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The Williams Campaign – Basic Questions about Finances

In the course of the tribute to President Schapiro that the College released today, penned by Trustee (and Presidential Search Committee Head) Greg Avis ’80, Avis noted that “The Williams Campaign surpassed its $400 million goal last year and in its final weeks is approaching $500 million.”

Until the recent financial crisis, I was not following the College’s finances closely. I would appreciate it if someone would answer a few questions to help me get a stronger foundation.

1) I believe that, while the College is on a fiscal year that ends in June, its fundraising campaigns are structured as being on a  calendar year. Does the quote from Avis mean that the College has raised nearly $500 million this calendar year (the reference to “last year” has me confused)? Is that all of its fundraising for calendar year 2008, or is it for a separate capital campaign to fund construction and perhaps other special programs (such as the earlier campaign to increase the endowment to fund the expansion of the faculty and thus enable the addition of more tutorials)? If it isn’t all of the fundraising, does anyone have any idea of how much else there might be and what it might be for?

2) (This is sickening.) Is it reasonable to assume that a third or more of the $500 million (and any other money raised this calendar year) has vanished into the black hole that has devoured a third or more of the endowment? Is it reasonable to assume that a good chunk of any year-end gifts might go the same way? 

3) The quote from Avis is quite upbeat, but does anyone know how the recent financial downturn has affected the fundraising stream at Williams? Except for my local food bank and food kitchen, every non-profit I know of is reporting that its fundraising intake is down dramatically for the whole calendar year and has slowed to a trickle in recent months.

4) How much money still needs to be raised for the construction projects (principally, the demolition of the Stetson additions, the construction of the new Sawyer, and the demolition of the old Sawyer)? Is this likely to be funded in a different way than the construction of the ’62 Center and Paresky (which involved issuing a considerable amount of debt)?

5) What do you think will happen when it comes time to set tuition for 2009-2010?

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#1 Comment By frank uible On December 16, 2008 @ 11:17 am

The Williams Campaign is a 5 year one (2004-2008), the aggregate goal of which was $400 million. The count which I last saw a week or two ago put then total gifts at about $487 million.

#2 Comment By hwc On December 16, 2008 @ 11:42 am

And during the five year period, all giving (inc. the usual alumni and parents fund giving) is counted in the campaign total. It’s basically like a “red tag sale” at the Toyota dealer that colleges run for five years every five years to light a fire under giving and especially to shake the tree for some major gifts.

As soon as this campaign ends, they’ll start naming the planning committees to “explore the vision of education at Williams” in preparation for the next campaign in five years.

#3 Comment By Diana On December 16, 2008 @ 11:55 am

The alumni office fundraising year is usually from July 1 – June 30.

#4 Comment By Larry George On December 16, 2008 @ 12:01 pm

# 3 Then why does Avis talk about the campaign that is about to end? I know they actually keep the books on a fiscal, rather than a calendar, year, but is this “Campaign” ending on 12/31/08 or 6/30/09?

#5 Comment By frank uible On December 16, 2008 @ 12:09 pm

All the pronouncements which I have seen or heard have indicated 12/31.

#6 Comment By hwc On December 16, 2008 @ 12:21 pm

2) (This is sickening.) Is it reasonable to assume that a third or more of the $500 million (and any other money raised this calendar year) has vanished into the black hole that has devoured a third or more of the endowment?

Maybe only 30%, but…yes…gone. If you think it’s sickening, imagine if you were a college president having to do a song and dance at hundreds of alumni cocktail parties to raise that money!

4) How much money still needs to be raised for the construction projects (principally, the demolition of the Stetson additions, the construction of the new Sawyer, and the demolition of the old Sawyer)? Is this likely to be funded in a different way than the construction of the ‘62 Center and Paresky (which involved issuing a considerable amount of debt)?

I’m not sure about library fundraising and I’m not sure there is sufficient avaialable detail to know. We can’t even figure out what the annual endowment spending has been!

