FAS Hopes For Increased Endowment Funding

Senior administrators in the Faculty of Arts and Sciences have provided loose guidelines to departments for long-term financial planning that foresee a growth in the distribution from the University endowment to pre-2008 nominal levels by 2018.

The guidelines plan for 2 to 3 percent yearly growth in the distribution to FAS, or the amount the school receives annually from the University-wide endowment, according to department administrators in FAS.

Administrators in FAS caution that the timetable is tentative, requiring a consistent increase in the endowment for the next ten years. The Harvard Corporation, the University’s highest governing body, adjusts the amount withdrawn from the endowment based on its performance.

But a distribution increase would relieve some of the financial pressure on FAS, which receives roughly half of its budget from the endowment and is still recovering from an original $220 million deficit.

“It means that we can take a deep breath instead of holding our breath,” Department Administrator for History of Art and Architecture Deanna Dalrymple said in an interview last week.

“It’s not a cut. It’s not a static situation. And it’s at least a number in the positive column,” she added.

In the wake of the financial crisis, the University endowment fell about 30 percent, putting pressure on the budgets of schools across the University which depend, in part, on funds from the endowment.

At the time, FAS Dean Michael D. Smith asked departments to cut 15 percent of their respective budgets, which were followed by additional cuts the next year. During that period, more than 75 staff positions were eliminated and faculty hires were greatly reduced.

FAS is still facing a $35 million deficit, which Smith has said he expects to close by the end of fiscal year 2012.

“We’re not out of it yet—and we still need to feel pressed to maintain our cut budgets,” said another department administrator, who asked to remain anonymous to preserve her relations with the administration. “But the increase is certainly a positive step.”

Dalrymple, the History of Art and Architecture administrator, said that an increased FAS budget could “mean more opportunities for academic enhancement” that might include lectures and symposia.

The departmental budgets should be concerned about more than “buying paper clips,” Dalrymple said. The growth in budget will support “putting more focus on the academic ambition,” she said.

The recent planning guidelines follow reports from last fall that the University has advised schools to plan for a 4 percent rise in the value of the endowment distribution for the 2012 fiscal year, marking the first yearly increase since the beginning of the financial crisis in 2008.

The distribution fell 8 percent in the 2010 fiscal year, dropping another 12 percent for the following 2011 fiscal year, reflecting the precipitous drop in the value of Harvard’s endowment between June 2008 and June 2009.

—Staff writer Gautam S. Kumar can be reached at gkumar@college.harvard.edu.

—Staff Writer Zoe A. Y. Weinberg can be reached at zoe.weinberg@college.harvard.edu.