Dartmouth's Daily Blog
News, commentary, criticism and praise for the College on the Hill, enlivened with history, culture and travel when we feel so moved.
This is an archived post. Please click here to see the latest entries.
Economic Crisis Hits Dartmouth
These letters arrived via blitzmail to the Dartmouth community this afternoon. More to come later as we evaluate what the priorities selected by the Administration in President James Wright’s final year.
Dear Members of the Dartmouth Community:
Over the past weekend we had an opportunity to engage with the Board of Trustees in an extended discussion regarding Dartmouth’s financial projections. We were able to share with them in detail the sobering picture that revenue is down significantly because of declining endowment performance.
This College is blessed with an endowment that has been enhanced greatly over the years by positive investment returns and by remarkably generous alumni/ae and friends. Supported by this financial foundation, the College’s “true endowment” - the excellence of our academic program, the strength of the faculty and staff, the quality of our students, and the range of facilities and other resources that enhance learning - has never been stronger. We need to reduce expenses in order to preserve this strength.
The current international economic downturn has its own unique and ominous qualities, affecting institutions, businesses and households. It is not unprecedented in terms of effects and consequences. As Dartmouth has done many times over the last 239 years - including several times in the nearly 40 years I have been here - we will meet this challenge.
The Board agrees with our financial projections and goals: we need to protect financial aid; we need to protect our academic strengths - of which the core is the tenure-track faculty and our overall educational environment, and we need to do all we can to support Dartmouth’s employees - as they support Dartmouth in all that they do.
In order to bring the College-only budget into balance, we will need to adjust projected expenses by up to ten percent, or approximately $40 million, over the next two fiscal years. Adjustments will need to be sustainable rather than temporary and while there may be some across the board reductions, we anticipate making specific reductions in ways that
reflect institutional priorities.
I have asked Provost Barry Scherr and Executive Vice President Adam Keller to consult widely and then to develop a plan and accelerate the normal annual budget-planning cycle to meet these objectives. After taking some preliminary steps, they will discuss options with the Faculty Committee on Priorities and with the Student Budget Advisory Committee. The College Budget Committee, which includes senior officers of the College, will consult within their areas of responsibility regarding their plans. You will also receive a memorandum from Barry and Adam describing some initial steps, our process and timeline. I have also asked the deans of the professional schools, which have been similarly affected, to develop their own plans consistent with these goals.
As we have received more information about how the volatile economy has affected the College, we now recognize that it will not be possible to reduce the budget at this level without cutting back our compensation expenses. Attrition will be the preferred approach to this, but it is not likely to be sufficient to meet our objectives. I expect everyone to look for ways to handle any necessary reductions in staffing in as supportive a manner as is possible.
We have undertaken a review of all ongoing and pending facilities projects and discussed these with the Board. We will proceed with some projects that already are underway and we are reviewing other projects to determine requirements for additional funding as well as renovations needed to address any safety issues.
We anticipate having new budget plans in hand early in 2009 at which time I will discuss the proposals and their implications with the Board who has sole authority to approve the final budget.
I thank in advance everyone who will be involved for taking on this difficult assignment and for all that you do to protect the special and enduring quality of Dartmouth.
Dear Members of the Dartmouth Community:
As President James Wright has informed you, Dartmouth, like most colleges and universities, is facing long-lasting effects from the worldwide financial crisis. It is prudent that we begin to deal with the budgetary impact of this situation, and this message outlines the process that we intend to follow in the coming weeks. There will be further communication with the Dartmouth community as we learn more during the process.
We are committed to working with you through this challenging period to assure that Dartmouth will continue to be a strong and vibrant intellectual institution, as well as accessible to the most promising students of all backgrounds.
October was a particularly volatile month for the financial markets. While the Dartmouth endowment performed much better than the stock indices, its value continued to fall. As a result, we have revised projections about future income from our endowment, on which we rely for more than a third of our operating revenue.
President Wright has asked us to outline the approach we are taking to reduce expenses in the College. Our target is to reduce expenses up to ten percent, or $40 million over the next two fiscal years. Each of the professional schools will also be taking any necessary measures to ensure that their budgets are in balance.
We plan to take the following actions in order to achieve a balanced budget through cost reductions that can be sustained into the future:
* Effective immediately, we will freeze external hiring of staff from outside the current pool of Dartmouth employees. This will provide opportunities for existing staff to transfer into open positions that need to be filled. Exceptions may be made by the provost, the executive vice president and the professional school deans under extraordinary circumstances.
* For this current fiscal year (ending June 30, 2009), we seek to reduce spending by five percent through reductions in every aspect of discretionary spending.