The problem with paying cash money for things like libraries is that all the campaign “gifts” don’t turn into cash immediately. Especially the larger gifts are often pledges involving estate planning and/or payable over a period of time. I think, as of today, you can pretty much forget the library project until the markets have clearly stabilized and begun a signficant recovery. We haven’t even gotten to the stage when colleges admit the necessity of faculty pay cuts.

Stage 1 Timeframe: Easy immediate cuts being announced now.

Stage 2 Timeframe: Meat and bone start being cut with the announcement of the 2009 fiscal year budgets over the next few months.

Stage 3 Timeframe: Massive cuts being planned on a contingency basis and announced next fall if endowments are still down 30% or more.

#7 Comment By JeffZ On December 16, 2008 @ 12:49 pm

Campaigns do not run every five years. The previous campaign ended in 1993, so it was over ten years before this one began.

#8 Comment By lgeorge On December 16, 2008 @ 1:23 pm

Thoughts about tuition?

#9 Comment By hwc On December 16, 2008 @ 1:53 pm

Low-end colleges have been announcing tuition freezes for next year.

I haven’t seen any high-end luxury schools announce tuitions yet. There’s been some rumbling about higher than normal increases in order to generate some additional revenue from full pay customers. Doesn’t really matter, because they’ll discount as much as necessary to fill the seats on plane.

#10 Comment By lgeorge On December 16, 2008 @ 2:04 pm

“Doesn’t really matter, because they’ll discount as much as necessary to fill the seats on plane.”
It will matter considerably to the parents who have to pay it.

#11 Comment By JG On December 16, 2008 @ 2:13 pm

The Alumni Fund is July 1 – June 30th (here is the 2007-08 report noting the June 30th end date). The big capital campaigns can run on any kind of different schedule b/c they are a special thing. It is a made up set of dates that can either correspond to some special time they wanted to announce it or end it or whatever. The “start” date is also usually manipulated somewhat based on when they secured the first 25% (or more) of the total…rule of thumb is to have your lead gifts pledged before any public announcement will ever be made.

My reading of the above quote is that he is talking about the Campaigns for Williams and not the regular Alumni Fund or Parents’ Fund giving.

#12 Comment By lgeorge On December 16, 2008 @ 2:20 pm

JG – Thank you. That is helpful. It is good to see you here. I miss you.

My Christmas wish for Williams: that someone would give a big “lead” gift to put things on a better footing (and my Christmas wish for all of us is that the markets would stabilize and the economy start healing). But…

#13 Comment By sophmom On December 16, 2008 @ 2:39 pm

Hi JG! :-)

LG: Re#10:

No kidding.

Please tell me that the tuition will remain the same for those of us already on board the Good Ship LolliWilliams, otherwise I fear Candy Land may become an even more mythical destination.

#14 Comment By Dad13 On December 16, 2008 @ 3:23 pm

As the parent of a someone admitted yesterday, I hope that tuition increases will likewise be modest for newcomers

#15 Comment By lgeorge On December 16, 2008 @ 3:53 pm

Welcome to Williams, Dad13 and congratulations to your daughter or son. This must be a very happy day in your household.

I remember well my own thrill when my acceptance came.

Did the email say how many, or what percentage, of the Class of 2013 was admitted Early Decision? It may well not have — the final figure may not be known as they may still be working with some students who were recruited through Questbridge — but I was just curious. The Record (weekly student newspaper) or a College press release will give the full data in January or early February.

Did you get to see the email? What was it like? This is the first year that Williams has given students (other than international applicants, who have had the option for several years) the option of being notified by email as well as by regular mail. It would be fun if you or your new Eph could redact the identifying information and post a copy.

Anyway, welcome to Williams. Please let us know if we can be of assistance. You can post questions through the “Speak Up” link in the upper left corner (someone is more likely to see them there, as Soph Mom, the parent of a current student, monitors that cache).

