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A million dollars a year in textbooks

Just received this request for a donation to Williams:

Dear Diana,

Did you know that Williams provides a book grant to cover all required texts and course materials for students receiving financial aid?

Prior to 2010, financial aid students would queue up before dawn with the hopes of borrowing textbooks from the 1914 Library. For decades, the 1914 provided financial aid students access to textbooks without having to purchase them outright. […] All of that changed in the spring of 2010: no more standing in line, no more choosing courses or majors based on the availability of textbooks. Since 2010, the Alumni Fund has made it possible for the college to help purchase approximately $7.5 million in textbooks for financial aid students. […]

Perhaps you’d like your Alumni Fund gift to buy the books for students taking “MATH 150: Multivariable Calculus” this semester. (You can read more about the course here.)

Thank you so much for all you do for Williams!

Lisa Russell-Mina ‘79
Co-Chair, Alumni Fund


  • It’s 2018, and 50% of Williams students (so, about 1000 per year) receive financial aid. By my calculations, that means Williams is spending about $1000 per student per year on textbooks. Wow! That seems like a lot.
  • I appreciate their suggestion to check out Math 150, since I was the one teaching it three semesters ago. In fact, I wrote my own materials and printed them out for the students for free. I wish more people would do the same.
  • Knowing that my hundred dollars might go towards half of a $200 textbook actually makes me less likely to send a hundred dollars to Williams. Financial aid, wholeheartedly yes! Textbooks, hard no.

Some problems I wrote about Mount Greylock, the Mountain Day T-shirt, Cricket Creek farm, and the Williams Outing Club are below the break. The whole textbook is here.

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Garfield House is gone.

Our friends over at ‘Eph Construction Boom’ are reporting the Garfield has been torn down. Will check it out tomorrow and throw up some after pics of the debris…



Here comes the taxman! (Williamstown loses)

The Senate has passed a federal tax increase on private universities and colleges such as Williams.

I have always argued that local governance should get more revenue from Williams either through a PILOT and/or a tax on real estate holdings. Dormitories and common eating/ food sales spaces compete with the local economy (rentals and restaurants). They should be subject to local property taxation.

Williams and Williamstown are inseparable, and as such, Williams relies heavily on things such as local schools, waste management, police, and fire. Williams relies on the adaptability of the local planning board to make space for growth, and the relative lopsidedness of zoning permits. Who can build and where is a college function in the cultural district.

As we like to say, “Rock, paper, college.” Not that there is anything wrong with that!

That said, the federal taxation of a place like Williams when compared to the benefit of federal tax reform on the townie (working class) populations in a place like Williamstown is inequitable. When one compares the relative economic cost (the opportunity cost) of what this federal income tax will take from Williams/ Williamstown when compared to the local benefit with regards to the local burden on working people- this is a bad deal for Williamstown Townies! Local real estate taxation has skyrocketed in the last eight years. This is not going to help Williamstown’s affordability crisis…

Looks like we are in this one together.


WBUR on Williams V

Fred Thys ’80 reports for WBUR about the cost of Williams College. Fred is a knowledgeable and sympathetic alum but this story painted an incomplete picture. Perhaps later stories will flesh out the scene? In the meantime, let’s spend 10 (!) days dissecting this article! Today is Day 5.

At Williams, salary is only two-thirds of the compensation. There are health insurance and child care, and all Williams employees with children in college are entitled to $24,000 a year toward each child’s education.

First, this strikes me as somewhat confused. Total compensation is a technical tax term. Health care benefits are included. But is child care? Free coffee in the faculty lounge? I don’t think so. Corrections welcome. (Joe Thorndike ’88, please help!)

Second, a cynic will often times think of the faculty/staff of Williams as a parasite, feeding off the College, sucking as much blood from the host as possible. Recall our discussions about trimming costs 6 years ago:

I have already highlighted two faculty boondoggles (the Sabbatical Grant Program and the Professional Development Fund) that should be ended, but I don’t get the sense that there are big dollar savings here.

I think that the College provides substantial subsidies to faculty housing. I have no idea what the magnitude of these benefits are, but there is no reason for the College to be in the housing business for faculty/staff, any more than for it to grow apples or design clothing. Yet, by being in the housing business, the College can transfer some/lots of resources to the faculty.

The same applies to the Children’s Center. Why should the College be in the business of supplying day care? Why not also start an apple orchard? After all, it would make excellent faculty more likely to come to Williams if they knew that they could get great apples at below-market rates.

Rule #1 about successful non-profits is that the insiders think that they do a great job and should be rewarded more generously. But it can be tough just to raise salaries since it is so easy to compare salaries against outside benchmarks. So, to avoid scrutiny, insiders sometimes steer resources toward themselves and their friends via non-salary mechanisms.

Want to really piss off the faculty? Cut (or, at least, trim) the tuition benefit for employee children. Normal professionals (like you and I, dear reader) save their own money over time to send their children to college. Not Williams faculty! Williams will pay half the cost of tuition for a faculty child to attend anywhere.

[Slightly edited.]

And the above only scratches the surface of the various faculty boondoggles that are not counted in total compensation. My favorites were the extra money that faculty received (and still receive?) for creating tutorials. We needed (still need?) to pay them faculty extra to do their jobs!

Third, the point here is not that Williams faculty and staff aren’t, as a group, wonderful. They are! The point is that WBUR should try to provide better context in a discussion of costs at Williams. The College spends much more money on faculty and staff than 90% of its peers, not because it has to, but because Williams is absurdly wealthy and because faculty/staff run the institution.

