A Chinese proverb asserts, "May you live in interesting times."

The fall of 2008 was certainly interesting - although not always reassuring. In higher education circles, as everywhere else, the volatility of the stock market and the deepening recession have caused great consternation.

At Furman, the administration and trustees have been working to manage the turmoil, ensure a balanced budget and plan for the future. "Our foremost goal," says President David Shi, "is to reduce expenditures without eroding the quality of the educational experience."

In October the university announced a series of steps to meet that goal. All discretionary expenditures were reduced by six percent. While Furman stopped short of a hiring freeze, Shi created an ad hoc task force to assess whether personnel openings created by normal turnover need to be filled immediately or at all.

In a message to faculty and staff, Shi said that the impact of the economic crisis on Furman has been significant - and is likely to worsen. As a consequence, the administration has prepared a second wave of potential cost-cutting steps. "Painful as they may be," he said, such budget retrenchments "are likely to continue for Furman and for all of higher education and corporate America as the financial crisis deepens." Despite the budget concerns, Shi remained upbeat. "Although short-term sacrifices are necessary, we will emerge from this crisis a stronger community and a stronger institution."

Compared to many other institutions, Furman, whose endowment at the close of the 2007-08 fiscal year (June 30) was $560 million, has weathered the crisis relatively well thus far.

Public universities, which depend on support from their state legislatures, have been hit particularly hard. Other institutions of higher learning have ordered layoffs, left positions unfilled and required employees to take unpaid furloughs. According to an informal survey, about half of the members of the Associated Colleges of the South (a group of 16 private liberal arts institutions to which Furman belongs) have enacted a complete hiring freeze.

Mary Lou Merkt, Furman's vice president for business affairs, says that a year ago members of the university's trustees investment committee, anticipating turbulence ahead, began reallocating some of the university's endowment to cash.

In addition, Furman's conservative endowment spending policy has helped to ease the blow this year. Furman spends 4.5 percent of a predetermined asset base annually. Funds are spent on scholarships, salaries, new technology and other operating expenses. Many other institutions spend five percent of the actual average market value of their endowment, which can vary greatly. Furman's constant growth spending model helps smooth spending despite volatile financial markets. But she is aware that economic conditions may worsen.

The pinch is being felt in fund-raising, too. Mike Gatchell, vice president for development, says that Furman remains on track toward its goal in the $400 million "Because Furman Matters" campaign, which is focused on increasing the endowmenet. As of December 31, the campaign had received approximately $275 million in gifts and pledges. Gatchell says that the immediate challenge is keeping annual giving on track to support the university's tightened budget. "Our alumni and friends have truly been heroes in their unwavering support."