Northwestern Freezes Hiring, Salaries During Coronavirus Pandemic

EVANSTON, IL — Northwestern University is freezing salaries for faculty and staff for the coming fiscal year, pausing the hiring of new staff and facilities projects and instructing administrators to put off any non-essential spending in response to the financial impact of the coronavirus pandemic, according to President Morton Shapiro.

Shapiro said the pandemic has already cost the university more than $25 million in fees "related to the decision to refund these charges for Spring Quarter," a loss in revenue due to the cancellation of on-campus programs, a need for increased financial support for students and a reduction in endowment payouts resulting from recent dramatic declines in financial markets.

In a letter to the Northwestern community, Shapiro said academic hiring and retention would be significantly slowed. Each candidate would be subject to careful evaluation. Hiring critical to the university's core mission or supported by outside grant funding will not be affected, nor will contractually required salary adjustments associated with promotion or tenure.

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As Northwestern has shifted to remote learning, the university has provided $1.5 million for students' travel and technology needs and helped more than 1,500 students through its COVID-19 emergency assistance fund, according to the letter. It said the university partnered with its food service contractor to ensure hourly workers would continue to receive full pay and benefits for the quarter by leveraging federal economic relief funding. The university has also partnered with Evanston to establish an emergency food bank on Wednesdays at James Park.

"In addition to the current financial challenges, we also need to prepare our institution for potentially more financial disruptions," Shapiro said. "Philanthropy may decrease, as our alumni and supporters face financial challenges of their own. Research funding from private or government sources may decline. Enrollment in certain programs may not reach pre-pandemic levels. And certain community-defining activities, such as Athletics, may be severely impacted. Finally, our return to on-campus instruction in the summer or fall is not guaranteed."

In his April 16 letter, Shapiro said the university would work to protect its endowment, preserve jobs, honor its commitments to financial aid and seek to minimize disruptions to its academic mission. Administrators worked to stabilize the university's finances following a budgetary shortfall in recent years and have already introduced more discipline in budgeting practices. The university president said the roughly $11 billion endowment is not intended for a financial crisis such as COVID-19.

"Questions may arise as to whether Northwestern's endowment might help us bridge any financial gap caused by the pandemic," he acknowledged. "These endowed funds tend to be restricted for specific purposes and a portion of them are allocated to illiquid investments that are not easy to unwind to support current spending needs. Funds within the endowment, in most cases, were provided by donors as a promise of support to future generations of students, faculty and staff. The endowment was not established to fix budget shortfalls or manage crises, but rather to provide key resources needed to preserve our mission of academic excellence and research eminence far into the future."

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