3 Posts
UPDATE: ORIGINALLY SENT TO ASPEN INSTITUTE STAFF ON MAY 14, 2020
Dear Aspen Institute Colleagues,
I am writing to provide an update on the topic of the loan we received through the Small Business Administration’s Paycheck Protection Program (PPP).
Since my email yesterday providing information on why we applied for this loan and what other steps we are taking to manage our finances in this evolving economic and health crisis, I and no doubt many of you have discussed the matter with colleagues, friends, and supporters.
Based on feedback from many corners, it became clear to me that we should return the loan. This afternoon, the Senior Executive Team and I brought that recommendation to the Executive Committee of our Board of Trustees, which has fiduciary responsibility for the Institute, and they agreed. We are beginning that process today.
It was appropriate for us to apply for the loan when the program was announced because we were eligible under the guidelines and we have very compelling needs with the cancellation of our summer programming and a projected deficit of $14-17 million. I thank all of our colleagues who worked very hard on that application.
But, at this time, it is simply untenable for us to utilize the loan—both because there are many small and vulnerable businesses that have not been able to receive a loan through the program, and because we have other ways to secure much-needed financial support, such as fundraising and additional utilization of our reserves. There are many small businesses and nonprofits that don’t have those options.
Moreover, our mission is to drive change toward a free, just, and equitable society. That work is more important than ever right now. We seek to work in partnership with many who are trying to repair and rebuild our world and address historical and structural inequities. It doesn’t further our partnerships to utilize resources that smaller and more vulnerable organizations desperately need.
I appreciate that the return of the loan raises concerns about our overall financial resiliency in a time of great uncertainty for individuals and for our economy. Our primary concerns have always been to support our people and to serve society in a time of serious need. In returning the loan, we are forgoing one instrument to help us cope with our current and future losses—but our commitment to do the very best we can for each other does not change.
As an opportunity to discuss this topic as a staff community, we will hold a special Town Hall meeting tomorrow (Friday, May 15) at 11:00 a.m. ET. I will offer a few introductory remarks and then open the floor for conversation. Thank you again for your thoughtful input and devoted efforts on behalf of the people we serve.
All the best,
Dan
--
Daniel R. Porterfield, Ph.D.
President and CEO | The Aspen Institute
@DanPorterfield | www.aspeninstitute.org
--
ORIGINALLY SENT ON MAY 13, 2020
Dear Fellows,
Below, I share with you a message from Dan Porterfield to the Aspen Institute staff explaining the Institute’s decision to accept a loan through the Paycheck Protection Program (PPP) administered by the United States Small Business Administration (SBA). As you may be aware, the Institute is engaging in an open conversation with multiple stakeholders about this decision. Dialogue of this nature is welcome. In the days ahead, we will invite an open and honest conversation with you about this topic and the values informing it.
Please stay tuned for an invitation to take part in a broader dialogue. I hope to see many of you there as we engage in the work ahead.
In Fellowship,
John
John Simpkins
Vice President, Aspen Global Leadership Network
The Aspen Institute
--
A Message From Aspen Institute President and CEO Dan Porterfield
Dear Colleagues,
Two days ago, I took part in a discussion with a group of Aspen Global Leadership Network seminar moderators and several staff at which some moderators asked questions about our having applied for, received, and accepted a loan through the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA). As we’ve discussed in town hall meetings and other settings, we are deeply grateful that we received this loan, which was secured through the same process that all other eligible organizations used and will use it for its intended purpose which is to help cover employee pay for an eight-week period during a time of massive and growing unemployment.
There were some participants in the discussion who raised questions about whether the Institute should have applied for this loan given the tremendous struggles of many other small businesses and nonprofits to make payroll. A Washington Post piece published today reports on the concerns raised in this conversation.
The Aspen Institute specializes in difficult dialogue, and we continue to engage our moderators and key constituents on the tensions among values, recognizing that in the end people may come to different conclusions and act on them accordingly. We made a values-based decision to support our employees, but recognize that others may disagree. We do remarkable work across the Institute, including direct service to constituents who are in need. We are proud of the work that we do.
I am writing to you now to further share my thoughts about applying for and receiving this loan. I believe it was prudential given our mission, our employees’ needs, the intent of the program, and the substantial financial blows we’ve received from the continued cancellation of convenings and other factors.
First, why did we apply for this loan? Because the work we do requires that we have sufficient resources to support our employees. As of now, we are projecting $14-17 million in losses for 2020, and that number may grow if the economy does not improve, and our ability to hold events, convenings, and other programs does not resume, before the end of the year. We also have lost revenue from other sources. This crisis has already had an outsized impact on our budget and we are not through it yet.
