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Chronicle Messages

Living Up to Our Inheritance
Spring 2001
PDF Version

From time to time, someone will ask me why Berry needs to raise money. After all, we have a good endowment and 28,000 acres of land. The answer is that the actual cost of educating students is greater than what we charge them. It costs us $24,079 to educate each student; we charge only $12,500. (Tuition charges do not include costs of room and board.) The tuition charge of $12,500 is further reduced by grants and scholarships. Few students pay more than a third of what it actually costs to educate them. To make up the difference between what we charge and what an education costs, we must supplement endowment income with gifts and grants.

The only reason a college deals with money is to help students gain an education.

Although all of our resources should translate into the education of students, the full story has more to it. For instance, it is generally thought that our 28,000 acres represent great wealth. Our land is very well managed, but it does not add dollars to our budget. Each year, we pay more in property taxes and land management costs than we earn from land and timber sales. By law, we pay taxes on 25,000 acres at the same rate as our neighbors. Berry land operations do not run in the black nor did our farms of the past. Farming at Berry in our early years was underwritten by gifts for the schooling of our students. Students were well housed, well fed, and able to learn from their work experience because others - for instance, Miss Berry's Pilgrims from New York and Boston - were paying for their education. Subsidies, including subsidized labor, kept our farms solvent. We do not farm now because our curriculum has changed. Agricultural studies today are part of the natural sciences and are carried out differently than they were in years past.

Berry land that is not devoted to campus buildings and athletic fields resembles a large state or national park, and it is a tribute to my colleagues that we manage this land as economically as we do. Federal and state governments struggle to maintain their parks. Several undertakings have helped us. We still engage in the selective harvest of timber.

Years ago, we issued a long-term lease for quarrying operations, a venture that has now ended. Recently, we have been partners in three successful land developments: the Mount Berry Square mall; a high-end housing development next to a public golf course; and the Berry Corporate Center. The latter two, still works in progress, seem particularly promising. If we focused more upon making money and less upon educating students, we could get more out of our land. However, we may not wish to live with the consequences of a focus upon money making. Turning our land over to entrepreneurs to maximize profits could result in housing and commercial development on Lavendar Mountain rather than the unspoiled area we now have. The truth is our primary business is education, not property development. For instance, we are transforming some of the Berry forest into an enormous learning laboratory for environmental study and research.

Our land holds its greatest potential as a long-term investment. Property values locally are now only a fraction of what they will become in 50 years. Much later in the century, we will find a way to bring needed funds to the college while preserving Lavendar Mountain and its surroundings. Our grandchildren will thank us - and Martha Berry - for such patience and foresight.

Another great resource is our fine endowment of $190 million that produces an annual payout of $7.7 million. We spend less than the endowment actually earns so that the fund will grow over time and keep ahead of inflation. The college is also the beneficiary of various trusts created by donors, the assets of which are not in the possession of the college although we have legally enforceable rights to the income from them. These trusts are now worth $467 million and bring us $7.2 million annually. (The income level is set by the terms of the trusts.) Last year, combined endowment and trust income of $14.9 million represented 30 percent of our total budget of $50 million. Charges for tuition, room, and board represented another 52 percent. The remaining 18 percent had to come from gifts, grants, contracts, and other sources.

Although Berry has long been blessed by generous support from our friends, the cost of educating our students continues to rise. The high cost of technology is just one example of increased expense. We have at least three choices. We can raise our tuition significantly and risk losing the very students we seek to serve. We can lower our standards. Or, we can raise more external funds.

If we wish to carry our founder's vision into the 21st century, we must make the investments that will sustain our mission. Neither Berry nor any private college has funds for capital improvements. Our friends must help us make needed improvements. We lack the funds to pay for our new science building and for our share - beyond insurance - of the repairs and renovations to Krannert Center. As yet, we have no funds to construct a desperately needed athletic center. Moreover, we require additional faculty members and more need-based scholarships as well as other scholarships to achieve greater diversity within the college. Indeed, we must build a stronger Berry that is better able to meet the increasingly complex challenges of the modern era. We cannot afford to rest on our laurels. Our challenge is to resemble the good stewards who made their talents grow. That is why I ask our alumni and friends to support us as never before. The education of the head, heart, and hands, and a commitment to service represent an investment for a lifetime.

Dr. Scott Colley
Berry College President

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