A week has passed since the University announced a surge in its endowment, but the Faculty of Arts and Sciences has not asserted plans for responding to Harvard’s new-found wealth after two years of rigorous cost-cutting.
The University announced last Thursday that its endowment grew to $27.4 billion in the fiscal year ending in June 2010, an 11-percent investment return that marked a positive turnaround in the midst of the financial crisis.
When asked about the effects of the endowment growth on FAS finances, spokesman Jeff Neal said that FAS Dean Michael D. Smith will update the community about the school’s financial status at the first Faculty meeting of the year in October.
Because FAS finalized its budget by the summer, the University’s endowment growth will have no effect on the school for the current academic year. But Harvard’s stronger endowment—which funds 50 percent of the school’s budget—could provide some fiscal relief for FAS next year.
The endowment payout—the percentage allotted for FAS expenditures—fell 12 percent for the current academic year. But the Corporation, Harvard’s highest governing body, has yet to announce the payout for the subsequent year. In financially calm periods, the Corporation provided predictions to individual schools by the beginning of the spring semester.
FAS is currently in the midst of its third and final phase of budget reform, which involves the implementation of long-term financial changes that will entrench smart spending habits for the future. Indeed, some department leaders said that the discourse has steered away from immediate cost-cutting to larger restructuring.
But FAS department leaders and staff workers described mixed signals about the status of FAS finances, given that the administration’s conservative spending habits contrast with the endowment’s uptick and the near-complete closure of FAS’ deficit.
At a meeting for FAS staffers yesterday, the administration introduced to attendees the Harvard Crimson Online Marketplace, a University tool that aggregates departmental purchases and helps departments find more competitive prices.
But at the very same meeting, a hint of optimism appeared when a FAS Human Resources official presented a handbook for staff hiring—a message that marked a stark departure from the staff hiring freeze in 2008 and the wave of staff cuts the following year.
In the face of uncertainty surrounding the state of FAS finances, departments have begun their annual reviews of their inventories and their planned requests to Smith.
“We are always bold in our requests,” said East Asian Languages and Civilizations Chair Wilt Idema. “We are always convinced that the requests we make are fully justified.”
Though his department, like most throughout FAS, has felt pinched and seen many of its requests denied, Idema said he is “looking forward to a future in which we have a better situation.”
But some staff workers expressed frustration with the amount of funding they are receiving from Smith. The Classics Department, for example, is dealing with a section of 19 students—one more than the target section-size—in light of the enforcement of section size restrictions last year, according to an administrator who asked to remain anonymous to protect a relationship with the administration. The College, the administrator said, has been unwilling to hire an additional teaching fellow for the course.
“I think they’re being very stingy,” the staff member said of the FAS administration.
Opportunities to hire new faculty are also slimmer than they have been during flush years—particularly tough for a small department like Classics that has seen several professors leave in the past two years without the funds to replace them.
One top Humanities administrator said that the department will hold guest lectures for the first time in over a year. But the administrator, who requested to not be named for the same reason, described FAS’ approach as “guarded optimism.”
“We’ve been so discouraged from thinking of that kind of thing that we really don’t have our minds on that at all,” the individual said. “We’re just hoping that there won’t be more cuts.”
—Staff writer Noah S. Rayman can be reached at firstname.lastname@example.org.
—Staff writer Elyssa A.L. Spitzer can be reached at email@example.com.
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