The Budget’s Gone Up?
Written by Bwog Staff
Yes, the endowment may have taken a plunge in recent months, but you may have noticed the news was largely lacking in stories about spending cuts around Columbia. Contrast that with our friends in places such as New Haven, Princeton, Ithaca, and (especially) Cambridge, all of whom knew long ago that cuts were on the way.
Now, the New York Times reports that, despite a 22 percent hit on the endowment, Columbia’s budget will increase spending 0.4 percent. That’s still a decline after adjusting for inflation, technically, but, as the Times puts it, the amount is “is essentially flat and avoids the severe cuts faced by its peers.”
How is Columbia making it through relatively intact? According to the Times, “Columbia does not rely on its endowment nearly as much as its peers do; about 13 percent of its annual operating expenses are met with income from its endowment, which was valued at $7.1 billion on June 30 last year.” By contrast, Princeton has relied on its endowment for 45 percent of expenses. This is not to say that cost-cutting has been non-existent, “but mostly the university has slowed the pace of hiring, creating panels to screen all appointments. Many of Columbia’s schools are not raising faculty and staff salaries for next year.” As a result, Columbia has maitained its AAA credit rating, something that institutions like Dartmouth have been unable to do. Turns out all those years of a struggling endowment did have an upside.