As Dartmouth prepares to compensate for its $100-million deficit over the next two years, its peer institutions' strategies in navigating budget shortfalls offer a sense of scale to measure how new financial policies may affect College programs and services.
While Ivy League endowments remain high compared to other universities' Harvard University's remains valued at over $26 billion spending cuts and layoffs have weighed heavily on the Ivy League.
Layoffs have been a common solution at other Ivy League institutions, notably Harvard, which laid off 275 of its over 13,000 employees in the last fiscal year, according to the Harvard Crimson. The layoffs stemmed from an endowment loss of over 27 percent in fiscal year 2009. Harvard also instituted salary freezes for all staff members and instituted an early-retirement program in which more than 500 of its staff members participated.
Harvard President Drew Gilpin Faust called the layoffs "a painful but important round of reductions in force" in a letter preceding the University's annual fiscal report released in October.
Yale University has instituted similar reductions to account for last year's endowment loss of almost 25 percent. The University laid off about 100 employees, also delaying new faculty hires and suspending most of its construction projects, the Yale Daily News reported last month.
While these cuts have eliminated nearly $250 million from Yale's budget deficit, a further $100-million deficit remains, according to the Daily News.
Yale has not yet announced where the University will allocate additional spending cuts, although the Daily News has reported that more layoffs are likely. Last year's layoffs represented just over a 1 percent reduction in force, as opposed to the roughly 2 percent reduction that Harvard carried out last year.
Princeton University announced in October that it would dismiss 43 employees as part of an effort to cut $170 million from its budget over the next two years, according to The Daily Princetonian.
It is not yet clear how many additional layoffs will be necessary at Dartmouth. The College dismissed 60 employees last February proportionally similar to the cut made by Harvard.
Harvard, however, has not announced plans for further staff cuts. In a presentation earlier this month, College President Jim Yong Kim said that further layoffs are likely, but would not be the only solution to the current budget problem, stressing the need for "fundamental changes in the way we organize our business processes."
The previous round of layoffs was estimated to have saved the College $4.5 million. A salary freeze similar to those instituted at other universities saved an additional $17 million, The Dartmouth previously reported.
Given the fact that wages and salaries account for over 40 percent of the College's operating expenses, further cuts in either wages or personnel would be an inevitable part of larger reductions.
Concerns have been raised among College staff members, most visibly by members of the Service Employees International Union, that budget reductions may result in a new round of layoffs, The Dartmouth reported last week.
The College's rejection of the SEIU's appeal to suspend further layoffs and pay cuts last Thursday may suggest that such reductions in personnel and wages will be a significant part of coming budget changes.
The University of Pennsylvania may be in better financial shape than some peers. Notably, Penn is less dependent on its endowment than other Ivy League institutions, The Daily Pennsylvanian reported last month.
Penn has experienced smaller reductions in staff and fewer early retirements than the majority of its peers, according to a statement released by its Executive Vice President Craig Carnaroli in December. Carnaroli's statement said that Penn is on track to meet its goal of reducing spending by $58 million by July 30 of this year, The Daily Pennsylvanian reported.
Penn's endowment has also seen the smallest percentage decrease compared to peers', according to a statement released by Penn President Amy Gutmann last month. Penn has sought to eliminate $56.2 million from its budget through means other than layoffs, including reductions in salaries, discretionary expenses and capital projects. An earlier statement, released by the University in August, said that the endowment had only lost about 16 percent of its value in the fiscal year ending last summer.
Although the College has not yet released information regarding specific budget cuts, Kim said in his presentation that Dartmouth cannot rely entirely on endowment growth or increased donations to alleviate the College's budget problems. Kim's presentation generally avoided specifics on what aspects of the budget would be cut.