#16 Comment By Ronit On December 16, 2008 @ 4:11 pm

Yale University estimates that its endowment has fallen 25% since June 30. – WSJ Breaking (no link)

#17 Comment By lgeorge On December 16, 2008 @ 4:12 pm

I’m hoping that a “soak the rich” approach won’t apply to setting tuition. It would be short-sighted. As far as I can tell (remember, for example the generous baseball parents who helped fund the spring training trip for everyone and went out of their way to find out whether more was needed for students who couldn’t pay, and the generous soccer parents who footed the NCAA-mandated admissions fee for Williams students at the sectional semifinal and final), parents have been generous whenever they saw the need as well as through the Parents Fund. At some point, no matter that they may be in the 90th+ percentile, those who have lost a lot or are threatened with job loss will stop being generous or will decide that a Williams education is a luxury they are no longer willing to buy.

#18 Comment By lgeorge On December 16, 2008 @ 4:18 pm

Re # 16 – And the return was almost flat for the fiscal year ending June 30th, wasn’t it, or was it lower than the usual but still a respectable 4% or so? The 25% drop is quite a change from the remarkable run-ups Yale had had, but they are down a little less than I had expected. Yale’s “fall” must ironically be something of a comfort to other endowment managers.

#19 Comment By Dad13 On December 16, 2008 @ 4:21 pm

The acceptance letter indicated the College had received 616 Early Decision applications, but did not mention the number of persons accepted from that group. It was a very happy day for all.

#20 Comment By hwc On December 16, 2008 @ 4:33 pm

I’m hoping that a “soak the rich” approach won’t apply to setting tuition.

Where have you been? Colleges have been moving decisively towards a “soak the rich” progressive pricing structure offset by financial aid discounts for the middle class for years now.

When my daughter started college five years ago, full-pop at Williams was $38,100. Williams is $47,530 this year. That’s a 25% increase over five years. All the luxury colleges follow the same pricing model. Some of them are quite explicit about the intentionally progressive nature of the pricing. Remember, significant numbers of families qualify for “need-based” discounts with family incomes above $190,000 a year.

#21 Comment By lgeorge On December 16, 2008 @ 4:41 pm

For the Class of 2011, 216 (revised number) were accepted from 531 applicants; for 2012, 238 were accepted from 600 applicants.

So the number of Early Decision applicants rose again this year.

In December of both 2006 and 2007, the target first-year class size was about 538. It could be slightly higher this year as there has been some talk of slightly expanding this incoming class and maybe admitting a few more transfers than usual (because of the global financial situation).

Anyway, enjoy the fruits of a lot of hard work, and a holiday season without more applications to be completed.

#22 Comment By Parent ’12 On December 16, 2008 @ 4:50 pm

@16, here’s the link:
http://online.wsj.com/article/SB122946236417011651.html

I wonder if Yale will re-think expanding. In the spring Levin announced 2 additional residential colleges. Plus, they’ve been strengthening science departments.

#23 Comment By sophmom On December 16, 2008 @ 4:59 pm

Dad 13:

Welcome, and congratulations! I remember well, when my son received his ED packet. It certainly made for a more enjoyable holiday at our house.

I look forward to your participation in the EB conversation. I know how much it helped me familiarize myself with Williams and my son’s new life. So, if you have any questions, feel free to ask, either here or on “Speak Up!”, our new EB bulletin board.

#24 Comment By Parent ’12 On December 16, 2008 @ 5:05 pm

Dad 13, I second LGeorge & SophMom- Welcome & congratulations.

I’ve learned a lot about Williams. I probably know more about Williams history than my son because of EB.

#25 Comment By Dad13 On December 16, 2008 @ 5:08 pm

As you might expect, I spent a fair amount of time going through the archives on admissions topics.

#26 Comment By rory On December 16, 2008 @ 5:08 pm

bienvenidos!

however, dad13, a warning: this is not a representative sample of williams alumni…and it certainly isn’t a representative sample of williams’ current atmosphere. so take everything–good and bad (especially the bad)–with a HUGE grain of salt. unless you see sophmom, hwc, david, myself, and ronit agree (can replace me or ronit with JeffZ), it’s likely biased one way or another!