Working to fill our evolving financial gap is critical so that we can do our very best to keep our staff employed during this difficult time. Keeping staff employed is the purpose of the PPP and we believe that purpose matches our need. Realistically, the longer the crisis goes on, the worse the impacts will be. Already, tens of millions of Americans have lost their employment. I am committed to doing everything in my power to help all employees of the Aspen Institute have the security of a job and the opportunity to make a difference in society with our work.
Second, how was the amount of our loan ($8 million) determined? The amount is based on the formula provided by the Small Business Administration for an organization of our size and represents just a portion of what it costs to pay staff salaries, benefits, and rent for the loan’s eight-week period.
Third, are we also addressing our payroll needs using other sources? Yes. We have reduced expenses, restricted new hires, and engaged with our trustees and donors. We also have tapped into our reserves, as well as into the portion of our endowment that is unrestricted (the majority of our endowment is restricted and cannot legally be tapped). But these resources are limited and not sufficient to meet the needs of our organization during a financial crisis that will go on for an indefinite length of time. If this crisis continues into next year, or if we should experience some other kind of crisis that savings like these are intended to address, we will need to tap those resources again and make additional cuts. The PPP loan, which only covers an eight-week period, helps us avoid draining unrestricted endowment funds that we are already tapping now, and being left with insufficient resources if we need more help later in the year or beyond. It also allows us to keep our staff employed and our mission moving while we work hard to identify new sources of revenue.
No doubt, the heart of the criticism we may receive is that there are other kinds of organizations that are even more financially strapped and that do not have a Board of Trustees as large and well-resourced as ours. I appreciate that, and at the same time am willing to say in a forthright way to anyone who asks that our organization needs financial support in trying to protect the jobs of our employees. When I wrote above that we made a values-based decision, it was based on that principle that we should do everything in our power to protect our employees so that they can continue to do their work that serves society.
I appreciate that any questions about our financial resilience surface anxieties about our ability to avoid more painful decisions about compensation and employment. We are trying our best to keep the institution moving forward in an extraordinary crisis. While I can’t make guarantees about how the pandemic will play out, I can guarantee that we will always make sure that employees of the Aspen Institute are supported and respected.
In the coming days, we will create opportunities for discussion of these important matters. In the meantime, if you have questions, please feel free to write Executive Vice President David Langstaff.
On behalf of the Senior Executive Team, thank you for everything you do for the Aspen Institute and for society—by continuing to tackle big problems, by finding solutions that will make life better for people everywhere, and by working each day to create the free, just, and equitable society we seek. I am inspired by your commitment to our mission.
With respect and appreciation,
Dan
Daniel R. Porterfield, Ph.D.
President and CEO
The Aspen Institute
Dear Aspen Institute Colleagues,
I am writing to provide an update on the topic of the loan we received through the Small Business Administration’s Paycheck Protection Program (PPP).
Since my email yesterday providing information on why we applied for this loan and what other steps we are taking to manage our finances in this evolving economic and health crisis, I and no doubt many of you have discussed the matter with colleagues, friends, and supporters.
Based on feedback from many corners, it became clear to me that we should return the loan. This afternoon, the Senior Executive Team and I brought that recommendation to the Executive Committee of our Board of Trustees, which has fiduciary responsibility for the Institute, and they agreed. We are beginning that process today.
It was appropriate for us to apply for the loan when the program was announced because we were eligible under the guidelines and we have very compelling needs with the cancellation of our summer programming and a projected deficit of $14-17 million. I thank all of our colleagues who worked very hard on that application.
But, at this time, it is simply untenable for us to utilize the loan—both because there are many small and vulnerable businesses that have not been able to receive a loan through the program, and because we have other ways to secure much-needed financial support, such as fundraising and additional utilization of our reserves. There are many small businesses and nonprofits that don’t have those options.
Moreover, our mission is to drive change toward a free, just, and equitable society. That work is more important than ever right now. We seek to work in partnership with many who are trying to repair and rebuild our world and address historical and structural inequities. It doesn’t further our partnerships to utilize resources that smaller and more vulnerable organizations desperately need.
I appreciate that the return of the loan raises concerns about our overall financial resiliency in a time of great uncertainty for individuals and for our economy. Our primary concerns have always been to support our people and to serve society in a time of serious need. In returning the loan, we are forgoing one instrument to help us cope with our current and future losses—but our commitment to do the very best we can for each other does not change.
As an opportunity to discuss this topic as a staff community, we will hold a special Town Hall meeting tomorrow (Friday, May 15) at 11:00 a.m. ET. I will offer a few introductory remarks and then open the floor for conversation. Thank you again for your thoughtful input and devoted efforts on behalf of the people we serve.
All the best,
Dan
--
Daniel R. Porterfield, Ph.D.
