Last year Deerfield celebrated the completion of one of the most successful capital campaigns in independent school history-a campaign that grew the endowment, secured the academy's long-term economic stability, and most of all, reflected the deep and abiding loyalty of our alumni. Consequently, many people are puzzled by the budget cuts that have become necessary as a result of the national economic downturn and the poor performance of the stock market.

It is an unhappy irony right now that schools with large endowments are more susceptible to market forces than schools that rely on tuition as a primary source of income. The value of Deerfield's endowment is not what it was a year ago, and the money generated by the endowment is also less. In order to provide for the future, only a regulated amount may be drawn from the endowment each year. As this computation is applied to a smaller endowment, the resulting draw is also reduced, and the budget must be adjusted accordingly.

How is Deerfield accomplishing this? First of all, every budget manager is scrutinizing his or her line items, looking for savings both large and small. This is actually a healthy exercise and one that is going on in households all over America right now. We are making sure that our vendors are delivering goods and services at the best possible price. We are evaluating our energy consumption, and we are looking for cost-effective ways of doing our jobs, without compromising the quality that is a hallmark of Deerfield's approach to all tasks. Another budget-balancing strategy involves looking carefully at positions as they become open and asking if the duties of that position can be handled in some other way. Often careful restructuring results in increased efficiency as well as cost savings. Though next year will also present great challenges, it is hoped that the budget can be brought into balance through these strategies.