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Endowment Yields 19.2%; Rises to $4.5B
The endowment has risen from $3.73 billion to $4.50 billion as the College announced that its investments yielded a 19.2% return. That’s the best performance since the blowout at the top of the dot.com bubble in 2000, when the endowment rose by a mind-numbing 46%. (As a cautionary tale, it fell by 3%, 6% and 3% over the next three years, and the administration was forced to make painful budget cuts). The College’s calculation is as follows:
The increase reflected net investment gains of $778 million and new gifts and transfers of $146 million, offset by distributions of $189 million to support Dartmouth programs.
By way of background, the draw from the endowment to support the College’s operations each year is about 5% of the total value of the endowment (based on a rolling three-year average).
The real question here is, “Hey Phil, what you gonna do about it?” A jump in the endowment of $735 million will allow the endowment to throw off an extra $36.8 million in a couple of years (recall the 5% draw figure mentioned above). Where will the money go? If past practice is followed, the ever-growing, overpaid staff will get most of it. One might expect that this is how things will go this time around, too — after all, most faculty members received a raise of only 1.5% this summer, with some getting a meager performance raise on top of that figure.
I’d suggest that right now Phil announce that he is allocating a good chunk of this money to reducing tuition. The 2.9% increase for this year was twice the rate of increase in the Consumer Price Index, even though Phil had promised increases in line with inflation. He justified that commitment on the basis that investment returns would probably be moderate in the coming years. How happy he must be to have been wrong. In 2013, the College took in about $120 million in undergrad tuition (not including room/board and fees). Using part of the new $36.8 million could make a big dent in that figure.
If Phil is the bold President that I hope him to be, he could announce right now that next year we will match Princeton for the lowest cost of education in the Ivies: $55,440/year. Dropping from the current $61,947 to that level would cost us something in the range of $16-$18 million dollars, not even half of the new budget money made available by the endowment’s wonderful return. And Phil could set a further goal of reducing that figure even more in the future, if endowment returns allow it. His three-year goal could be to make Dartmouth the most affordable school in the Ivies. Long live, Phil!
Addendum: Beyond the intrinsic nobility of such an ambition, a bold statement by Phil would get us on the front pages of national newspapers for something other than rape, binge drinking, hazing and racism. Wouldn’t that be a nice change?
Addendum: While the College is thinking of how to spend this extra money, an allocation to revamping dorms would go a long way to improving residential life at the College, as Lorelei Yang wrote in The D today, and as this space has noted, too.
Addendum: None of the other Ivies have reported their results to date.
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
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