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Endowment drops another 5 percent

Published: March 6, 2009
Section: Front Page


the_hoot_3-6-09final1_page_01_image_0005The university’s endowment has dropped 30 percent, university President Jehuda Reinharz announced at yesterday’s faculty meeting. The figure is worse than the 25 percent figure that university administrators had projected earlier in the semester.

Reinharz made the announcement in an effort to encourage faculty members to vote in favor of the proposed Justice Brandeis Semester and new Business major at a faculty meeting yesterday.

Both proposals were put before the faculty as ways to attract more students to the university, thereby increasing tuition revenue to help offset the university’s projected $80 million operating budget over the next five years.

“Of course, the endowment can get worse,” Reinharz said. “We need to use our creative minds to think out of the box to figure out how we can fix this. We need to take concrete action, beginning with the proposals the [Curriculum and Academic Restructuring Steering committee] has given us today.”

Reinharz also said that the university does have some “breathing room” before it begins to feel the full impact of the decreased endowment because of the university’s emergency fund, which was created in the mid-1990’s. The fund should last the university until 2010, giving the university roughly two years to balance the budget.

Dean of Arts and Sciences Adam Jaffe told the faculty that without passing the CARS proposals, “there is nothing else of this size that is permanent enough to contribute to closing the [budget] gap.”

Both CARS proposals were passed by the faculty at the meeting yesterday, and will go before the Board of Trustees on Mar. 25.

If the proposals are passed, and bring in the projected revenue, the university must still cut $10 million in order to balance the budget by 2014, Faculty Budget Committee Chair Prof. Peter Conrad (SOC) told the faculty yesterday.

“That’s assuming that the market is beginning to recover by 2011,” Conrad said. “That’s no slam dunk.”

Other options for closing the gap include: raising tuition by 5.5 percent, cutting 91 faculty members, cutting 120 staff, reducing faculty benefits, reducing faculty salary, taking out more loans, doubling fundraising and selling university assets (which could include art from the Rose Art Museum).

“All of these options are either difficult or impossible to implement or would not work quickly enough,” Conrad said.

Reinharz said that he has been talking with potential donors in an effort to reduce the deficit, but that not only are many donors simply unable to contribute to the university due to their own economic woes, but it is also exceptionally difficult to convince donors to donate to the endowment.

Instead, Senior Vice President of Institutional Advancement Nancy Winship is focusing the Department of Development and Alumni Relations gift-soliciting efforts on paying for financial aid.

Reinharz urged faculty members to not panic about the university’s financial woes, reminding them that, “Brandeis was founded on daring faith. This is a challenge, but it is not an insurmountable obstacle.”