Below are my notes on Morty’s speech at the Boston Alumni Meeting on Tuesday night. Key points: WNY is dead. Financial crisis is not that bad. Need-blind admissions for internationals is safe (I think).


This is my honest recollection. But I could be wrong! I tapped a few key phrases on my Blackberry but did not take proper notes. The “quotes” are paraphrases at best. If you heard it differently, make a note in the comments. If you really care about these topics, contact someone in the Administration for confirmation.

1) Williams in New York is done. “Not going to do this [WNY] anymore” and “Already moved on this.” I was shocked at how clearly this was stated by Morty, especially after skimming this Record coverage.

In two consecutive votes held during last Wednesday’s faculty meeting, the faculty first voted to continue Williams in New York (WNY), and then opted to form a committee to re-imagine the Program.

The first vote, in which faculty decided whether or not to continue WNY, saw 63 percent vote in the affirmative. The results of this vote necessitated a second vote to decide on three potential courses the Program’s continuation would take. Option “a” would have continued WNY in its current form; option “b” would have expanded the Program to address concerns raised by the WNY Review Committee; and option “c” called for a committee to review and overhaul the Program, which could entail its suspension at the end of the 2009-10 academic year. Option “c” received 71 of the 102 votes cast, while “a” received five ballots and “b” received 26, according to Bill Wagner, dean of the Faculty.

Wagner will work with the Steering Committee and Monique Deveaux, chair of the Committee on Education Policy (CEP) and professor of political science, to select members for the new committee. Wagner hopes to have the committee formed by the end of the semester.

I had thought that this meant (because I only skimmed the article) that WNY, while perhaps significantly changed, would continue in more-or-less a similar fashion. A bunch of students would live at the Williams Club, take some classes, do some internships and so on. But Morty made it fairly obvious that the College could not afford it. He even mentioned a specific dollar savings ($800,000?) from the change. Morty still had nice things to say about WNY, reminisced about its history, especially its start at the beginning of his presidency. Yet, there was no fig-leaf here, no discussion of the committee that was set to begin work on the Program. It seemed clear to me that “review and overhaul” means “gut.” In retrospect, the Record article makes that fairly clear.

Both President Schapiro and Wagner pointed to Williams in Africa (WiA), which makes use of local institutions to keep operating costs low, as a potential model for the new WNY program. “The committee working on the Williams in Africa program has come up with a version that I think gets high marks in terms of academic rigor, experiential learning and cost,” Schapiro said. “I bet our new committee will do the same for the Williams in New York program.”

There may still be Williams students studying in NYC next year, just as there are Williams students in London and Bucharest, but Bob Jackall’s baby is dead. Reading back over our thousands of words on WNY, it now seems fairly obvious that Morty was never a fan, that one purpose of the Waters Committee was to kill the program, that the Committee was a poor assassin and that the financial crisis made axing WNY easy.

2) Morty discussed the College’s financial situation extensively. Overall, I walked out of the meeting only half as worried about the College’s finances as I was at the start, either because things are not so bad or because Morty is so soothing. He mentioned that the “avail rate” was 4.1%, I think for the fiscal year which ended on June 30, 2008. Recall our efforts (special thanks to HWC) to decode the College’s financial statements. Given this clue, my guess would be that the dollar amount was $74 million, which is 4.1% of $1.8 billion. You can calculate this number from the financial statements by adding “Investment income” and “Realized gains utilized.”

But this is still a deeply unsatisfying presentation (assuming that I have the details correct) because it does not take account of Williams $260 million in debt. And Morty made exactly this point (as he has done in the past). He used the example of someone with a $500,000 house and a $300,000 mortgage. That person is stupid if he says, “Hey! I have a $500,000 house!” He doesn’t. You can’t ignore the debt. He is really only worth $200,000.

But the exact same applies to Williams. It is highly misleading to describe Williams as having an avail rate of 4.1% if that rate is calculated using the value of entire endowment in the denominator. You need to use net financial wealth — more or less endowment minus debt. Read Gordon Winston (pdf) if you want the details. Spending 4.1% out of our net wealth ($1.8 billion – $260 million = $1.54 billion) would be $64 million. Is that a number that can be magically derived from the financial statements somehow?

Then again, I now see that I am being sloppy. You are supposed to use the endowment as of June 30 at the start of the fiscal year (that would have been the $1.9 billion as of June 30, 2007) to determine the avail rate for the coming year. But 4.1% of $1.9 billion is $78 million, another number that does not jump out of the financial statements.