If the College announced, tomorrow, that it was cutting out the tuition benefit (either for all employees or just for new employees), there would be essentially zero effect on our ability to recruit and retain great faculty/staff. The fact that the College won’t do so — won’t even discuss doing so! — is an indication that Falk has little interest in controlling costs. WBUR should explain this reality to its listeners.


WBUR on Williams IV

Fred Thys ’80 reports for WBUR about the cost of Williams College. Fred is a knowledgeable and sympathetic alum but this story painted an incomplete picture. Perhaps later stories will flesh out the scene? In the meantime, let’s spend 10 (!) days dissecting this article! Today is Day 4.

Two years ago, the average salary for a full professor at Williams was $137,000 a year, which puts it among the best-paying 3 percent of all colleges. And it’s a 47 percent increase over 12 years.

This is highly misleading because salary is not the same thing as total compensation. If I pay you a $90,000 salary and provide $90,000 in retirement benefits (401k, et cetera) then you, correctly, figure that this job is much better paid than one with a $100,000 salary and no other benefits. Here (pdf) is the latest compensation data for Williams.

Full professors at Williams earn an average total compensation of $183,800.

It is hard to have an honest discussion about the costs of running Williams if WBUR won’t even report accurate compensation numbers.

Kudos, however, to Thys for noting how incredibly well-paid Williams professors are in comparison with their peer group. Williams spends lavishly, so much so that, were every Williams professor to retire tomorrow, we could restaff the College almost instantly with a faculty that was every bit as good as the one we have now.

Of course, the fact that the College has such a strong bargaining position does not mean that it should abuse our current, much beloved, faculty. And tenure makes abuse hard. But we need to understand the actual supply/demand realities of the academic job market in order to fairly evaluate the costs of running Williams.


WBUR on Williams III

Fred Thys ’80 reports for WBUR about the cost of Williams College. Fred is a knowledgeable and sympathetic alum but this story painted an incomplete picture. Perhaps later stories will flesh out the scene? In the meantime, let’s spend 10 (!) days dissecting this article! Today is Day 3.

Falk says the faculty is like a string quartet.

“And asking them to do it faster or asking them do it to three times as many students at a time are things we can ask them to do, but they will directly degrade the quality of what we want to deliver,” he said. “And so the entire framework of productivity when it is applied to higher education is one that has to be thought of very carefully and can’t be thought of in the same way that we apply the notion of productivity to the manufacturing sector.”

First, this is worse than wrong. It is Orwellian. It is precisely Falk’s predecessors who have created a Williams in which professors teach “three times as many students at a time” as they used to.

The math is unavoidable. Williams has about 2,000 students taking 4 classes a semester. That is 8,000 student/class combinations that will happen, regardless of how many faculty members we have and how many classes they each teach. Currently (ignoring the complexities of leave patterns and visitors) we have 250 professors each teaching two classes. Split up those 8,000 student/class combinations, we have about 16 students per class. So far, so good!

Now imagine a world with those same 250 professors each teaching 4 classes. In that world, the average Williams class is 8 students, small enough for every class to be a tutorial. If Williams went to a 4-4 requirement, professors would be teaching only 50% “as many students at a time” as they do today.

Recall the slogan from 9 years ago: No More Lectures!

First, lectures are inefficient for students. Anything that a professor says in a lecture, as opposed to a discussion, could just as easily be typed beforehand and read by students at their own convenience. Reading is much quicker than listening and, more importantly, allows different students to focus on the parts that they don’t understand and to skim the parts that they do.

Administrators sometimes believe that large classes save money (one professor teaches 100 students!) but the savings come in the form of less learning per student.

Second, the arguments in favor of lectures in economics at Williams are identical to the arguments for lectures at Harvard. According to Schapiro (and many Williams faculty members), there is a minimal amount of knowledge that a student must have in order to be able to even discuss a topic like microeconomics. That may be true, but it is no less true for the poetry of Emily Dickinson or the philosophy of David Hume. At Harvard, they are at least consistent on this topic, lecturing to students on microeconomics and poetry and philosophy. If you believe that students, having done the assigned reading, learn best by discussing poetry and philosophy on the first day of class, then why wouldn’t the same be true of economics and chemistry?

Third, the smaller the class, the more learning occurs. Consider Diana Davis’s ’07 description of her high school experience:

“I went to a high school where every single class — English, biology, history, math, economics, Greek — was a discussion class with 13 students or fewer. I have not taken a single class at Williams where I have learned as much, learned as deeply, or remembered as much a year later as I did in my classes in high school.”

Now, most of us did not have the good fortune of going to a high school like Diana’s. Yet no one makes the opposite claim; no one argues that students learn more in lecture than they do in discussion.

Fourth, there would be no better way for Williams to demonstrate to potential applicants that it is a different place, with different values, than by drawing a line at 15 students or so per class. If Williams had no lectures, then there would be less doubt about its educational superiority. The tutorial program already provides Williams with a leadership position in undergraduate education. Abolishing lectures would do even more.

Fifth, claims about the excessive expense involved in having small sections are overblown. A professor currently responsible for the education of 45 students in ECON 110 should organize the class in whatever way is best for her students, not most convenient for her. Better to have three sections of 15 students each, than one large lecture. This will take up more of the professor’s time, but, since so much of the work — planning the class, creating the exams, grading the papers — is a fixed cost (regardless of the number of class meetings), the marginal cost to the professor of having three sections instead of one is small. The very best professors, like Eiko Maruko Siniawer ’97 in history, already split up their large classes. Everyone else should do the same.