* We have asked the vice presidents and deans to recommend changes in each of their areas that will achieve substantive cost savings in FY 2010 and 2011. These changes may include the elimination or reorganization of programs, or reductions in service levels. We have asked divisions and departments to develop contingency plans to reduce their budgets in those years by five percent, ten percent and fifteen percent below what is currently projected. This broad range of options is important in order to allow us to make programmatic adjustments on a strategic basis, as opposed to less well-articulated reductions. In addition, multiple options offer us flexibility if the economic impact on Dartmouth changes dramatically.
* The dean of the faculty and the deans of the professional schools, in conjunction with the provost, will evaluate current plans for filling faculty positions and adjust them to reflect new financial circumstances. This will be done in the context of available funding and the clearly articulated long-term goal of maintaining a competitive faculty with the resources to support academic and creative endeavors.
* We will evaluate the implementation plans for all new programmatic initiatives and capital projects and adjust them to reflect the new financial circumstances.
- We propose to complete projects where construction is sufficiently under way to make a slowdown impractical: the Class of 1978 Life Sciences Complex, the Tuck School Living and Learning Complex and the Michael J. 1979 and Cynthia Ginn 1980 Biondi Ballpark.
- We will delay some projects for two to six weeks in order to conduct further analysis to assess the feasibility of moving forward: the Visual Arts Center, the renovation of the West Stands at Memorial Field and Buchanan Hall.
- We will complete planning already under way for projects which would then require additional financial resources before proceeding to the next phase: Class of 1953 Commons and the C. Everett Koop Medical Science Complex.
- We will defer projects where we recognize that sufficient funding is clearly not in place: the replacement of Thayer dining hall and the parking lot on Route 120.
As a result of the comprehensive review of programs, we anticipate that there will be programmatic reductions and changes in operations and service levels. As a result, we expect that there will be fewer staff employees at Dartmouth in the coming years. Before implementing any changes, we will consider the impact on people and services, and we are committed to supporting those affected through any transition period.
We will begin formulating ideas to reduce the budget as soon as possible through a consultative process involving faculty, staff and students. In particular, we will engage the Faculty Committee on Priorities and the Student Budget Advisory Committee to provide input to the College Budget Committee. We have put in place opportunities to offer suggestions through email, the Dartmouth website and physical boxes on campus (for details, go to http://www.dartmouth.edu/~finance). We hope that staff at all levels of the organization will work together in their divisions to provide input. We believe that many of the best ideas for improving efficiencies and practices will come from those engaged in our day-to-day work. Please do not hesitate to share your suggestions.
In previous years we have tried to have the final budget for the next fiscal year in place by early May. Despite the need for frequent consultations between the Budget Committee and the various departments, we will attempt to expedite that process and finalize plans over the next three months. During that time we are committed to communicating clearly about the financial environment and our progress and plans.
We understand that this is a difficult financial period for Dartmouth and for many of those in our community. Hard decisions lie ahead. We will need to use our resources wisely and creatively in order to keep us moving forward and preserve the very distinctive characteristics of Dartmouth that make it a special place to learn and work.
Thank you very much for your support and assistance in addressing these problems.
Executive Vice President,
Finance and Administration
August 14, 2013
Breaking: Of Crips and Bloods and Memories of Ghetto Parties
History repeats itself, first as tragedy and then as farce, or sometimes it just repeats itself. From the New York Times on November 30, 1998: At Dartmouth College, white students at a ”ghetto party” dressed…
June 25, 2013
Dean of the College Charlotte Johnson’s War on Students Part (2/2)
Part 1, Part 2 Today’s post again recounts the events that befell the Freshman. However, the content of the Hanover Police department report reproduced in this space yesterday is supplemented by information from my own…
October 18, 2009
When Love Beckoned in 52nd Street
We were at San Francisco’s BIX last evening, enjoying prosecco, cheese, and a bit of music. A full year of inhabitation in Northern California has unraveled to me no decent venue for proper lounging, but…
October 9, 2009
D Afraid of a Little Competish
So our colleague and Dartblog writer Joe Asch informed me that the D has rejected our cunning advertising campaign. Uh-oh. The Dartmouth is widely known as a breeding ground for instant New York Times successes,…
September 4, 2009
How Regents Should Reign
As Dartmouth alumni proceed through the legal hoops necessary to defuse a Board-packing plan—which put in unhappy desuetude an historic 1891 Agreement between alumni and the College guaranteeing a half-democratically-elected Board of Trustees—it strikes one…
August 29, 2009
Election Reform Study Committee
If you are an alum of the College on the Hill, you may have received a number of e-mails of late beseeching your input for a new arm of the College’s Alumni Control Apparatus called…
- The Dartmouth College Case
- 2007 Trustee Election
- Dartmouth Constitution
- Sunday Morning Sinatra
- The Indian Wars
Subscribe by Email
This website reflects the personal opinions of its authors. Any e-mails received may be published along with the full name of the sender. If you wish otherwise, please say so.
All content appearing at Dartblog.com should be presumed copyright 2004-2015 its respective bylined author unless otherwise noted or unless linked to original source.