#27 Comment By Parent ’12 On December 16, 2008 @ 5:14 pm

I’m relatively new, but I don’t recall any time when that group in #26 agreed unless it was the humor in one of Dick Swart’s illustrations.

#28 Comment By sophmom On December 16, 2008 @ 5:22 pm

Clarification re # 26:

I have only disagreed with a couple of people in that group, and only when they were wrong.
;-)

#29 Comment By lgeorge On December 16, 2008 @ 5:25 pm

“That’s a 25% increase over five years. All the luxury colleges follow the same pricing model.”

I am well aware of this. It is why I said what I said.

A “progressive” pricing structure seems to work in times of perceived rising prosperity. I don’t think it will work nearly as well in times of perceived greatly diminished prosperity. A family may well have over $190,00 of income, but that income probably means something very different to them in a time of perceived financial stability or well being than it does when the job or jobs that generate that income are threatened and/or the family has lost a third or more of its net wealth.

I have seen suggestions that this is the time to further disproportionately ramp up the full ticket price. I think that is shortsighted. At some point, the children of many of the potential full pay families won’t come or they will leave or, if they stay, they will give much less to Williams because they feel beleaguered or like chumps. In addition, I don’t like the sort of economic class warfare the further disproportionate ramping up approach suggests. I would prefer that Williams would approach this as “We are all in this together, so how do we all work together to meet the challenges and solve the problems we face,” rather than “How can we figure out how to make some people pay for everyone.” (It is as offensive to me to treat full pay students who are already enrolled as, essentially, sitting ducks as it would be to me if the financial aid pool were seen as an easy source of funds to cover operating shortfalls.) It is, after all, an institution of higher education, and we should be smarter (and I hope more moral) than having cuts fall in a grossly disproportionate way on any one group of students/families would suggest.

When I was at Williams, many financial aid students voluntarily conceived of having a commitment to give back for their education and I have watched them do so, many, many times over (with their deriving great pleasure from being able to do so), over the years — that suggests a very different attitude towards things than lightly looking to “soak the rich” does.

And, yes, there are serious shortfalls and, yes, the community does need to address them — in a complicated approach incorporating thousands of concerted measures.

#30 Comment By lgeorge On December 16, 2008 @ 5:35 pm

Re ## 26, 27 — #26 is entirely correct. #27 may not be true — they may agree about most of the things they don’t fight over, but who knows (and I don’t want to provoke anyone’s need to argue)?

But, please, don’t take us as representative of either alumni, parents, hangers on, or the current atmosphere on campus. When you actually have opportunities to chat face to face with students, alumni, parents, faculty and other staff members, and assorted hangers on, you will be totally charmed.

#31 Comment By JeffZ On December 16, 2008 @ 5:47 pm

Are you saying WE aren’t charming, Larry G? I will, however, echo Rory’s caveat, as well as everyone’s congratulations and welcome.

#32 Comment By lgeorge On December 16, 2008 @ 5:50 pm

“Are you saying WE aren’t charming, Larry G?”
Not always — and I’m as guilty as anyone.

#33 Comment By lgeorge On December 16, 2008 @ 5:57 pm

By the way, Sam Jackson of Yale kindly answered one of my questions on another thread. Yale’s return (after developing a widely emulated approach that earned it jaw-popping returns) was a — respectable, under the circumstances — 4.5% in its fiscal year that ended on 6/30/08. Everyone is, of course, still curious as to whether the Yale approach will continue to outperform others in, and shield Yale from the consequences of, the downturn.

#34 Comment By lgeorge On December 16, 2008 @ 5:58 pm

Re # 31 – lol. I should have said that you are always quite charming, Jeff. I’d even give you a St. Nick’s Certificate of Good Behavior.

#35 Comment By nuts On December 17, 2008 @ 1:20 am

Joe Scarborough pokes fun at Mika, Erin and Williams College at 1:23.
http://www.youtube.com/watch?v=PVnWQW-qi_Q

#36 Comment By JeffZ On December 18, 2008 @ 11:08 am