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Dear Alumni and Friends:

A year ago we were hoping for something of a rebound from a flat market.  The preceding decade had been one of the most difficult in years, and the S&P was actually down or neutral in eight of the 10 years since 1999. Only 2007 provided major progress in the return game.  With Culver’s drawing a significant amount annually from the endowment to run the Academies, even prudent fiscal management of the institution could not prevent us from languishing in financial mediocrity when it came to growing our endowment. The By Example Campaign had literally saved us from financial disaster (especially given the negative results the market delivered from 2001-2004) but we could not build our endowment fast enough to make true progress.

We understood that cost containment, a reasonable return from our investments in 2008-2009, and the payment on gifts from our ground-breaking campaign would position us well for the future and put us on track to realize our goal of having a fully-capitalized school. Then the world shifted! Markets collapsed, credit evaporated, and the sins of leverage and larceny were exposed. Most endowments fell 25 percent to 35 percent. We were braced for a storm we had feared might break, but even with virtually no leverage and ample liquidity in our portfolio, there were no safe harbors. We lost 12 percent of an endowment we had worked so hard to earn and preserve. Our endowment fell from $180 million to $150 million from the beginning of August 2008 through the end of the year. Everything that had been looking so positive suddenly looked bleak.

How would we complete the By Example Campaign ? Could we garner any support in this environment for the Annual Fund? Would our families—winter and summer—be able to afford to continue their Culver education? How would we weather this storm?

The best news is that Culver may be at its best when the odds are tough. The next best news is that Culver men and women are loyal to the Academies and will do what they can to ensure their success. Culver people know that preparation is a virtue—anticipate and prepare for all contingencies. We had not only been dampening the volatility of the portfolio just in case of a major correction, we had been repositioning the endowment in the last quarter before the debacle in anticipation of a tough market. We had also spent the last three years with a new approach and philosophy for engaging five-year reunion classes to support the Annual Fund with a class reunion gift. Lastly, we had been working much of the summer with an incredibly generous alumni family to create a positive way to leverage gift giving as the By Example Campaign came to a close. We never expected the downturn we experienced, but we were preparing for the unexpected. Then our Culver alumni, family, and friends responded to the call for support, and we didn’t just survive, we prevailed.

We are on the threshold of the completion of one of the most extraordinary campaigns in secondary school history. We are accomplishing this result in one of the worst decades of cumulative market results in history. We just completed an Annual Fund that raised nearly $6 million in a year when many schools saw a large drop in their fund-raising activities. And we have recovered all the dollars lost in the market and are on the verge of breaking the $200 million endowment barrier for the first time in the history of the school. We have a ways to go before we are truly fully-capitalized, but we have achieved mightily in this challenging environment.

That said, we have cut more than $2 million from the budget for next year. We are going to be operating carefully and especially lean, and we will be doing all in our power to continue the drive to earn the Batten Leadership Challenge match for the endowment. We have earned just over $17 million of matching funds to date, and we have until the 31st of January 2010 to get to $50 million. That is a challenge, literally and figuratively, but Culver loves a challenge.

We are off to a great start: Summer enrollment is at a high water mark, and CMA and CGA are full for the fall term. We have earned modest but healthy results for the first quarter from our investments, and we ended the fiscal year on budget, in spite of a slightly compromised Annual Fund. Prospects could not be better, or should I say fairer. We do not expect an easy or smooth ride in 2009-2010, but we have the team, the attitude, and the plan to meet the challenge. Thank you for your support and for the confidence you have shown in our school. 

John N. Buxton
Head of Schools