The pandemic has roiled markets and laid waste to entire industries, but thanks to Pomfret's careful financial planning, things are looking up.
BY ED GRIFFIN, CHIEF FINANCIAL OFFICER
One year ago, the stock market was in free fall. As the coronavirus marched steadily across the globe, the unthinkable began to happen. The lights on Broadway went dark. The NBA postponed its season. Restaurants closed. Schools switched to remote learning. It felt like the sky was falling.
As the chief financial officer at Pomfret, it was my job to anticipate and mitigate the financial impacts of this unpredictable situation. The first thing I did was pull together our team of outside investment experts and trustees from our investment committee to discuss an action plan. After much conversation, we decided to stay the course, resisting calls to “time” the market, smartly avoiding the temptation to change our long-term strategy.
Over the next eleven months or so, the S&P 500 Index grew by 70 percent, maximizing our returns. When our fiscal year ended on June 30, our gross endowment had reached a highwater mark of $55 million. Since then, our endowment has continued to see record growth. (The latest valuation is 20 percent higher at $66 million.)
Early on, we made another important financial decision. No matter the cost, we would always prioritize the health and safety of our community over our own financial interests. It's a commitment we continue to make. In our bid to keep the school safe and open, we have spent more than $500,000 on things like Covid-19 testing supplies, portable air handling systems, plexiglass barriers, and more.
In addition, Pomfret was an early adopter of the Paycheck Protection Program (PPP), which allowed us to keep our entire workforce on the payroll in the early days of the pandemic, contributing in meaningful ways, even as the School shuttered campus and pivoted to remote learning.
Because we have no interest in benefiting financially on the backs of our tuition-paying families, some of whom were (and still are) experiencing real financial hardship as a result of the pandemic, we also made the decision to return any cost savings we experience as a result of the pandemic to our parents in the form of a refund, based on a percentage of their net tuition and fees.
More recently, Pomfret has decided to take advantage of the favorable interest rate environment. This April, we will sign documents that will allow us to refinance all of our existing long-term debt in the amount of $14 million. The fixed interest rate cost of the refinancing comes at a total cost of 2.6 percent, which will produce a $2.7 million net present value savings over the life of the bonds.
If this pandemic has taught me anything, it's that opportunity is often born from hardship, but you need to be prepared to take advantage when it does. Whatever financial challenges are waiting for us down the road, we will be ready to meet them.