LEWISTON — Bates College expects “some serious challenges ahead” because of inflation and an uncertain economy, according to its vice president for finance and administration.

Geoffrey Swift, a Bates College vice president, issued a warning that rising costs and an uncertain economy could pose “serious challenges” for the Lewiston college. Submitted photo

“Everything the college needs to purchase — from health care to food to fuel — is more expensive, Geoffrey Swift, who is also the college’s treasurer, told colleagues in a letter last week.

Swift said that because costs are growing faster than our ability to increase revenues,” he has asked senior staff at the elite liberal arts college to pare spending in next year’s budget on everything except personnel by 5%.

“I recognize that this is a tall order for budgets that are already efficient and lean,” Swift added.

Despite his concerns for the future, Swift said the college’s finances remain healthy and have grown more solid in recent years thanks in part to a big push to increase Bates’ endowment.

“We are indeed stronger than ever,” he said, pointing out that Bates has been able to increase its robust financial aid to students, hike wages and improve the college’s infrastructure.


“But the economic environment is changing, and we need to prepare ourselves to adapt to new circumstances,” Swift said.

For instance, he said, the college expects to need another $1 million for employee health care and utilities next year. This year’s spending plan at Bates totals $131 million, with $98 million of the required revenue coming from tuition and related charges paid by its nearly 2,000 students.

The two colleges in Maine that Bates considers its peers, Colby in Waterville and Bowdoin in Brunswick, are also feeling the impact of a shaky economy.

Colby College President David Greene speaks about revitalization of downtown Waterville during a 2017 meeting with then-Mayor Nick Isgro. David Leaming/Morning Sentinel

Colby’s president, David Greene, told Maine Business, “We certainly feel the impact of rising prices and a changing labor force.”

“Our two largest expenditures are personnel costs and financial aid, both of which can fluctuate significantly in an inflationary environment or in a sustained economic downturn. On top of that, we purchase many items that consistently rise in price faster than the (consumer price index), such as specialized instrumentation for scientific research and books and journals for our library collection,” he said.

Swift, who has kept an eye on Bates’ finances for a decade, said the college weathered the pandemic better than it expected. Officials, he said, worried some students might avoid the residential college, perhaps creating “severe deficits.”


Fortunately, that didn’t happen.

“Thanks to the creativity and dedication of the entire campus, and a robust COVID-19 testing program, we were able to enroll students at typical levels” during the iffy academic years that began in 2020 and in 2021.

Though the college’s coronavirus testing regimen and other COVID-19 necessities cost Bates more than $6 million during the first year of the pandemic, the college wound up in the black because so many planned expenses never occurred.

In the 2021-22 academic year, pandemic costs went down, Swift said, but rising fuel costs were nearly $1 million over budget. Higher fuel prices also made food and travel more costly than anticipated, he said.

But grants and gifts kept Bates’ overall budget in the black, Swift said.

It helped that Bates’ endowment grew to $466 million at the height of the market, but as the investment climate darkened, the tally was down to $419 million at the end of the last fiscal year. That’s still more than $100 million higher than it was in 2019.


The endowments at Colby and Bowdoin also took a hit during the last fiscal year. Colby’s dropped 9.2% to $1.1 billion while Bowdoin fell 7.1% to $2.5 billion.

Though both its peers have much larger endowments than Bates, the growth in recent years in investments held by the Lewiston college allowed it to draw down more to help cover annual costs.

The college expects to use about $20 million from its endowment this fiscal year. As recently as 2017, it drew $12 million from the endowment, a fund that aims to create investment income for the long-term stability of the college’s finances.

Though the college’s finances are doing well, Swift said, its revenues “do not grow as quickly” as costs have been rising. As a result, Bates “finds itself in a challenging” position as it looks toward the coming year.

Swift said that with inflation up across the board, there is a limit to how much tuition can increase and the “tumultuous markets” suggest next year’s endowment distribution “will not grow commensurate with our costs.”

At the same time, he said, Bates plans to budget an extra $1 million for employee health care and another $1 million in additional spending for utilities.

Swift said that cutting nonpersonnel costs “ensure we retain capacity for compensation increases” and have money “to invest in better services or new ways of doing business.”

“The economic environment is changing, and we need to prepare ourselves to adapt to new circumstances,” Swift said.

“With everyone working together, I am confident that we will weather these challenges together and that Bates will continue to offer a distinctive and transformative experience for generations to come.”

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