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Dartmouth endowment grows to record $6 billion

  • Dartmouth President Phil Hanlon answers questions during an editorial board meeting at the Valley News in West Lebanon, N.H., on Wednesday, July 25, 2018. (Valley News - August Frank) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Staff Writer
Published: 9/21/2020 2:00:44 PM
Modified: 9/21/2020 9:28:42 PM

HANOVER — Despite a turbulent spring on Wall Street, Dartmouth College’s endowment rose to a record $5.98 billion as the college’s investments generated a return of 7.6% for fiscal year 2020, the college said Monday.

The announcement that the endowment had generated $399 million in returns and grew in total by more than $240 million since June 2019 came as Dartmouth has started to lay off and furlough some staff workers, citing both a projected $83 million shortfall for FY 2021 in the COVID-19 pandemic and a looming structural deficit.

In a phone interview Monday evening, Dartmouth President Phil Hanlon said distributions from the endowment have “grown steadily” over the past decade and now comprise about 30% of Dartmouth’s $1.12 billion operating budget, up from about 23% a decade ago.

But he also repeated what other top Dartmouth officials have said: that the endowment should not be regarded “as a checking account and used for whatever today’s needs are,” both because of restrictions on some gifts to the endowment and because of its role as “an ongoing, long-term source of support for the institution.”

“The point is the endowment is really not just for this year, but it’s for every year going forward, and we have to make sure we protect it and nurture it and grow it, so that it will be there in the future,” Hanlon said.

Eighteen staff members at the Tuck School of Business at Dartmouth were laid off last week, effective at the end of October, and Hanlon echoed comments from Dartmouth Provost Joseph Helble who said there will be other layoffs and furloughs at the college, though they would not be “widespread.”

“We’re not really kicking around any numbers right now,” Hanlon said when asked how many jobs might ultimately be cut. “What we do expect is that each divisional leader will need to make the adjustments necessary to meet their unit’s financial challenges.”

Dartmouth Chief Financial Officer Michael Wagner said the endowment generated $399 million over the course of FY 2020, with $273 million distributed for operating costs and the rest reinvested. When $118 million in gifts and other sources was also added to the endowment, it grew by about $244 million, from $5.73 billion to $5.98 billion since June 2019.

Dartmouth said it is providing $119 million in undergraduate financial aid this school year including scholarships covering full tuition for students whose families make $100,000 or less.

Dartmouth said 237 first-year students, about 22% of the class, are receiving aid covering all of their tuition.

Hanlon said that in March the endowment was down about 20% as markets plummeted at the start of the U.S. outbreak, and that the gains reported by the end of June were “better news than expected.”

Dartmouth’s endowment had fallen to below $3 billion 10 years ago because of the Great Recession, but has grown steadily and to record heights, thanks to an annualized return of 10.4% over the past decade.

Despite its recovery, Hanlon and other Dartmouth officials said belt-tightening must take place because the college faces a structural deficit in future years if it wants to proceed with its proposed $200 million Green Energy Project to replace its steam heating system; upgrade aging residence halls; and overhaul its information technology infrastructure, as well.

SEIU Local 560 President Chris Peck, who represents more than 500 custodial, food preparation and other service-job workers on the Dartmouth campus, noted that the endowment had doubled in the last decade and said of the Hanlon administration, “They have treated employees fairly well, but at the end of the day, do they have to do what they are doing, or were there other options?”

In the phone interview, Hanlon repeatedly said leaders at Dartmouth are “in partnership with the Upper Valley community” and said “my heart goes out to anyone who is negatively impacted” by the fallout from the COVID-19 pandemic, which also involved cutting five sports and permanently closing the Hanover Country Club. “These are difficult decisions, these are hard decisions, and we absolutely did not take them lightly,” he said.

He also said he was glad to have students back on campus — Hanlon himself is teaching a math class remotely — and was pleased by the low number of COVID-19 cases reported thus far on campus. As of Monday, Dartmouth reported 4 active cases among more than 5,550 students and staff tested.

“I believe in our students, I believe that they will do the things necessary to protect themselves and each other and the broader community, and so far the number of confirmed cases is extremely low and I’m really hopeful that it will stay that way,” Hanlon said.

Asked what he thought when he learned that dozens of first-year Tuck School of Business students had violated social-distancing requirements and attended a party at a dormitory on Sept. 4, Hanlon said, “I think I will pass on that one.”

The students were ordered to quarantine and could face discipline from the college. Dartmouth spokesman Justin Anderson, who was on the call with Hanlon, said the college was not going to comment on an “open issue.”

John P. Gregg can be reached at jgregg@vnews.com.

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