Let's save for the University

fallenchemist
Fri, 24 Apr 2009 08:26:54 +0000

OK, I know this is way oversimplified and all, but just to kind of make a point…

They are eliminating people’s jobs in a very tough economy, while at a $22.5MM per year deficit with the current value of the endowment of $3.8B, they could still operate for about 170 years. And I think they can count on the value of the endowment recovering to some degree at least. There is nothing wrong with being prudent of course, and running a university is like running a for profit business in many ways, but in many others it is not. I would like to know if, in previous years, they operated at or above break-even, and this deficit is mostly due to students needing more aid. If so, that is also likely temporary, and given the cushion they have it seems like they could wait a bit to see if things recover in the next year or so. And nooob is right, there are other things they can do besides eliminate jobs. I will give credit to Mark Wrighton, the university president, though. He took a 10% pay cut. Not that he isn’t still making a lot, but it is a big job and he has obviously done well, despite this deficit.

Freezing salaries and hiring, other cost saving measures I can see. It just bothers me that they eliminate jobs when they have a sizable cushion like that. While the main purpose of endowments might not be as “rainy day” accounts, I see no reason it can’t be used like that for a short time when it would have little impact percentage wise (0.6%) on the value of the endowment, and would make a huge difference in these people’s lives.