Second, to be fair to Falk, the target of his criticism are those who praise the possibilities of MOOCs: massive open online courses. We all agree that a Williams tutorial — in physics or English or statistics — is better than any MOOC. But Thuys does his listeners no favors when he allows Falk to frame the debate as Williams-verus-MOOC when the relevant debate, at least in the context of elite US institutions, is Williams-with-4-4-teaching-loads versus Williams-with-2-2-teaching-loads. That is debate that we ought to be having.

(Of course, the populist cut-all-costs position would argue for a 125 person faculty teaching 4-4: same (?) quality as today but much less expensive. I disagree with this view, as does every Eph I know, so no need to bother with it here.)


WBUR on Williams II

Fred Thys ’80 reports for WBUR about the cost of Williams College. Fred is a knowledgeable and sympathetic alum but this story painted an incomplete picture. Perhaps later stories will flesh out the scene? In the meantime, let’s spend 10 (!) days dissecting this article! Today is Day 2.

In the 1960s, economists William Baumol and William Bowen pointed out that it takes the same number of musicians to play a string quartet today as it did in Beethoven’s day. So the productivity has not increased in 200 years. That explains why the cost of going to a live classical musical performance has gone up more than the cost of a drinking glass. You can manufacture the drinking glass more productively now than you could 200 years ago.

To appreciate labor costs, Falk compares the faculty to another group of highly trained workers: a string quartet. He says you could make it more productive by removing one of the instruments.

“I mean, after all, there are two violins, and really, do you need two violins?” Falk asked. “Couldn’t you play it with one violin? You could reduce the cost by 25 percent.”

What utter bollocks! Why won’t Thys challenge Falk, and every other College president who trots out this gibberish?

First, the College has spent the last 50 years reducing the amount of violin playing time that it requires of its faculty. Fifty years ago, the College required faculty to teach “4-4” — meaning four classes each semester. This was the amount of violin playing required. Since then, the ratchet has gone in only one direction: downward. From 4-4 to 4-3 to 3-3 to 3-2. The last step occurred 15 years ago when President Morty Schapiro reduced the teaching load from 3-2 to 2-2. (I am ignoring Winter Study.) (Here is an overview about similar changes at the University of Vermont. Any pointers to relevant history at Williams?)

Now, Falk might argue that the change from 4-4 to 2-2 was a good thing, that it freed up Williams professors to spend more time on their oh-so-important research. Or he might argue that the competitive market for professors made the change necessary, lest every Williams professor move to Princeton. Or he might claim that the quality of teaching has increased since professors now have more time to devote per class.

But, you can’t use the string quartet analogy to justify ever increasing costs if you are, simultaneously, cutting by 50% the amount of time you require your violinists to play.

Moreover, there is little if any evidence in favor of the other possible arguments.

Second, Falk ignores (or is unaware of?) the argument made by informed critics. We don’t think that Falk should fire half his violinists. By all means, keep the academic faculty headcount at 250. Instead, we think that Williams ought to move from 2-2 back to 4-4, or at least to 3-3. But that is a rant for tomorrow.

Third, Falk ignores, and Thys lets him get away with ignoring, the dramatic decreasing in courses taught because of the ever-increasing administrative bloat of Williams. Consider just the office of the Dean of the Faculty. Fifty years ago, Williams did not even have a Dean of the Faculty. The office now includes three Ph.D.’s (Buell, Park, Gerry), excellent teachers all, none of whom are teaching a single (?) Williams student this academic year. (Yes, I am simplifying things here since Gerry is not, in truth, a member of the faculty, but the point about moving resources from teaching to administration is the same.)

Falk should not use the string quartet analogy if he is not actually going to have his well-paid violinists actually, you know, play their instruments


WBUR on Williams I

Fred Thys ’80 reports for WBUR on the cost of Williams College. Fred is a knowledgeable and sympathetic alum but this story painted an incomplete picture. Perhaps later stories will flesh out the scene? In the meantime, let’s spend 10 (!) days dissecting this article! Today is Day 1.

This year, it costs about $60,000 in tuition, fees and room and board to attend one of the nation’s most selective liberal arts colleges. With financial aid, the average student pays about half of that. One example: Williams College, in western Massachusetts.

The cost there is 10 times higher than it was 40 years ago, even though the consumer price index during that period rose only fourfold. As Williams President Adam Falk sees it, the No. 1 reason for the cost of college is the people.

“We spend about two-thirds of the college’s budget on compensation and benefits for our faculty and staff,” Falk said.


1) Always good to see Williams mentioned in the elite media, even (especially!?) in the context of high costs. The more people who know about Williams, the better. Kudos to Thys for using Williams as the focus for this series. I wish more media Ephs did the same.

2) Falk pretends, and Thys lets him (just so far?) get away with pretending, that faculty/staff costs are beyond his control, that there is nothing he could do to lesson them. Untrue! The reason that costs are so high is not because they have to be but because presidents like Falk (and Schapiro and Payne and . . .) want them to be. Consider just one fact:

There are (at least!) six people at Williams making more than $200,000 per year whose jobs did not exist a decade ago. Source: The 2013 Form 990 (pdf).

Collette Chilton, Chief Investment Officer: $1,181,744
Bradford Wakeman, Director of Investment Operations: $558,142
Stephen Klass, VP of Campus Life: $339,395
Fred Puddester, VP of Finance: $366,249
Mike Reed, VP of Strategic Planning: $282,165
Julia T. Crosby and Lou Sousa, Managing Directors, Investment Office: $200,000+

Now, you might fairly quibble with this list. Mike Reed has decamped for Dickinson, but his replacement will certainly be paid more than $200,000. Crosby and Sousa, because they are new arrivals, are not listed in the Form 990, but their predecessors Hok Joeng and Shawn Donovan (pdf) were paid more than $350,000. Helen Ouellette had a position not dissimilar from Puddester’s (and was paid less than 1/2 as much).

