Dartmouth employees to get bonuses as endowment returns 46.5%

Valley News Business Writer
Published: 10/11/2021 6:58:53 PM
Modified: 10/11/2021 8:23:37 PM

HANOVER — A banner year for Dartmouth College’s investments has prompted the college to share some of its gains with employees and students.

The college, in announcing that its endowment soared by $2.5 billion, to $8.5 billion, said on Monday it would give employees a 3% bonus at the end of the year.

Dartmouth’s reported return of 46.5%, as staggering as it is, is nonetheless not out of the norm this year among the country’s wealthiest universities, several of which are reporting unprecedented gains of 50% and higher thanks to soaring stock markets and rising private equity and venture funds.

The 3% bonus applies to all union and non-union employees who are on the Dartmouth payroll for the full second half of 2021, which Dartmouth estimates will be about 4,000 people.

The college is also boosting the minimum hourly wage for student workers to $11.50 per hour from $7.75 per hour. The pay raise over the course of the year will affect about 1,000 students in hourly jobs, according to Dartmouth spokeswoman Diana Lawrence.

And graduate students who receive stipends will get an extra $1,000, the college said. Between 600 and 650 graduate students will qualify for the added stipend, she said.

Dartmouth President Phil Hanlon said the bonus and pay raises are in recognition of the challenges employees — full-time and part-time faculty, staff and researchers — faced during nearly two years of the pandemic.

“It has been inspiring to see the Dartmouth community rise to the challenges of the last 18 months,” Hanlon said in a prepared statement. “This is a moment to recognize the contributions of the community by investing in Dartmouth’s strategic priorities and its people.”

Dartmouth further said that, effectively immediately, it was eliminating the $1,000 “parent contribution” from the families of students whose income is $65,000 or less and who have “typical assets.” (Dartmouth already has been offering a full-tuition award to students whose families make up to $100,000, with the threshold rising to $125,000 next year.)

The bonus is unexpected news for Dartmouth’s unionized workers, said Chris Peck, who heads Local 560 of the Service Employees’ International Union, which represents the college’s custodians, dining services workers and tradespeople.

Peck estimated that “better than half” of the local’s approximately 400 members — membership is down at least 30 people because of the ongoing worker shortage — earn about $40,000 annually, so a 3% bonus equals $1,200.

“That’s nice, although taxes will take out some,” he said.

The bonus comes on top of other one-time incentives Dartmouth has been offering his members, Peck said, such as $1,000 for current and new-hire third shift workers and $750 for second-shift workers. And the college recently announced it was making room for an addtional paid week of days off at the upcoming year-end holidays in addition to an extra floating personal day.

But, Peck pointed out, the bonuses while welcomed do not come with any assurance of happening again.

“We prefer to see it in raises because it compounds over time,” he said.

A college’s endowment grows in two ways: increases in the value of investments and money flowing into its coffers from fundraising campaigns.

In 2018, Dartmouth announced the launch of a $3 billion fundraising campaign, at which time the college said it already had in hand $1.5 billion in gifts and commitments. Dartmouth said this spring that it is in the “final phase” of the campaign.

Dartmouth last week said that it had raised $277 million in fundraising commitments in fiscal year 2021.

The college trumpeted that as an achievement since the COVID-19 pandemic required it to raise the money “100% virtually,” although it is significantly below the $422.6 million raised in fiscal 2018.

Dartmouth said its $2.52 billion increase in endowment for fiscal year 2021, which ended June 30, marked a return of 46.5% and that the endowment has “produced annual returns” averaging 12.8% over the past 10 years.

Last year at this time, Dartmouth said its endowment had risen to what was then a record $5.98 billion as the college’s investments generated a return of 7.6%.

Earlier this year, Dartmouth’s board of trustees voted to draw $335 million — equivalent to about 25% of the college’s $1.2 billion operating budget — for fiscal year 2022 needs of the college.

Contact John Lippman at jlippman@vnews.com.

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