Help wanted! My best guess: We know the 4.1% number. We know that the College’s debt as of June 30, 2007 was $267,108,317. We know that the value of the endowment on that date was $1,892,054,673. Ignoring other aspects of the College’s financial wealth (account receivables, payables, et cetera), this puts the net financial wealth at $1,624,946,356.

We hope that Morty would calculate the avail rate properly, so 4.1% of $1,624,946,356 is $66,622,800. The number that is closest to this with the most plausible description in the income statement is “Realized gains utilized” at $65.1 million. Is 66.6 then same as 65.1? No. But that is the best that I can do.

Throughout this coverage, I have tried to avoid tiny chicken, falling sky arguments. If the College really only spent $66 million out of the endowment in 2007 for operating expenses, then we are in decent shape. The great thing about capital expenditures is that you can stop making them for a decade and still be OK.

Anyway, back to Morty. In relation to the overall financial crunch, “Most scenarios we can imagine we are pretty much OK.” He discussed all the planning and budgeting that the College was doing, thanked Provost Bill Lenhart (who was there) for all his hard work, mentioned that he had been meeting all day with some Trustees (shout out to Greg Avis ’80, chair of the executive committee of the board of trustees) to go over these issues. He talked about three different cases for the endowment: down 20%, 30% and 40% and then, potentially, flat for several years.

With 20% (the current planning), things are OK. They have already made a lot of the necessary cuts (in the current fiscal year) for that scenario. He threw out some specific number and mentioned that the College would be spending less money in 2009-2010 then it is this year. In other words, these are not just cuts in growth, but real cuts. (Not sure I got all the details.)

With 30%, things are much harder. 40% is too scary to contemplate. More on this framing some other day.

3) Morty discussed some specific spending items. He mentioned that the College, while still committed to sustainability was no longer going to spend the $2 million per year that was originally planned. Recent cuts to this were $700,000. (Recall that I advocated a decrease in goo-goo green spending. Shout out to our Hopkins Hall readers for following EphBlog’s lead.) Morty (and Greg Avis) both spoke passionately about Williams’s core commitments: need-blind financial aid and current employees. There would be no cuts in aid nor any lay-offs.

Not discussed was Morty’s previous musings about ending need-blind aid for internationals. While neither he nor Avis discussed this distinction explicitly, the only reasonable conclusion from listening to their discussion was that need-blind for everyone was sacrosanct. If they are still actively considering treating international students differently, they were misleading the audience. Since ensuring equal treatment for international students is a core value (for me), this is good news.

4) Josh Ain ’03 asked a question about anchor housing, in the context of Morty’s mention that the new system had not lived up to his hopes. Longtime readers will recall that Josh was fighting the good fight against CUL on this 8 years ago. Morty’s reply was consistent with what we already know.

First, he complained about the “balkanized” housing that he found at Williams when he arrived. He hated that. Williams was “never going back” to that world. He felt that the College had a responsibility to “mix” students, both in classes and outside of them. He only talked in terms of race, no mention of all the hockey and lacrosse players living together in Tyler. As long as Morty is president of Williams, he will never allow meaningful self-segregation by race.

Second, Morty was open to improvements in the Neighborhood System. He admitted that things had not gone as well as he had hoped. He still thought that CUL (crediting Professors Will Dudley ’89 and Charles Dew ’58) had done a good job. He thought it was a hard problem. He was open to suggestions.

Third, Morty continued to be a big fan of having all the freshmen in the Quad and Mission.

Again, we already knew all these things. Fortunately, my Vision for Williams Housing is consistent with Morty’s requirements. Anchors Away!

4) Someone asked about the need for increased financial aid to current students. Morty said that the College had budgeted for this, setting aside a million dollars for increases in aid, telling students/families that Williams was ready to re-estimate need. But, it turned out that only 12 students needed more aid and the total amount was small.

Morty explained that, in retrospect, this was not surprising. Divide the Williams population into two halves: those on financial aid and those not. The later group is, overwhelmingly, so rich, both in terms of current income and total assets that little increased aid is likely to be necessary. If your wealth has dropped from $2 million to $1 million because of the crisis, that is tough for you but you are still paying full tuition at Williams. Financial aid students, on the other hand, are already receiving very generous packages, averaging over $30,000. If you are already paying so little, then even a dramatic change in your circumstances want cost the College much extra money.

In summary, Morty was his usual funny, charming and honest self. Alas, it was a tough room because there was not seating. If you are going to host Morty (or any speaker from Williams), you really need to find a place where everyone can sit down. More later.

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