty about whether students and their families will be able to pay tuition bills, and a need to trim budgets.

For now, administrators are searching for that magic formula for cutting costs without slicing into substance.

Rabbi Dan Ehrenkranz, president of RRC, readily acknowledges that the institution has felt some sting.

"It appears to me that our endowment has performed fairly similarly to other endowments in education institutions -- which is to say, lousy," he said.

RRC, with a $6 million budget, employs 10 full-time faculty, an additional 20 adjunct instructors and about 60 students, most of whom are working toward rabbinical ordination.

Ehrenkranz estimated that in 2008, RRC's endowment lost between 25 percent to 30 percent of its value, putting it now somewhere between $12 million and $13 million. Typically, returns from the endowment make up about 16 percent of RRC's annual budget, according to Ehrenkranz.

Unlike many schools, RRC -- with its small student population -- cannot rely too heavily on alumni giving and must turn to the Jewish community at large for fundraising.

Ehrenkranz said that so far, the number of faculty and courses remains unchanged. To cut costs, the college has trimmed its full-time development staff from six to four, and is exploring the possibility of putting out publications solely on the Web.

Gratz College -- the 113-year-old institution in Melrose Park that trains Jewish communal professionals -- has also had to make some cuts. It has laid off two nonfaculty staff members, put the hiring of new faculty on hold and mandated a salary cut for all staff making more than $50,000 annually.

The school's president, Jonathan Rosenbaum, said that the moves were not in response to a fiscal crisis, but were proactive steps to avoid one.

"Like all responsible organizations, we have had to look at our current budget and make difficult decisions," he said.

Currently, Gratz has 241 students pursuing bachelor's degrees, master's degrees and doctorates in Jewish studies; roughly 60 percent of those students complete the majority of their coursework online, according to Gratz officials.

Apart from its Jewish-studies component, Gratz has more than 1,000 students enrolled in its online master's in education program; those courses are taught throughout Pennsylvania and Maryland.

It also boasts a large supplementary Jewish high school program with nearly 800 students and a number of adult-education programs, both classroom and Web-based.

Gratz's budget is roughly $5.5 million, according to Rosenbaum, who declined to specify how much it has lost in its endowment.

Another difficulty it has had to contend with is declining allocations from the Jewish Federation of Greater Philadelphia, which has refocused its priorities in recent years and has had to reduce allocations to many institutions. Ten years ago, federation dollars accounted for nearly 30 percent of the college's budget; in the most recent funding cycle, it received more than $500,000, or 10 percent of its budget.

Federation officials said that Gratz funding is targeted at its high school and adult-education programs.

Religion Goes Secular

The economic crisis has dealt harsh blows to several smaller Hebrew colleges in the country -- schools that were created well before the proliferation of Jewish-studies departments at secular universities.

For example, in January, the 90-year-old Baltimore Hebrew University announced that it would become part of Towson State University in Maryland; that came after the Baltimore federation said that it would cut its annual $1 million allocation in half. And Hebrew College in Boston is reportedly facing millions in debt stemming from its incomplete new facility, although it is apparently not planning to shut its doors.

"I think that the Hebrew colleges are definitely facing a challenge, and are going to have to position themselves very carefully in a world where philanthropic dollars are extremely scarce," said Jonathan Sarna, professor of American Jewish history at Brandeis University. He added that they can't hope to compete with Jewish-studies programs at prestigious secular institutions.

But Gratz appears to be in a better position than some other Hebrew colleges, said Sarna.

One of Gratz's mainstays in recent years has been offering Continuing Legal Education with Jewish content, an endeavor that's proved a boon to its finances. Lawyers in many states, including Pennsylvania, must take a certain number of hours to maintain their licenses. In the fall, Gratz received a $125,000 grant from the Zinbarg Foundation to make its CLE courses available on the Web.

Around the same time, it also got an $860,000 grant from a private foundation over three years for Gratz's Jewish early-childhood teacher's education program.

Meanwhile, at some of the area's major universities, the fates of Jewish-studies programs are largely intertwined with the rest of the institution.

At Temple University, an $11.5 million cut in state funding has prompted a university-wide effort to trim $40 million, or roughly 5 percent of its annual budget.

Laura S. Levitt, director of Temple's Jewish-studies program, which began in the 1990s, said that it will have a minimal budget for lectures and public events. But the core of the department --with 13 faculty members and about two-dozen students majoring or minoring in Jewish studies, with some 200 more taking a course or two each year -- will remain largely unaffected.

For Jewish students at Temple, plans are still on track for a new $7 million Edward H. Rosen Hillel Center -- slated to open in the fall. The center will go forward, even though several major donors have backed out, according to Rabbi Howard Alpert, director of Hillel of Greater Philadelphia.

Alpert said that the number of Jewish students at Temple has increased in recent years, although he couldn't provide an approximate number.

He also said that he expected the Jewish student population to increase further as families opt for Temple over pricier institutions.

On the other hand, Alpert said that he doesn't expect the recession to have any effect on the number of Jewish students at the University of Pennsylvania.

"There are still many more families that can afford Penn than there is room for students there," he said, referring to the school's popularity.

At the same time, he expects that many of those families will have fewer discretionary funds.

Roughly half of Hillel's $2.5 million annual budget comes from private fundraising, he noted.

Back in December, Penn President Amy Guttman acknowledged that the university's endowment had incurred a major loss. She instituted a number of measures aimed at shrinking the budget.

Beth Wenger, director of the Jewish-studies program at Penn, said that all programs had been asked to cut operating costs by 10 percent.

"We are not at a point where we have to eliminate anything at the core of our program," Wenger said, adding that she hadn't cut any faculty, but that new hiring is on hold.

"What it means in the long term, we don't know. In the short term, it means cutting back in the office in any way we can."

Rachmiel Peltz, director of Drexel University's Jewish-studies program, said that the downturn "is going to hurt us more than most programs because the administrative staff, and our projects and programs themselves, all come from outside money."

For example, Peltz has overseen a project that fosters interaction between students at the Ruth and Raymond Perelman Jewish Day School and the JCC Stiffel Center in South Philadelphia. Seniors have visited students in the school and vice versa; at one Israel Independence Day program, seniors told stories about where they where the day the state was created.

Lamented Peltz: "It would be a shame if we just became a roster of classes."

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