It's been a year of big spending for Harvard.
With the promise of an extra $2.1 billion in its coffers as the capital campaign nears a successful conclusion in December, the administration broke from its recently conservative fiscal policies.
There were hints of this financial confidence when despite the endowment's summertime $1.3 billion plunge, administrators continued to implement long awaited--and expensive--changes. According to some officials, the market ills spurred by the Asian financial crisis even served as a catalyst, proving that Harvard could survive financial downturns.
In September, following the lead of competitors like Princeton, Stanford and Yale, Harvard added $10 million to its budget for financial aid, improving individual packages by $2,000 each.
Later in the fall the University announced an increase in endowment pay out--the percentage taken from the endowment each year--symbolizing a greater financial commitment to current students.
In addition, Harvard has planned--and in some cases begun--the renovation of older buildings and the construction of new facilities. The Holyoke Center, for example, was renovated for $1 million this spring. The result? Doors.
Behind the scenes the Harvard administration asked for a dean's resignation and appointed a new vice president for government, community and public Affairs.
After this year, both Harvard's physical face and its public persona will have undergone a makeover.
Ups and Dows
University officials attributed the yo-yo effects of Harvard's endowment to stock market turmoil, not changes in alumni giving or troubles in the $2.1 billion capital campaign.
Quoted at an all-time high of $13 billion in June 1998, the endowment, Harvard's stockpile of funds, lost 10 percent of its value during the summer months--three percentage points more than the forecasted drop of 7 percent. Harvard was not alone; universities across the country experienced losses of 6 to 10 percent.
The rapid plunge followed five years of higher-than-expected endowment growth in schools around the United States brought on by the bull market. Havard's funds grew by 20.5 percent during the fiscal year that ended last June.
The University's financial managers expressed optimism about the long-term stability of their investments, and spent accordingly. In December the administration announced a plan to add $95 million from the endowment to the University's operating budget. The changes will make possible financial aid reforms, new construction and new hiring within the Faculty.
Double the Billion
Time is running out in Harvard's quest for $2.1 billion. Fortunately, the six-year University-wide capital campaign has been largely successful, inching 7 percent closer to its goal in the past year.
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