A look into the College’s tax returns from a year interrupted by COVID

Rachel Schmidt

The College’s tax returns for the fiscal year ending in June 2020, after the start of the COVID-19 pandemic, show a decrease in charitable giving to organizations in Berkshire County and a lower net return on the endowment than the College’s goal for investment returns.

In the 2020 fiscal year, which ran from June 30, 2019 to June 30, 2020, the College donated a total of $249,309 to seven organizations, marking a large decrease from the previous fiscal year, in which the College donated a total of $763,000 to 14 recipients.

The Williamstown Police Department (WPD) received a grant of $400,000 from the College in the 2019 fiscal year to construct a new police station, a sum nearly five times the College’s second largest donation that year, $86,381, to Northern Berkshire Emergency Medical Services (EMS). The College did not provide any financial support to the WPD in the 2020 fiscal year.

In the most recent fiscal year, the College financially contributed to a mix of local businesses and organizations in Berkshire County. “The College focuses on opportunities and needs that affect the most Williams students, faculty, and staff and those that address the most pressing community needs in the areas of education, healthcare, diversity, and economic development,” Provost Dukes Love wrote in an email to the Record.

With the exception of the 2020 fiscal year, the College has routinely donated to local emergency services — such as the Williamstown Fire Department (WFD) and Berkshire EMS — over the last five years. Love said that this was because the College contributed significantly to the merger of the Village Ambulance Service and North Adams Ambulance Services into North Berkshire EMS. The College’s large donation was “an intentional one-time contribution to transform EMS into a service that was more financially viable and self-sustaining,” Love added.

However, Love noted that the College’s tax returns do not show the full extent of the College’s charitable giving. “Williams … invests in the community in lots of ways that don’t show up in the annual charitable contributions, including CLiA’s involvement in schools … [and] paying our employees who are volunteer firemen when they are on call,” Love wrote.

Tax filings from 2020-2021 have not yet been published; in an email to the College community, President Maud S. Mandel said they would be available on the Investment Office’s website later this fall.

The early impact of the pandemic on the economy is evident in the 2020 fiscal year’s tax filing, particularly with regards to the endowment’s lower growth through investment than in typical years. While the College endowment ended the 2020 fiscal year with a net investment gain, it was significantly less than the net gains of previous years. The 2021 fiscal year, in contrast, proved to be one of the College’s most successful in the past two decades, with a 49.9 percent return, per Love.

In the fiscal years ranging from 2016-2019, the College’s average financial gain from investments was $285,944,333, but in the 2019-2020 year, the net financial gain from investments was only $86,454,800. According to the Investment Office’s annual report for the fiscal year ending June 30, 2020, the College’s investment achieved a net return of 3.3 percent.

Although this was below the College’s investment goal of a 5-percent return, the College’s net financial gains suggest that the College may have been on track for an average investing year until the pandemic-related economic downturn in March 2020 that caused unexpected drops in investment gains.

However, aspects of the pandemic may have saved the College money in the 2020 fiscal year. Expenses for conferences, conventions, and meetings fell significantly, with a 33-percent decrease compared to the previous year, for a net difference of $87,964. The College also spends a significant amount of money every year on travel expenses, with an average of $6,907,294 per year between the 2014 and 2019 fiscal years.

In the 2020 fiscal year, travel expenses amounted to $5,461,823, saving the College almost 1.5 million dollars.