But, big picture, there has been a dramatic growth in the number of highly paid administrators at Williams over the last decade, all in jobs that did not exist before they arrived.

Falk pretends that faculty/staff compensation is something that he has no control over, that it is like the weather, an inexorable force that the College could not possibly resist.

And that is absurd. The College was wildly successful back in 2005 without all these positions. It would be just as successful today without them. Administrative bloat is a choice that Adam Falk (and his predecessors) make every day. Why won’t Thys ask him some hard questions?

Entire article below the break, in case it vanishes some day.
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What Kind of Lectures?

Over at WSO, Zach Ferguson ’13 of the Lecture Committee is seeking input from students about who they should bring to campus:

[W]e thought it might be helpful if we reached beyond the four students who currently serve on the committee and asked the general student body at Williams . . . . Specifically:

1)How have this year’s lectures compared to those of previous years?

2)What lectures/speakers from the past were particualrly memorable, and why?

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Don’t touch my paper

I read this article on the Record. I concur with the author on the opinion that “eliminating the campus newspaper subscription is doing a great disservice to Williams students”.

The article can be found at

(Ed Note: The story refers to dropping the paper subscription to the New York Times)


Stop Hiring Bureaucrats

This is absurd.

The College seeks a Director to head its newly centralized Office of Communications. Reporting to the Assistant to the President for Public Affairs, the Director will play a key and collaborative role in developing a plan for the College’s main communications, external and internal, and lead a team of nine staff in the plan’s implementation. The goal will be to use a variety of media, especially digital ones, to deepen engagement with the College by all its constituencies.

Williams should stop hiring bureaucrats. We have too many as it is. It is not clear that Williams even needs an “Office of Communications” and, to the extent that we do, Jim Kolesar ’74 (and others who currently work for him) is enough.

1) Chad Orzel ’93 writes:

[E]veryone points to an explosion in administrators, while not really accounting for the fact that “administrative staff” includes a lot of critical support staff– most IT departments are classified as administration, for example, as are all the student support services most colleges offer these days– counseling centers, multicultural coordinators, the people who keep track of students with learning disabilities, etc. It’s not all fat salaries for vice presidents– a lot of the administrative budget is stuff that people who complain about “bloat” would hate to lost.

Not me. You could get rid of 90% of the non-faculty positions (including this one) that Williams has added in the last 15 years without meaningfully impacting the quality of a Williams education. The vast majority of these jobs don’t contribute anything useful to Williams, even though the people in them are smart and hard-working. To the extent that certain positions are necessary, the faculty ought to fill them as part of their community service.

2) It just 6 months ago that Williams instituted a (generous?) early retirement program. What is the point of spending all the money necessary to convince someone like (the wonderful) Jo Proctor to retire early if you are just going to hire a new person to take her place (more or less)?

3) If Williams were still drowning in a purple river of moola, then wasteful hiring would be less problematic. But Williams has money problems. Our financial aid is no longer as generous as Amherst/Pomona/Swarthmore (much less Harvard/Yale/Princeton). We closed two dining halls, thereby generating significant problems for students simply looking to have dinner. We should spend money on what matters (financial aid, student experience) and not on what doesn’t.

4) The Trustees should not, obviously, be micro-managing individual hiring decisions at Williams. If President Falk thinks that a new “Office of Communications” is just what Williams needs then, obviously, he deserves the freedom to create and staff it. Yet the Trustees have a responsibility to keep an eye on the big picture. Too many (non-faculty) people work at Williams.. The Trustees should demand that, at a minimum, Williams not increase its total employee count. Better would be to (slowly) cut the staff back to 650 people. If Williams was the #1 college in the country in 1999-2000 with 650 non-faculty staff, then we only need 650 today.


Do Not Hire a New Football Coach

The search for a new football coach is winding down.

The applications are in, all 125 of them, and the winnowing is under way. Williams College athletic director Harry Sheehy said that by the middle of May, a new football coach should be hired.

“I’m pleased with where we are right now,” Sheehy said. “We’re down to a half-dozen folks, and we’re trying to figure out who will be interviewed.


1) This is a mistake. Williams is spending too much money and should cut back on hiring, at least until the policy changes in financial aid are reversed. Perhaps there is no need to fire anyone but, when someone quits, we should not replace them unless we absolutely have to. Both baseball coach Bill Barrale and men’s lacrosse coach George McCormack would do a fine job (although Barrale would get my vote). It was only a few years ago that Williams had 20% fewer coaches than it has now. Were those days so horrible, when head coaches covered two sports? Did the students have less fun? Were the games less enjoyable? No.
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Appealing and Pleasant

FYI (who is anonymous but seems quite knowledgeable about faculty thinking) writes:

From objecting to the day care center to complaining about Williams giving money to local schools, David again and again shows that he is always willing to first cut things that make Williams an appealing and pleasant place to work. He will then point out that these things are a waste of money because most faculty couldn’t find good jobs elsewhere. His vision is clear, and I can promise you that it would make Williams a far far worse place for faculty, staff, and students. Fortunately, no one who matters takes him serious or even pays much attention.

And isn’t that too bad. If Williams had listened to me and avoided wasting money on boondoggles like the day care center or the local schools, then it would have money available for faculty raises this year. Alas, we wasted that money, so now faculty get no raises.

Which do you think faculty would prefer: raises or school/day-care spending?


