President's Pages in Princeton Alumni Weekly
Turning the Corner
May 12, 2010
I'm writing this column on a quintessential Princeton spring day. The sky is a brilliant shade of blue, the magnolias are in full bloom around Scudder Plaza, and students are spread out on Cannon Green, soaking up the warmth of the sun after weeks of unseasonably cold rain. Renewal is in the air—a fitting metaphor for the University as we continue to weather the economic storms of the last 18 months.
Last September I reported to the members of the Princeton community that the University had responded quickly and aggressively to the 23.7 percent decline in the value of the University’s endowment as of June 30, 2009. The senior administrative team, led by Provost Christopher Eisgruber ’83, Executive Vice President Mark Burstein, and Vice President and Treasurer Carolyn Ainslie, developed a two-year plan to reduce the operating budget by $170 million, and eliminated almost $1 billion from the 10-year capital plan. Thanks to their dedication and hard work, along with that of so many faculty, students, and staff, I can now report that we are ahead of schedule in executing the plan and meeting our savings targets for this year and next.
The other encouraging piece of news is the rebound in the value of the endowment. Last spring we had conservatively projected that the endowment would experience no growth during the 2009–10 academic year. Happily, Andrew Golden and his colleagues at Princo have exceeded our gloomy expectations, and it is very likely that we will end this fiscal year on June 30 with positive growth. With the combination of disciplined spending and the endowment’s better-than-expected returns, the draw from the endowment next year will once again fall within the prudent band of 4–5.75 percent that preserves its spending power for future generations.
The goal of our cost savings was to protect the educational experience of our students to the greatest extent possible, and I believe we have succeeded. Through a combination of vacancy savings, voluntary incentivized retirement plans for both faculty and staff, cutbacks in the number of visiting faculty and fellows, and a small number of layoffs, we are a smaller University community than we were a year ago. Our landscaping plan, which had begun to restore and enhance the verdant beauty of the campus, has been slowed down for the time being. Plans to renovate Frick and Hoyt Laboratories to create expansion space for humanities and social sciences departments when the chemistry department moves down the hill to its fabulous new home later this year have been put on hold. The faculty, staff, and graduate student parents will have to wait a little longer for the new day care center that would have provided much needed additional capacity.
Despite these reductions and delays, there is still a great deal to celebrate on campus. Not a single undergraduate or graduate student has left Princeton in the last eighteen months for financial reasons. We have been able to preserve our commitments to financial aid and graduate fellowships, and even to increase them this year and next to accommodate those families who have been affected by the recession. As I wrote in the last column, the Bridge Year students are having life-changing experiences around the world and serving as powerful ambassadors for the University. The women’s basketball team created a buzz on campus by winning the Ivy League championship and playing in the NCAA tournament for the first time in their history. And just recently the Board of Trustees approved the start of construction on the new neuroscience and psychology buildings, thanks to the extraordinary generosity of a handful of our most loyal alumni, who joined together to help us fund the project.
I continue to be very proud of and grateful to everyone in the Princeton community who pitched in to insulate the University from the worst of the recession—from students who campaigned for sustainability projects that have saved us thousands of dollars to alumni, parents, and friends who have supported Annual Giving at a time when their own budgets were pinched. This has been, in many respects, Princeton’s finest hour. At the same time, it is critical that we maintain the budgetary discipline that has served us well, and remain attuned to the uncertainty that continues to plague the economy as it slowly recovers. This is not a time to rest on our laurels, but it is a time to say a heartfelt “thank you.”