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Yale’s Prudent Management
Yale President Peter Salovey announced yesterday in a letter to alumni that the university has received a $250 million gift towards the creation of two new colleges. As a result, the size of the Yale undergraduate body will increase by 15% in the coming years:
To the Yale Community,
I am truly delighted to be able to announce that Charles B. Johnson ‘54 has pledged $250 million—the largest gift in Yale’s history—to support the expansion of Yale College through the construction of two new residential colleges…
With this singularly generous commitment, we are approaching our fundraising goal for the construction and ongoing maintenance costs of the new colleges. I am committed to raising the remaining funds [$80 million] that will allow us to move forward with this project, which will be fully gift-funded.[Emphasis added]
Note my emphasis that Yale will not be taking on debt to fund the contruction of the new colleges — even though Yale’s overall debt-to-endowment ratio is far better than the College’s. We are the second-worst in the Ivies after Cornell:
In plain English, we now have 32.3 cents of debt for every dollar in the endowment. In 2000, we had only 11 cents of debt for each dollar.
Currently the Translational Research Building at DHMC and the North Campus Academic building (both of which will cost more than $100 million) are being funded by our burgeoning debt load. Look at the rise of the College’s debt over the past decade:
Don’t forget that Jim Wright’s capital campaign brought in approximately $1.3 billion during this time frame. You have to work very hard — or be especially incompetent — to spend that much money for so little return.
Addendum: When the Trustees announced last week that, after strong investment returns, the endowment had risen by $247 million in fiscal 2013, they omitted to note that the College had increased its debt by $150 million in June 2012 after a large sale of bonds. Such behavior is akin to a person boasting that they have ever more money in their savings account at the bank, without letting you know that they are now close to maxing out their credit card debt.
In the year 2000, the endowment was at $2.49 billion and we had $286 million of debt, for a net of $2.20 billion. Today we have $3.70 billion in the endowment and we owe $1.13 billion, leaving us with $2.59 billion. Our net resources have risen by only 5% over 13 years — a period of time during which the consumer price index rose by 35.8%.
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…
August 23, 2009
Fare Thee Well, Tom Crady
And now Dean Tom Crady has precipitously announced his departure from the College after only 20 months on the job. How to read this? By way of background, prior to coming to Dartmouth, Crady had…
May 31, 2009
Kangaroo Court, Indeed
In an interview with The Dartmouth, alumni-elected trustee T.J. Rodgers ‘70 explained his reasons for declining to participate in future evaluations of trustees up for “re-election,” namely the “kangaroo court” nature of such discussion in…