jblevins

There is a thread about this already, but it isn't going anywhere. I wanted to ask pointedly: what will be the effect, if any, of these new 100 million and 25 million dollar gifts?

I am particularly interested in interesteddad's opinion. He and others have painted a bleak picture about Amherst's current financial state, indicating that the school is in a somewhat worse position than schools of similar caliber and size. What does everyone think now? Will these gifts immediately correct all wrongs, or just put us on a corrective path, or will they not do much? Since they are for the CC campaign, will they be committed to buildings projects and faculty expansion, or do people think the money will go into endowment resuscitation?

Corbett

Note that the new pledges, while obviously huge for a LAC, are to be provided over a five-year period. So the immediate infusion of cash is probably much less than $125M.

For example, Amherst may well receive "only" $25M this year, with similar amounts to follow over the next four years. That's great over the long term, but it may not be enough to resolve the short-term cash flow issues. For example, Amherst had to borrow $100M for working capital earlier this year.

I don't think anybody who reads this is in a position to provide a definitive answer to your questions. Those interested in Amherst's financial status might try using faculty hiring and Merrill Science Center as barometers, as those are two of the most pressing institutional needs. If Amherst announces an expansion of new faculty positions to correspond with the planned expansion of enrollment, or if Merrill turns into a construction zone, those would likely be signs of recovery.

Corbett

From the Student: Given the new donations, it seems very likely that Amherst will meet or exceed its $425M fundraising goal. That's obviously good, since an assumed gain of $425M has already been built into future budgets.

But again, note that Amherst does not necessarily have $350M on hand as of right now. Much (perhaps most) of that $350M may actually be in the form of pledges to be delivered over the next several years.

My hunch (and it's nothing more than that) is that Amherst will most likely remain conservative about spending for the next few years, until the capital campaign is over and all of the pledged cash is actually in hand. I expect that Amherst will then start undertaking expensive improvements, like expansion of the faculty and renovation of Merrill. However, those applying to Amherst now may graduate before this happens. I stress again that this is just my guess, and I could be wrong.

flufflyone

Why would you give interresteddad so much power to influence you? He is NOT intimately involved with the finances at Amherst no matter what he purports to know, and clearly he wants to engage in negative speak toward the college. Why is he so invested in negative speak in the Amherst threads is my question? Do your own research and investigate through discussions with Amherst College officials and from data that speaks for itself.

johnwesley

I agree with Corbett. Amherst's biggest problem was never a purely economic one; a couple of adjustments to the student/faculty ratio are not going to significantly change the quality of an Amherst education. What Amherst feared most was that it might suffer the spiral of finger-pointing and recriminations already seen at Harvard. A couple of large donations like this (or, at least, their well-timed announcement) will go a long way to stemming talk among alumni that Marx was on his way out and sends a signal that the worst is perhaps over.

jblevins

Thanks guys. I didn't post this looking for a professional analysis of Amherst's finances. I just wanted the community's opinon, which I've received. I also did not claim that I was in any way invested in interesteddad's thoughts on Amherst. I just wanted to hear them. Calm down folks! But anyway, thank you for the thoughts so far.