The 8% Solution
Posted on March 20th, 2009 in Uncategorized | 7 Comments »
As Harvard mag reports, the university has announced that endowment distributions will be cut 8% for FY 2010.
…the magnitude of the change in endowment support for operations—apparently the result of a recent Harvard Corporation decision, deferred from last fall, when the credit crisis and recession were just unfolding—is larger than many units had anticipated.
How bad is it and what will it mean for everyday life at Harvard? You tell me….
7 Responses
3/20/2009 8:42 am
Among other things, I wonder if this means that even if the early retirement attracts enough people to avoid layoffs this year, won’t there be the same pressure to cut people next year? And if so, the “easy” and “voluntary” cuts will have already occurred.
3/20/2009 12:40 pm
Richard,
According to The Crimson, there were two 8% decreases announced, one for fiscal 2010 and one for fiscal 2011. From a financial standpoint, that seems about the right response if the portfolio is down 30% or so from 6/30/08. These cuts, hopefully, will cause a very thorough review of basic long term structural changes that are needed at Harvard… real structural changes. This is the time to do it.
Richard T, you love this… actually you won’t. I was speaking to one of my friends who works in The FAS. This person was bemoaning some cuts e.g. the library. Then this person said to me the following (paraphrase): how can The FAS slash funds for the library and other key areas and at the same time grant the AD permission to give raises to a number of coaches in the athletic department? How can several “name professors” go around the divisional deans when the divisional deans deny something (e.g. more money for particular people or projects) that these professors want, and head straight to the Dean of The FAS who grants the money. The structure was set up so that each divisional dean made the decisions in their area. How can this be happening at a time like this.
I know this person well. If this is what this person said, it is the truth. These are minor things, but they all add up.
Doesn’t something seem wrong?
3/20/2009 1:34 pm
Yes, Sam, both of those scenarios would be very wrong — and also, sad to say, not surprising. In my patch, as far as I know, people are behaving in good faith, attending to teaching and research, and the support of it, which used to be all it was about, and cutting back where possible.
The only exceptions to hiring freezes and the like (there should be none with respect to raises) should be ones that have to do with the continued strength of programs, as argued for by departments and their chairs. Threats to decamp should be ignored.
Any severe decline in Harvard’s library funding effects the strength of the institution and is irreversible, and if individuals are bellying up to a diminished trough for their own aggrandizement or enrichment that is deplorable and should simply stop.
Ed elli a me: “Tutti quanti fuor guerci
sì de la mente in la vita primaia,
che con misura nullo spendio ferci.”
Speaking of poets, Alex Beam has an excellent column in today’s Globe:
http://www.boston.com/news/education/higher/articles/2009/03/20/dylanology_101/
Time we gave Dylan an honorary degree!
3/20/2009 4:44 pm
RT,
At Harvard, unfortunately, Ed elli a me … ch’una gente impera e l’altra langue.
It shouldn’t be that way.
It should be… distribuendo igualmente la luce.
Shouldn’t The Faculty be protesting against what is happening? Shouldn’t voices be raised?
NB. I think you meant affects, not effects
Best,
Sam
3/20/2009 6:00 pm
Sam,
Yes, affects, and you mean RT, You love this . . .
The pretense of a non-star system has always been part of the game, but you’re right: when reduced resources threaten the core enterprise things need attention. . .
3/20/2009 6:01 pm
“You will love this”, that is.
3/23/2009 7:53 am
Unfortunately, what Sam has heard is true. And Mike Smith doesn’t seem to know how to say “no” or how to set a strategy.
Even in his latest email to faculty and staff, announcing the 8% cut in endowment payout, his focus was on the need to “protect our core mission, to support our priorities and even to pursue some new initiatives.” Well, what priorities? What initiatives? And what are we actually going to cut? The Dean isn’t saying. He’s letting each department decide, and so far he’s backing down if they complain. And I get the impression that someone thinks we can cut staff without cutting programs, which is worrying on a number of levels.