Alumni Are Watching

From a class agent:

As an alumnus who both makes annual contributions and solicits the same from my classmates I would expect the Administration to take a fiscally responsible position with regard to salaries and increases thereon. I have been without an increase over the last 5 years along with all my colleagues with salaries over $75,000. Yet, I am asked to both increase my annual contribution to Williams and seek the same from my classmates. This is something that I willingly undertake to do with the understanding that the faculty are facing many of the same challenges that I and my fellow alumni are confronting each day. I would be far less likely to contribute if my contribution went towards faculty salary increases rather than assisting needy students in realizing the benefits of a Williams education.

I strongly encourage the administration to be careful in their deliberations as the alumni are watching.

And EphBlog helps them watch.


Budget Transparency

Kudos to Williams for being transparent to faculty/students/staff/alumni about its plans for budget cutting. Consider:

Williams Budget Adjustment Summary (PDF)

Williams Budget Adjustment Presentation (PDF)

Fascinating stuff. My comments below:
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Freeze Faculty Salaries Again?

Biggest debate going on behind the scenes at Williams now? Should faculty salaries be frozen a second year.

1) There is a story here, if the Record wants to find it. (Or maybe I am just having conversations with imaginary sources? Could be!)

2) The Record reported:

The College is currently looking into ways to accomplish the reduction in spending. “Our approach has been, and continues to be, to reduce expenditures in a controlled fashion such that we minimize the impact on the quality of the education we offer our students, while both ensuring that a Williams education remains affordable to every student we admit and protecting our current employees,” Lenhart said.

At last week’s faculty meeting, Lenhart broached several options for bridging the spending gap, including reevaluations of faculty compensation, faculty benefits, the College’s commitments to loan-free financial aid packages, need-blind aid for internationals and spending on sustainability and the Williamstown community.

This is in conjunction with the Trustees decision to spend $73 million from the endowment next year as opposed to the $70 that had been planned 6 months ago. So, there is some more money available than folks had expected.

3) The faculty want their raises and, perhaps more importantly, they want an important say in budget issues that affect them directly. If the Record poked around a bit, it could find some faculty who were quite upset about this. Start poking!

4) I think that Williams needs to spend much less money. Cutting high salaries (most of which go to faculty) is a good place to start. At minimum, we need another year of salary freezes, at least for faculty making more than $100,000.


Cost Cutting Elsewhere

From Time:

A funky roommate named recession is settling in on campuses this fall as colleges and universities slash budgets for virtually everything from salad bars to ski teams. U.S. colleges and universities suffered, on average, a 23% endowment drop in the second half of last year, according to a study by a group of campus business officers. That reduction in funding has set off a scramble to freeze hiring, cut hours and hunker down until the economy improves.

WISCONSIN LUTHERAN COLLEGE Lost its political-science major.

GEORGIA STATE UNIVERSITY Told faculty and staff to take as many as eight days of unpaid leave.

BRYN MAWR COLLEGE Saved $900 when its women’s swim team held a virtual meet against nearby Dickinson; each team’s swimmers raced in their home pool, and then they compared times to declare winners.

HARVARD UNIVERSITY Got rid of weekday hot breakfasts at undergrad dorms, saving $900,000.

Here’s the rest. Williams has instituted some of the other items already.


Update on Finances

Morty shared some numbers/thoughts on the financial situation. [My thoughts in brackets.]

1) Early March was scary. It seemed like the endowment might be around $1.1 million. With a 5% avail, that is only $55 million, which would require major cuts. Would Williams still be Williams? Tough to say. [I cried Wolf in early March.]

2) Fortunately, the market has bounced back dramatically since then. If things are steady for the next two weeks, the endowment should finish the year at about $1.4 billion, down 17%-18%. [I am not sure if that is the actual return on the endowment or also includes the colleges spending as well as new gifts. I think the latter.]

3) The key numbers to watch are the College’s spending from the endowment, which was $91 million this past year and has been budgeted for $78.5 million this coming year (fiscal 2010) and $70 million the following year. Morty promised the trustees that he was going to put those budgets “to bed” so that either his successor or interim president Bill Wagner would be able to use those budgets going forward. Morty insisted that “Williams would still be Williams” even with this necessary belt-tightening caused by these decreases. He promised no change in financial aid, no lay-offs, no team cuts (from 32 varsity teams) and no dining hall closures (from the 5 currently).

4) Morty has spent more time on budget issues over the last year then he did in the previous 8 years put together. The Ad Hoc Committee on Budget Priorities (CBP) has met for hours and hours. Morty has been impressed with the process and pleased with how the community has come together. Although Williams never truly “wasted” money before, there was a lot of spending that could be cut without fundamentally changing the character of the college.

5) The CBP even specked out a budget for fiscal year 2012 that used only $62-$63 million of endowment spending. Basic idea was to plan for a very bad but not totally disastrous scenario. [Although Morty did not go into details, this is a world in which the value of the endowment is around $1.25 billion on June 30, 2011, both because the College has spent over $140 million in avail over the next two years and because investment returns plus gifts have lagged. In that world, the Trustees would expect the College to have, after three years of adjustment, gotten to a sustainable avail percentage of 5%, which would generate $62.5 million of spending a year. Morty feels that the CBP has created a budget for that scenario, one which maintains the key aspects of Williams (aid, no lay-offs, no team cuts or dining hall closing). He is quite pleased to have completed this planning.

6) If the endowment is much below $1.25 billion on June 30, 2011, then all bets are off. [Morty did not cite that date/amount specifically, but just talked about situations in which the endowment was much lower than it is today.] Morty mentioned sacred cows like aid for international students, dining halls and sports teams. He didn’t want to cut any of those things, nor would his successor. But, if the money isn’t there, the money isn’t there.

