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BREAKING: College to Cut $20-$25 Million of Non-academic Costs

Rick Mills8.jpgWell, it’s about time. At a regular Town Hall meeting for the College’s staff, Executive VP Rick Mills announced yesterday that the administration would trim $20-$25 million from the non-academic side of the budget over the next four or five years. In his usual straightforward style, Mills stated, “The three primary revenue sources for the College are under immense pressure:… increases in tuition… federal funding for research… endowment generally and philanthropy.” Given that hikes could not be expected in any of these areas in the coming years, cost savings would have to be found.

Mills said that he would look to reduce the budget in three ways:

— Not filling open positions

— Voluntary separations [i.e. early retirement or other buyouts]

— Non-voluntary separations [i.e. layoffs]

Curiously, Mills poor-mouthed the College. He justified the cuts as being due to cost pressure, even commenting disparagingly on the endowment — which is “smaller than other schools.” That’s plain wrong. As we have repeatedly pointed out, the College has a larger endowment/student than all of the other Ivies, except HYP, and by a wide margin:

Ivy League Endowment Per Student 2014.jpg

If we are feeling cost pressures, they are due to flagrant overspending.

Addendum: At one point, Mills stated that part of the savings from the budget cuts would go to increased faculty salaries. Let’s see if the faculty stands with staff this time around.

Addendum: At the Town Hall meeting, special guest Senior Vice President for Advancement Bob Lasher ‘88 noted that among the financial pressures facing the College, the administration could not expect significant gains in coming years from the Dartmouth College Fund — unrestricted gifts given by alumni to support financial aid. He commented:

Over the last five years it [DCF] grew by 10% annually— that was a rate that we were able to achieve, which is extraordinary; I think that we need to find a more modest level like 3% or something.

Lasher congratulates himself in error, as a brief summary of the DCF line in the College’s annual financial statements shows:

DCF 2004-2016 ChartA.jpg

Despite the financial crisis of 2008-9, the DCF grew strongly between 2004 and 2013 (note that the 2013 fiscal year ended on June 30, 2013). Phil Hanlon’s presidency began on June 8, 2013, at the end of a period of particularly strong increases in DCF donations. In the three fiscal years in which Hanlon has led the College, there has been no growth in the DCF at all — especially not 10%/year. Where did that figure come from? Overall giving has not even returned to 2013 levels. Are alumni pausing to evaluate the Hanlon Presidency? Whatever is happening, Lasher should get his facts and figures straight.

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