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Thayer School's Financial Outlook

Q & A with Dean Joseph Helble

February 12, 2009

How does Dartmouth's budget situation affect Thayer School?

"The major way we're connected is through the endowment. Thayer's endowment is part of the overall College endowment, which is managed by the College's investment staff. What this means is that when the Dartmouth endowment gains value, the Thayer endowment gains value. When the Dartmouth endowment loses value, the Thayer endowment loses value. The Dartmouth endowment has decreased substantially in value this year because of the significant decline in value of the stock market, and Thayer's endowment has declined correspondingly. The asset market value of the Thayer endowment declined 17 percent for the first six months of the current fiscal year, and this results in a projected $1.7 million decrease in endowment-generated income for the year."

How dependent is Thayer School on endowment income?

"Approximately 40 percent of Thayer's budget is supported by tuition, another 40 percent is supported by research, and 20 percent is supported by endowment income and gifts. Those numbers vary slightly year to year. For the current fiscal year, it's actually a little more than 23 percent of our budget that is supported by endowment and gifts. While 23 percent is certainly a large fraction of our operating budget, it's a smaller dependence than that at many of our peer institutions and smaller than that of Dartmouth College as a whole, where 35 percent of the budget is derived from endowment."

Is giving to Thayer School down?

"Just a few days ago, I received the numbers for the first half of our fiscal year, and was pleased to see that giving to Thayer School has remained strong. Although the dollar value of cash contributions for the fiscal year is down 8 percent through December, the alumni participation rate is down only about one percent from last year. The decrease in dollar support certainly poses a challenge, but the continuing solid participation rate is a testament to the commitment of our alumni to Thayer's educational programs. The support of alumni donors at all levels and the hard work of our annual fund volunteers will ensure that giving to Thayer School remains strong through this difficult period."

What impact might the U.S. election have on the level of research support at Thayer?

"It's hard to predict, but we're cautiously optimistic. Throughout the presidential campaign we heard both candidates talk about the need to invest in science and technology and in innovation, the need to address challenges in health care, and the need to invest in reliable renewable energy. These are all areas where Thayer School is strong, has chosen to concentrate, and is building new or expanded programs. If the promised increase in funding to the Department of Energy, the National Science Foundation, and NIH does materialize, I believe we're well positioned to take advantage of it. We'll need to wait and see what Congress and the President do, but, again, we're cautiously optimistic."

Will there be lay-offs at Thayer School?

"There will be no layoffs at Thayer School. Because our funding comes from diverse sources, and two of those sources of revenue remain fairly strong, we do not anticipate any loss of positions. We are, in fact, continuing to move forward with plans to add new faculty to build our educational and research programs."

What will happen with faculty and staff compensation?

"Across the College, including Thayer School, Dartmouth will be freezing salaries for most employees for the upcoming fiscal year, with exceptions for employees with full-time salaries of $50,000 or less and faculty receiving promotion or tenure. This enables us to preserve the maximum number of jobs college-wide. Although it's disappointing not to be able to recognize faculty and staff contributions to Thayer School, the decision to hold salaries constant enables us to remain in a financially stable position, to support our students, and put together the best possible educational programs."

What kind of budget reductions is Thayer making this year?

"Because we're less dependent on endowment than others, we're in a relatively fortunate position right now. Our research funding is, in fact, up and enrollments are strong. On balance, the cuts we have to make at Thayer are not as severe as cuts at other institutions.

"Specifically, we're not going forward with plans to add staff in a few areas. These are important positions but we're postponing them for now, and will make decisions a year or two down the road as the economy recovers. We're reducing expenses in such areas as travel, particularly in development and for alumni events. We're planning to rely more on web-based interaction with our external community. We're also looking at our publications and deciding what might be better accomplished electronically. These are just a few examples, but it's that kind of discretionary expenditure we're reducing.

"One other small piece of good news is that the price of fuel-oil has declined significantly relative to what we were budgeting nine months ago, helping us to reduce expenses, and that benefits this year's budget directly."