My comments:

1) Perhaps the only jarring note was Morty making a big distinction between aid for US students and aid for internationals. Is Williams really so parochial as that? There may come a time when we need to cut aid, but we should do so without regard to citizenship. Discriminating against internationals in aid awards makes no more sense today than discriminating against Jews in admissions did 75 years ago.

2) All of the above is perfectly sensible. Morty and the trustees and the folks on CBP are smart and caring Ephs. They are acting in the best interests of the College and making sensible trade-offs.

3) However, they are all wrong about two key assumptions. First, instead of looking at the value of the endowment, they should look at the net financial wealth of the College, which we can safely approximate as endowment minus debt. With a debt of around $260 million, the difference matters. Second, a long term real growth rate assumption of 5% is highly implausible. (If Williams could grow its investments at 5% and world GDP growth is 3%, then eventually Williams would own the world. Unlikely!).

So, the worst case assumption of spending $62.5 million out of a $1.25 billion endowment in fiscal 2012 is profligate. Net financial wealth (in that scenario) would only be around $1 billion and a reasonable real return assumption is closer to 3%. So, in that world, the College ought to be planning to spend much closer to $30 million than $62.5 million.


Athletic Spending

I wondered why Williams reports $6.3 million in annual spending on athletics to alumni but only $4.2 million to the federal government. Chris Winters ’95, director of institutional research, provides this answer.

To understand this difference it is first necessary to understand the purpose of the EADA (Equity in Athletics Disclosure Act). The EADA is a law and accompanying regs, passed as part of the 1965 Higher Ed Act, that requires coed colleges and universities that receive federal student aid (Pell, Perkins, fed work study, etc.) and that have intercollegiate athletics to disclose certain statistics about their athletic programs. The EADA is primarily concerned with gender equity in sports participation and spending.

Like most federal mandates the EADA attempts to impose a one-size-fits all set of definitions onto thousands of very dissimilar collegiate athletics program. From my perspective, the EADA definitions are more applicable to large public universities than small liberal arts colleges. For example, the EADA folks always question why we have such little “revenue” from our sports. We have to explain to them every year that, with very few exceptions, we do not sell tickets or charge gate fees to our events, nor do we sell naming rights to stadiums, or do any of the other stuff that brings in direct revenue to many university athletic programs.

But I digress, suffice it to say that the EADA’s purpose in life is to capture the cost of fielding intercollegiate teams and no more. Basically, they try to capture the full cost of what it takes to field any given (male or female) intercollegiate team. The main categories of expenses they care about are compensation, travel, recruiting, equipment, insurance, and a handful of others. They do not care about the many other things that you and I might consider to be integral parts of a quality college athletics program but that do not contribute to fielding intercollegiate teams.

On the other hand, the $6.3 figure that we report in our operating expenditures table DOES care about all those other things. The $6.3 is the total expenditures that fall under what we think of as the Athletic Department’s bailiwick. In order to tie the EADA’s reported 4.2 million to the opex’s reported $6.3 million we would need to add back things like the Outing Club, Mountain Day, some student wages (lifeguards and monitors and such), the cost of all the new equipment for the recent fitness center renovation (expensed as a one-time blip), and a bunch of other expenses. However, the majority of the difference is in the allocated cost of salaries and wages to the physical education program. For example, if a coach spends 20% of his time in PE responsibilities, then 20% of his compensation is NOT reflected in the EADA total but IS reflected in the opex total.

Those are the key differences. Hope that helps.

Thanks, as always, to Chris for taking the time to answer our questions. This all seems perfectly sensible. More comments below:
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Bet Me

Vermando challenges me.

You can have Bolin or you can have crew. You can’t have both. Choose.

Premise rejected. He hates one, loves the other, and is trying to make us choose. That’s good rhetoric but crap logic.

I will bet David $50 that in the 2011-2012 school year that Williams will have both. Don’t think we can have both? I call BS.

Bet accepted! Details below.
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Most depressing comment on EphBlog this month? This one from Jeff.

In his Record farewell article, Morty mentions — and this shocked me — that a few varsity sports may have to be cut if the economy fails to improve in a few years.

You were “shocked” by this? Don’t you read EphBlog? Williams is in huge, huge trouble. How many times do I need to say that? Here is the quote from Morty.

He predicted that if the recession continues for several years, the College will reduce its budget in ways similar to other colleges, perhaps by eliminating a couple of the 32 varsity sports teams, forcing staff to take unpaid furloughs and reducing the amount of financial aid offered to international students. “If the recession ends, we’ll never see these things,” Schapiro said. “But if things don’t recover, there will be years of financial difficulty. We’re going to hold to our principles, but we’re going to sacrifice.”

Although I do not think that the Trustees are doing enough, they still plan on spending $8.5 million less from the endowment in 2010-2011 then they will this coming year. Look around at the Williams budget. Think it is easy to find $8 million to cut, especially after all the cuts that have already been made? It isn’t.

One of the reasons that I have been so adamant about cutting the budget now is because, once you have spent money this year, it isn’t coming back. That money is gone forever.

Middlebury just cut spending on crew. Williams is a richer school than Middlebury but not that much richer.

The trade-offs are fairly obvious. Williams spends about $200,000 per year on the Bolin Fellowships. I think that this money is pretty much wasted. (During flush times, I would have preferred to spend that money on Williams professors.) But, even if you think that the spending is valuable, you need to compare it to other things that the College provides, because the recession means that something is being cut.

Once you add in coaching salaries and other expenses, crew probably costs somewhere around $200,000 per year. By keeping Bolin for at least one or two more years, we are jeopardizing a year of crew.

You can have Bolin or you can have crew. You can’t have both. Choose.

