‘We were all blindsided’: Chatham University faces multimillion-dollar budget hole, lays off staff, cuts benefits

Chatham University photographed on Sept. 26, 2022, in Shadyside. (Photo by Stephanie Strasburg/PublicSource)

The Pittsburgh university has seen deficits in most recent years, and faces dips in graduate school enrollments amid higher ed headwinds.

by Emma Folts, PublicSource

Five days before Rhonda Phillips took over as Chatham University’s new president, faculty and staff received an email from her. “While excited to officially begin my tenure,” she wrote on June 26, “this is not the tone nor tenor of the first message I envisioned sending.”

Earlier that morning, Board of Trustees Chair David Hall told faculty and staff via email that the private university faces an increasing deficit in its operating budget, projected then to be between $8-12 million, and likely needs to “realign costs and revenue” over the next two years. That’s a substantial sum for Chatham, which brought in about $52 million in revenue in the 2022 fiscal year, according to audited financial statements. 

So far, the university has limited health care benefits and laid off staff members. The board also passed a resolution allowing university leadership to begin a “campus-wide reorganization,” Hall wrote in his email. The process was already underway by the time Phillips messaged the faculty and staff about half an hour later. 

The incoming president shared that she plans to restructure Chatham’s leadership team over the current academic year. At that time, that meant the departures of the vice presidents of finance and administration; academic affairs; strategic planning and Title IX; and advancement. The effort was necessary, she wrote, to streamline administrative decision-making and help establish “new approaches to supporting our students, employees, and alumni.” 

And she was forming an academic advisory committee, partly composed of faculty, staff and students, to review the university’s programs, outcomes, pricing and funding. She told the faculty and staff that she’d hold a campus update on “Chatham’s situation and plans” the week of July 3 and would schedule additional meetings in the summer and fall. 

Timeline: Chatham University’s growing deficit

“I fully recognize the uncertainty and impact the days ahead will have on our community. As we chart our path, please know that it is my goal to always lead with empathy, support for our mission, and by providing clear direction for Chatham as we move forward together,” Phillips wrote.

Emerging indications of Chatham’s fiscal crisis bring to Pittsburgh a problem faced by many universities as enrollments dip, costs rise and federal pandemic relief money runs out. And even if Chatham tackles the deficit, the university may face additional headwinds in the future. The state has the fourth-highest number of higher education institutions in the country, and they’ll likely compete for an undergraduate population that’s expected to fall sharply in the coming years.

Chatham pay, insurance benefits trimmed

Bill Campbell, a spokesperson for the university, said that the deficit is now projected to stand at $6 million. The university estimates that it will shrink to $3-4 million next year, but he noted that all numbers may fluctuate.

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