University Cost Savings
Financial Context
The University has been prudently managed and is fortunate that its endowment has grown at an above average rate in recent years. In April 2009, the University embarked on a two-year plan to seek significant administrative savings as part of an effort to reduce spending by $88 million in fiscal year 2010 (July 1, 2009-June 30, 2010) and by $82 million in fiscal year 2011 for a total of $170 million. At that time, the endowment, which provides almost 50 percent of Princeton’s operating revenue, was expected to decline in value by 30 percent by June 30, 2009, the end of the fiscal year. The return on the endowment during the 2008-09 academic year actually was down 23.7 percent.
While the decline in the value of the endowment was not as steep as originally predicted, the University still is “spending more than is prudent for the long-term well-being of the University,” according to President Tilghman in a Sept. 29 letter to the University community.
The following links provide additional information on endowment spending, identify guidelines and provide answers to Frequently Asked Questions as we navigate these difficult times.