UPDATE: Further discussion here


Sports Data

This New York Times article on college sports spending does not mention Williams, but it does provide for an excuse to look closely at the College’s athletics budget, details of which are available here. Interesting data below the break.
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Budget Update

Provost Bill Lenhart provides some background on the budget.

The $205M budget mentioned [in Morty’s letter for FY 2010] is our “total current expenditures” number which, in addition to employee compensation, financial aid, and managers’ budgets, also includes certain expenditures on our physical plant (so-called capital renewal), interest on debt, and some miscellaneous expenses such as community support.

The $205 would be comparable to a figure of $200M (budgeted) or $197.5M (actual) for FY2008. A slightly longer answer is: Our cash-flow-based internal financial planning model provides a different (but useful) view of our finances than does our audited (accrual accounting based) financial statement, although as part of our year-end “closing of the books”/external auditing process the two are reconciled annually. Both approaches have strengths and weaknesses.

The differences between the two are many, including how financial aid, gift revenue, interest on debt, gift pledges, the value of the physical plant, reserves to cover “liabilities” such as owed vacation time, sick leave, workers’ comp, et cetera are accounted for.

Record reporter Yue-Yi Hwa ’11 adds these details.

According to Jim Kolesar, assistant to the president for public affairs, an approximate breakdown of last year’s operating budget is: 50% compensation, 25% managers’ budgets, 20% financial aid, and 5% capital renewal. Those numbers — particularly financial aid and capital renewal — differ slightly, but not drastically, for the $205 million operating budget of 2009-10.

Thanks to both for permission to print their comments.

Summary: There are two ways to view the Williams budget for FY 2010 (which starts on July 1):

First, one could claim that Williams has accomplished meaningful belt-tightening. We are planning to spend much less next year than we did this year without changing financial aid or engaging in lay-offs. Since other costs, like health care, continue to rise, we have been forced to make significant cuts elsewhere. Therefore, Williams is acting with appropriate frugality in response to the economic crisis.

Second, one could claim that Williams, while having made some cuts, has done nowhere near enough given the magnitude of the crisis that it faces. In FY 2008, Williams was a very rich school, with a starting endowment of over $1.9 billion. If we are (at least!) 1/3 poorer now, how can we afford to spend even more in FY 2010 then we did in FY 2008? The short answer is that we can’t. And, by avoiding hard choices now, we make the inevitable cuts to come even more painful than they otherwise would be, all so Morty can ride off to Northwestern as the nice guy.

Further details and commentary below.
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Budget Details

From page 2 of the FY 2007 Form 990 (pdf), we have the most detailed publicly available breakdown of spending at Williams.


Click for a larger image or, more conveniently, just go directly to the pdf. Detailed comments below.
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“Cutting” The Operating Budget

Our discussion about Morty’s recent letter revealed some confusion about the College’s spending. I am here to help! What are the facts? Start with the history of spending at Williams. (If you don’t read that, the below may not make sense.)

Year  Operating Budget Avail Spending
2011                          70 
2010          205*            79
2009          192*            92
2008          177             79
2007          164               
2006          154                
2005          140                
2004          137                

Comments below:
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Important Conversation

Did any reader attend last week’s staff meeting with Morty?

Dear Staff Member,

We hope you will use this site to submit questions for us to address in the two open economic forums for staff scheduled for Thursday, April 9th at 10:30 and Friday, April 10th at 2:45.

The submissions, all of which are confidential unless you choose to put your name on yours, will go to members of the Staff Council. They’ll organize them and pass them on to us.

To give time for that work, the site will stop taking submissions on April 1st.

Thank you for taking part in this important conversation.

Morty Schapiro, President
Bill Lenhart, Provost
Steve Klass, VP for Operations

I don’t think that this meeting was secret, so please tell us what happened. I would be especially curious to know about any promises made (or not made) about avoiding lay-offs. Morty has made a big deal about this in the past, but lead trustee Greg Avis ’80 was less adamant. I think that, unless the College is going to make significant changes in financial aid, lay-offs are inevitable.

The secret to firing people is to do it all at once and to do enough so that everyone who is left “knows” that there job is safe. The natural options the timing of any lay-off announcements would be either a) Next week after the Trustee meeting or b) After May 1 (the decision deadline for the class of 2013, or c) Late June, after graduation and reunions. There are advantages and disadvantages for each choice.

Think that I am crying Wolf again? Note that Harvard is talking about lay-offs.

Harvard University’s Faculty of Arts and Sciences faces a projected recurring annual deficit of $220 million within two years if it does not cut spending substantially and reshape its academic ambitions, Michael D. Smith, the group’s dean, warned yesterday.

Smith said that in the next two weeks, he plans to create working groups to help identify further large-scale cuts that could include changes to academic programs and other “intellectual activities” that would reshape the faculty.

Staff layoffs may be unavoidable, he said. “I have no desire to do layoffs, but it’s increasingly likely . . . that we will not have as much need for faculty or staff as we have today,” Smith said.

Harvard is much wealthier than Williams. If they are planning lay-offs, what do you think lies in our future?

UPDATE: Although there are many messy details in measuring budgets, a back-of-the-envelope guess as to Harvard’s planned budget cutting is about 20% (over $200 million out of a $1.1 operating budget). Roughly speaking, that corresponds to a $40 million dollar cut at Williams (20% of an operating budget of $200 million). I was excoriated for proposing $10 million worth of cuts. Where do readers who don’t like those cuts think the savings are going to come from? We can be almost certain that an announcement about early retirements is coming soon.