President and CEO | The Aspen Institute
@DanPorterfield | www.aspeninstitute.org
--
ORIGINALLY SENT ON MAY 13, 2020
Dear Fellows,
Below, I share with you a message from Dan Porterfield to the Aspen Institute staff explaining the Institute’s decision to accept a loan through the Paycheck Protection Program (PPP) administered by the United States Small Business Administration (SBA). As you may be aware, the Institute is engaging in an open conversation with multiple stakeholders about this decision. Dialogue of this nature is welcome. In the days ahead, we will invite an open and honest conversation with you about this topic and the values informing it.
Please stay tuned for an invitation to take part in a broader dialogue. I hope to see many of you there as we engage in the work ahead.
In Fellowship,
John
John Simpkins
Vice President, Aspen Global Leadership Network
The Aspen Institute
--
A Message From Aspen Institute President and CEO Dan Porterfield
Dear Colleagues,
Two days ago, I took part in a discussion with a group of Aspen Global Leadership Network seminar moderators and several staff at which some moderators asked questions about our having applied for, received, and accepted a loan through the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA). As we’ve discussed in town hall meetings and other settings, we are deeply grateful that we received this loan, which was secured through the same process that all other eligible organizations used and will use it for its intended purpose which is to help cover employee pay for an eight-week period during a time of massive and growing unemployment.
There were some participants in the discussion who raised questions about whether the Institute should have applied for this loan given the tremendous struggles of many other small businesses and nonprofits to make payroll. A Washington Post piece published today reports on the concerns raised in this conversation.
The Aspen Institute specializes in difficult dialogue, and we continue to engage our moderators and key constituents on the tensions among values, recognizing that in the end people may come to different conclusions and act on them accordingly. We made a values-based decision to support our employees, but recognize that others may disagree. We do remarkable work across the Institute, including direct service to constituents who are in need. We are proud of the work that we do.
I am writing to you now to further share my thoughts about applying for and receiving this loan. I believe it was prudential given our mission, our employees’ needs, the intent of the program, and the substantial financial blows we’ve received from the continued cancellation of convenings and other factors.
First, why did we apply for this loan? Because the work we do requires that we have sufficient resources to support our employees. As of now, we are projecting $14-17 million in losses for 2020, and that number may grow if the economy does not improve, and our ability to hold events, convenings, and other programs does not resume, before the end of the year. We also have lost revenue from other sources. This crisis has already had an outsized impact on our budget and we are not through it yet.
Working to fill our evolving financial gap is critical so that we can do our very best to keep our staff employed during this difficult time. Keeping staff employed is the purpose of the PPP and we believe that purpose matches our need. Realistically, the longer the crisis goes on, the worse the impacts will be. Already, tens of millions of Americans have lost their employment. I am committed to doing everything in my power to help all employees of the Aspen Institute have the security of a job and the opportunity to make a difference in society with our work.
Second, how was the amount of our loan ($8 million) determined? The amount is based on the formula provided by the Small Business Administration for an organization of our size and represents just a portion of what it costs to pay staff salaries, benefits, and rent for the loan’s eight-week period.
Third, are we also addressing our payroll needs using other sources? Yes. We have reduced expenses, restricted new hires, and engaged with our trustees and donors. We also have tapped into our reserves, as well as into the portion of our endowment that is unrestricted (the majority of our endowment is restricted and cannot legally be tapped). But these resources are limited and not sufficient to meet the needs of our organization during a financial crisis that will go on for an indefinite length of time. If this crisis continues into next year, or if we should experience some other kind of crisis that savings like these are intended to address, we will need to tap those resources again and make additional cuts. The PPP loan, which only covers an eight-week period, helps us avoid draining unrestricted endowment funds that we are already tapping now, and being left with insufficient resources if we need more help later in the year or beyond. It also allows us to keep our staff employed and our mission moving while we work hard to identify new sources of revenue.
No doubt, the heart of the criticism we may receive is that there are other kinds of organizations that are even more financially strapped and that do not have a Board of Trustees as large and well-resourced as ours. I appreciate that, and at the same time am willing to say in a forthright way to anyone who asks that our organization needs financial support in trying to protect the jobs of our employees. When I wrote above that we made a values-based decision, it was based on that principle that we should do everything in our power to protect our employees so that they can continue to do their work that serves society.
I appreciate that any questions about our financial resilience surface anxieties about our ability to avoid more painful decisions about compensation and employment. We are trying our best to keep the institution moving forward in an extraordinary crisis. While I can’t make guarantees about how the pandemic will play out, I can guarantee that we will always make sure that employees of the Aspen Institute are supported and respected.
In the coming days, we will create opportunities for discussion of these important matters. In the meantime, if you have questions, please feel free to write Executive Vice President David Langstaff.
On behalf of the Senior Executive Team, thank you for everything you do for the Aspen Institute and for society—by continuing to tackle big problems, by finding solutions that will make life better for people everywhere, and by working each day to create the free, just, and equitable society we seek. I am inspired by your commitment to our mission.
With respect and appreciation,
Dan
Daniel R. Porterfield, Ph.D.
President and CEO
The Aspen Institute
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