Endowment up 8 percent since October

As of Dec. 31, the College’s endowment stands at about $1.4 billion, an approximately $100 million or 8 percent increase since its value was last estimated by President Schapiro in late October. On June 30, it stood at $1.8 billion.
The current endowment forecast is merely speculative, however. “[1.4 billion] is the figure reported on our books but the endowment’s actual value is bound to be lower,” said Collette Chilton, chief investment officer. “The figure doesn’t take into account the fact that the portion of the endowment that is illiquid must also be down, by an amount that we won’t know until it can be assessed later in the fiscal year.”

Most asset classes had positive returns in December, according to Chilton. Equity markets, which compose almost 50 percent of the endowment and accounted for the endowment’s sharp decline this fiscal year, have also started to rebound. The Russell 3000, a broad U.S. equity index, returned 1.9 percent in December, Chilton said. Bonds and investments in equity markets of developing countries also rose.

The College’s endowment had no exposure to the Bernard L. Madoff’s $50 billion ponzi scheme. Peer institutions, however, were not as lucky. Tufts University and New York University lost 20 and 24 million dollars, respectively, because of the scheme.
The endowment is composed of global equities, absolute return, private equity, venture capital, real estate, real assets, fixed income and cash.

Cost-cutting campaign continues

Despite slight increases in the endowment’s value, the College has continued curbing its spending by reducing budgets of all departments and programs and suspending the Williams in New York (WNY) program.

In addition to previous budget reductions, these cuts are expected to reduce this year’s College operating budget by $3.5 million, bringing it from $216.8 million to $213.3 million, according to Bill Lenhart, provost and treasurer.

Senior staff decided that all departments and programs are to reduce their spending by 12 to 15 percent this year, and another 6 percent next year. “Each department will need to carefully review all of their expenditures, and will need to work closely with senior staff to identify those reductions that minimize the impact on its ability to carry out its core activities,” Lenhart said.

In order to be able to achieve these goals, Facilities is in the process of undergoing “a complex analytical exercise that will likely require many of its organizations to completely rethink how they deliver their programs and services,” said Steve Klass, vice president for Operations.

For academic department chairs, achieving these reduction levels has not been as arduous. The budgets they manage comprise of operational costs including the likes of supplies, special events, lectures and equipment while excluding salaries and other instructional costs that directly impact the quality of instruction and number of course offerings.

“When I sat down to go over the budgets last weekend I realized that there was much that we did that enhanced student educational experiences but were not wholly central to the core instructional mission of the department,” said Chris Waters, professor and chair of history. “Consequently, it seemed that a little pruning of the number of outside visitors and formal lectures could be done with ease, as could watching how many receptions we have, scaling back on the food at those receptions, cutting down on the amount we may fund optional fieldtrips, and so forth.”

Jana Sawicki, chair and professor of philosophy, echoed Waters’ sentiments. “We are taking the cuts in areas that will have little to no impact on curriculum or students,” she said. “The dean and provost are very clear that the educational mission, faculty and curricular development, student aid, etc. will be preserved.”

Although these reductions do not affect payroll, Lenhart speculates that salaries will not increase next year. “Final decisions on salaries have yet to be made, but raises, if any, will be minimal,” he said. “We are very fortunate, though, that unlike many organizations, we have not had to lay off a single employee as part of our cost-reduction efforts.”

Suspension of WNY is expected to result in an annual savings of $325,000, according to Bill Wagner, dean of the faculty. “It seemed more responsible to suspend this one program – particularly in light of the vote at the November faculty meeting not to continue it in its current form – than to cut a number of other academic and faculty support programs even more deeply than still will be necessary,” he wrote a few weeks ago in an all-campus e-mail.

The College also launched a Web site in November allowing students and faculty to leave anonymous cost-cutting suggestions. “We’ve received many good ideas from the cost-savings idea Web site,” Klass said. “One of the ideas that received several mentions was to close campus completely (or as completely as possible) over the break. We did experiment with that this year.” Other recommendations are currently being compiled into a report to be released in the near future by Klass.

Other cost-cutting measures include suspension of the Weston Field and Stetson-Sawyer Projects, reduction in faculty and staff hiring and maintenance and a two percent reduction across all operating budgets excluding payroll.

“The reduction goals that we are setting for ourselves will not be easy to achieve, but we are confident that they can be achieved while still preserving our ability to offer our students an outstanding education, and of doing so while meeting their full demonstrated financial need,” Lenhart said.