Last Sunday, President Bennet attended the WSA weekly general assembly meeting in order to discuss the financial aspect of the University’s Strategic Plan.
The principal financial issue discussed was the large percentage the University draws each year from its endowment. While the University has met its endowment mark for the past three years, the spending allowance that is taken from endowment funds is much higher in relation to other small liberal arts colleges.
“We are not going to catch up with [Williams and Amherst], but we can make sure that we stay focused and remain competitive,” Bennet said.
Both Williams and Amherst have an endowment per student that is 2 to 3 times greater than the University’s.
A smaller endowment fund reduces the amount of financial aid available to students. Colleges like Princeton, with very large endowments, are able to provide a greater number of full scholarships. The issue of financial aid is especially important in light of the University’s predicted tuition increase of five percent every year. According to Bennet, this number is consistent with the rise in tuition at comparable schools.
Another important consequence of a lower endowment is the overall affect on college rankings. According to U.S. News and World Reports rankings, the University has maintained its reputation for academic excellence, but its position overall has fallen to twelfth place in the category of “Best Liberal Arts Schools of 2006.”
Bennet acknowledged that he would like all decision-making to act independently of publicized rankings, but he did address the effect these numbers have.
“We cannot ignore the fact that these rankings are very influential on our growth and progression,” he said. “I think it is very important to be among the top ten, and it is much easier to do that with money.”
In order to effectively reach its financial goals, the Strategic Plan proposes a decrease in the percentage of the endowment the University uses each year, which presently lies at 7.4 percent due to various investments and the costs of the fundraising campaign. While the Plan originally called for a reduction down to 6.5 percent, the Board of Trustees has asked that the University consider aiming for as low as 5.5 percent, according to Bennet.
Bennet said that the reduction will not come all in one year, but over a five-year period.
“We think we can do this without even a ripple,” he said.
He stressed that the Plan concentrated not on the reduction of services to students, but on decreasing the costs of existing services.
But the lowering of University spending will not go without its effects. Predicted outcomes include the stabilization of salaries and the cutting of some non-faculty positions at a rate of approximately six employees per year.
Such changes can be minimized in part due to continued efforts in fundraising, which has been extremely successful in the past few years. The University’s latest campaign resulted in a total of $281 million.
The Strategic Plan consists of a comprehensive, five-year proposal that touches on various facets of student life, including academic excellence, campus community, and facilities. The document was publicized last March and is available to students on the University website.
Bennet said that at the core of the Plan is a strong emphasis on fundraising and the managing of finances, which is essential for the funding of any future University endeavors.
“In general, the plan is in good shape, and the science of it is extremely interesting and exciting,” Bennet said.
Leave a Reply