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Build Your Boat Before the Flood: Contigency Planning in Higher Education
Tuesday, January 1, 2002
In the current economic environment, the need for contingency planning is clear. Craig Aase and Gary Krueger began todevelop a financial crisis plan for Macalester College inthe summer of 2000, well before recession was a given. Tocapture the effects of a recession on the college's finances,they analyzed 25 years of Macalester's financial data toassess the relationship of institutional revenues—endowendowment, tuition and fees, and gifts—to the nation's gross domestic product (GDP) and the level of the Dow JonesIndustrial Average. Their work focused largely on theeffects of GDP and the Dow during the recessions of theearly 1980s and early 1990s and enabled them to forecastthe college's net revenues based on various recession scenarios.