Faculty Compensation 2008-2009

Insider Higher Ed reports on faculty salaries in 2008-2009. See the this big file (pdf) for the data for individual schools. Summary for Williams:

                   Number      Salary      Benefits    Total Compensation
Full Professors      142     $132,700      $38,000            $170,700
Associate             42      $92,100      $28,800            $120,900
Assistant             72      $75,800      $24,200            $100,000
All Ranks            256     $109,800      $32,500            $142,300

See this EphBlog post for a discussion of what the data means. Last year, Williams was at:

                   Number      Salary      Benefits    Total Compensation
Full Professors      134     $126,400      $37,100            $163,500
Associate             37      $90,300      $28,000            $118,300
Assistant             80      $73,100      $23,500             $96,600
All Ranks            251     $104,100      $31,400            $135,500

My prediction that Williams would have around 250 faculty members for at least the next few years is almost sure to come true. Here is the data for the best paying liberal arts colleges.


The goal of this post is not to argue that Williams professors are paid too much or too little. (In my view, they are paid just right, at least those with salaries below $150,000. Williams administrators are paid too much.) Instead, I just want to explain the details since it seems like many readers have no clue as to empirical reality. Now that we know the salary data for 2008-2009, I can answer Derek’s question from last October.

Dave, for once, for the love of all things holy, could you not demagogue the issue? What percentage of Williams profs make more than $100,000?

Since the average salary of Williams professors in 2008-2009 is $109,800, the answer is about 50%. I am please to be of help.



Professor Sam Crane wrote:

Thank goodness, too, that no one of any significance here listens to anything Kane has to say. His impoverished, economistic approach to the question of what Williams is and should be would produce an arid and stale institution.

Also: why does he seem to assume that people here have not already taken steps to address the unfolding economic crisis? Just because they do not tell David Kane what they are doing does not mean they are doing nothing. They are doing quite a bit, some of which will surprise you when you learn of it.

I replied to much of this here. Today, I want to focus on the last sentence. What will “surprise” us?

First, I don’t know. My sources have been uncharacteristically quiet. If the College is planning a major surprise, I have not heard about it.

Second, I don’t doubt Sam. He is a senior professor with many friends and contacts, including some on the Ad Hoc Committee on Budget Priorities. If he claims that there is a surprise in the works, then I believe him.

Third, I would be shocked (and upset) if the “surprise” involved changes in financial aid, especially the no-loan policy. Williams is in trouble, but not that much trouble. I believe senior trustee Greg Avis ’80 when he implies that financial aid will be the last cut made.

Fourth, I would not be shocked if the surprise were lay-offs. Although Morty promised no lay-offs, the endowment is now in much worse shape than it was in January. Williams has too many staff and a 50 person reduction, via both lay-offs and early retirement would be about the nicest gift that Morty could give to his successor. We heard rumors of lay-offs for after Spring Break. Could dining in Dodd be in the chopping block? You bet. The next big date is the April (this coming week-end?) Trustee meeting. The Trustees will vote to approve the budget. My worry is that the budget is too large, that not enough cutting has been done. If so, I hope that the Trustees reject the budget and tell the Administration to find more cuts.

Fifth, beyond that, I am stumped. I outlined the major cost cutting ideas that I (or anyone else) could come up with in this series. (See also this discussion from Jeff.) I would not be surprised to see any of my recommendations announced. But Sam implies (or perhaps I am reading to much into it) that there is something else major that the College could/will do. What might that be?

Speculation wanted.


A Report From Williams 2008

Thanks to Rob White and Brooks Foehl ’88 from the Alumni Office for providing copies of A Report From Williams 2008 and its insert. Normally, this report includes information on the endowment and the budget, but that data was distributed via EphNotes this year.

FYI, this is the report that the College sends out each year to Alumni (and parents?). If readers have questions, please ask them. I think that the College does an amazing job with these reports but some alumni find them excessive. I am not sure why they did not include the budget and endowment information in the main Report. I hope that they will next year. I’ll highlight a different aspect of the Report each day this week.

Most important sentence?

In planning budget cuts, our first commitments are to meet the full need of all current and admitted students and then to avoid layoffs.

That’s from lead trustee Greg Avis ’80. It is always dangerous to read too much into a single sentence, but Avis is a smart and careful Eph, so here is my take.

a) Lay-offs will come before cuts financial aid. Rarely has “then” implied so much. Wow! If you are a Williams employee, this should make you worried. The financial aid budget at Williams is around $40 $30 million. If Avis and/or the trustees is really committed to keep spending at that level, then lay-offs are inevitable. There are a lot of Williams faculty (most? all?) that would rather cut financial aid back to say $30 $20 million (which is what Williams spent just a few years ago) to avoid making $10 million in cuts elsewhere. Since the most important input to a Williams education is the quality of the students, I agree completely with Avis’s priorities. Cut everything else to the bone before you cut a dime from financial aid.

b) “current and admitted” is not the same thing as “future.” Avis leaves open the door to changing the financial aid policy for students after the class of 2013.

c) “meet the full need” means different things to different people. Williams met the “full need” of many of my classmates by forcing them to take out tens of thousands of dollars of loans. Is Avis (or the Trustees) committed to a no-loan policy? I don’t know but I hope so.

d) Glad to see (consistent with previous reporting) that no distinction between domestic and international students is being made, despite (because of?) Morty’s floating a trial balloon last fall.



Swarthmore’s Tim Burke has thoughts on budget cutting at schools like Williams.

Swarthmore, like virtually all American colleges and universities, is presently engaged in serious collective scrutiny of its spending habits. The hope in our case and many others is that small, incremental frugalities will head off any need for more drastic measures to control spending.

Read the whole thing. There are dozens of faculty members at Williams as thoughtful and observant as Burke. How come (almost) none of them write about Williams?


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