New York—Yeshiva University, the nation’s most prestigious Modern Orthodox institution for higher learning, is in dire financial straits.
In a recent e-mail to Yeshiva alumni, university President Richard Joel acknowledged that the school had been unable to achieve a balanced budget for the current academic year, despite efforts by his administration to cut costs, and would therefore have to pursue additional, potentially devastating, reductions.
“We must address financial realities,” said Joel in his message. “Major operational changes are required to bring income and expenses in line while continuing to pursue a vision for 21st century Yeshiva University with fervor and immediacy.”
Those “financial realities” have been uniformly grim for Yeshiva in recent years.
As of 2007, the university was riding high after a very successful period of fundraising, including a $100 million gift from alumnus Ronald Stanton, founder and CEO of petrochemical giant Transammonia. But then came the financial crisis of 2008 – and the downfall of Bernard Madoff, with whom the school had heavily invested.
Yeshiva is also facing a $680 million lawsuit from former students alleging sexual and/or physical abuse at the university’s MTA High School facility. A 53-page independent report on the allegations commissioned by Yeshiva’s Board of Trustees cost an additional $2.5 million. And the scandal caused some donors to stop contributing to the school.
Most recently, the well-known credit rating agency, Moody’s Investor Service, downgraded the school’s credit rating to Baa2, the agency’s second-lowest grade. Moody’s also expressed skepticism that Yeshiva would be able to achieve an upgrade in the foreseeable future… and that there was the possibility of an even lower rating on the horizon.
Since 2008, Joel had attempted to balance the university’s budget through salary freezes, staff cutbacks, and decreases in retirement contributions and departmental budgets. (However, earlier this year, the Board of Trustees authorized salary increases for Yeshiva faculty over Joel’s strong objections.)
At present, as Joel acknowledged in his message, Yeshiva is still far removed from the goal of balancing its books. “Simply put, the spending required to support what we have built outpaces the income we generate,” he wrote, “and the substantial deficits that we have incurred cannot be sustained. Therefore, despite our best efforts… while so many of you have already sacrificed, we all must continue to do so.”
The exact nature of the additional cutbacks has not yet been specified. However, according to the university’s student newspaper, The Commentator, the reductions will be “even more painful” than those made previously, and may include mandatory furloughs for Yeshiva employees.
In his e-mail, Joel, who has served as Yeshiva’s President since 2003, tried to remain optimistic.
“True, we face considerable challenges,” he wrote, “but Yeshiva University has faced challenges for over 125 years, and the Jewish people for millennia. Our story teaches us to view our challenges as platforms for opportunity… Together, we will emerge a renewed Yeshiva University that is global in its scope, strong at its core and looking towards the future.”
By Philip Berroll
