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Home Front: Culture Wars
Yale Plans Belt Tightening : Endowment Falls 25 Percent
2008-12-18
Damn! Looks like Adolph Hitler Campbell is screwed for the Class of 2027...
Yale University's president sent a letter to faculty and staff Tuesday saying that as a result of the recession, the university's estimated $23 billion endowment fund has lost 25 percent of its value since June, dropping to $17 billion. President Richard C. Levin said the 25 percent loss would have a significant impact on operations, including delaying the start of new construction projects and cutting spending in a variety of areas.

Levin said, however, that Yale would "maintain our commitment to the improvements in financial aid for students in Yale College" meant to support low- and middle-income families that were announced last year. The school will also continue to recruit faculty while being "judicious in authorizing new positions" and filling vacancies, he said.

"It is important to recognize that $17 billion is still a very large endowment," Levin said. "This was where the endowment stood as recently as January 2006. Still, the 25 percent decline we have experienced has a very significant impact on our operations because income from the endowment supports 44 percent of the university's annual expense base of $2.7 billion."
Universities typically spend 4 to 4.5 percent of an endowment each year. They plan to generate 6 to 7 percent in returns on average, thus allowing the endowment to grow over time while harvesting some of the return to fund current operations. A 25 percent cut in total endowment, therefore, means a similar amount to be cut in the funds provided to operations. That's going to hurt.
Levin's announcement comes weeks after Harvard University said its $36.9 billion endowment dropped 22 percent and could decline as much as 30 percent by June 30, 2009, the end of the fiscal year. Levin ended his letter urging those with ideas on how to cut costs to e-mail them to suggestions@yale.edu.
My suggestion? Start drinking heavily...
Posted by:Pappy

#25  That picture demonstrates why one always matches one's underthings to one's overthings. Also why sports clothes should be reserved for sporting events. The anchor tattoo discussion will be reserved for another time.
Posted by: trailing wife    2008-12-18 20:46  

#24  nice bruises....one would hope there's a low enough polyester content in those "shorts" that spontaneous combustion odds would be only average
Posted by: Frank G   2008-12-18 20:20  

#23  A U:

Had to disinfect my mouse pointer after cutting and pasting that picture. (I'm assuming your are talking about the visible picture and not the linked picture in the comment before it.)
Posted by: GolfBravoUSMC   2008-12-18 20:06  

#22  GB, that's just wrong. I was trying to read a very interesting discussion between NS and lotp, with what I thought was a very sage comment thrown in by remoteman, and then you post that...that...unfortunate belt tightening example.
Posted by: Abu Uluque   2008-12-18 19:22  

#21  Since science & engineering grant overhead assessments are used to fund worthless counterproductive liberal programs, and since a healthy academic science and engineering structure is highly desirable, I suggest the answer is (re)focus science and engineering in universities dedicated to just those programs. Like MIT, Texas A&M, Cal Tech, etc. Let the abused programs at places like Stanford, Yale etc. fade away by luring their good people to less liberally burdened places.
Posted by: Glenmore   2008-12-18 19:15  

#20  That's the kind of NSFA they wer talking about, GB. Wash my eyes out with clorox.
Posted by: Nimble Spemble   2008-12-18 18:44  

#19  With some belt tightening you get the toothpaste tube effect, it pops out somewhere else.




Posted by: GolfBravoUSMC   2008-12-18 17:47  

#18  Belt tightening is not all bad.
Posted by: GolfBravoUSMC   2008-12-18 16:20  

#17  

Posted by: GolfBravoUSMC   2008-12-18 16:17  

#16  I do indeed know all about overhead rates and what goes into them.  Research done on grants uses capital equipment and facilities built out of the endowment or specific bequests.  And large research universities with strong research track records got there in most cases because of that investment, which influences overhead rates. (And yeah, there's other stuff in there too, some of it fat. But - my point - not all of it by any means.)

Re: the think tank model, maybe.   I've done some consulting to two of the public/private research consortia that were popular in the 90s. That model is heavily flawed in part because the private partners had no real incentive to put their best research and people into them.

The DOD labs model works, some, but these days they award and oversee grants as much as they do direct research. Their expertise these days is most heavily on the application needs, not the science to meet those needs. And the Los Alamos etc. labs flourished most when we had a common commitment to defense and the self confidence to consider it justified.
Posted by: lotp   2008-12-18 15:29  

#15  #9 Come on lotp, you know perfectly well research is done on outside grants. And, places like Yale take a much higher overhead % than less prestigious institutions.
Posted by: g(r)omgoru   2008-12-18 15:15  

#14  Agree, lotp. That is why I expect some other structure to arise, possibly like the think tanks. But the current model is wearing out, for sure.

remoteman, the problem is the research generates lots of "overhead" that the universities have billed in a manner bordering on fraud to bring in money that ends up supporting the structure for the softies. Something should have been done about this when Draper Labs et al were taking it in the pants in the '60s, but I guess the fraud wasn't as bad then and it wasn't clear how wacko the universities would become.
Posted by: Nimble Spemble   2008-12-18 15:13  

#13  The science and engineering departments aren't the usual haunts of the lefties in university land. This is where the sane ones are. Cut the soft bs, not the hard science.
Posted by: remoteman   2008-12-18 14:49  

#12  I hear you, NS, but those industrial labs had the benefit of unquestioned US economic leadership plus the national research policies / investments promulgated by Vannevar Bush.  That was Cold War mil investment, by and large, paid for in part by the fact that we had little manufacturing competition from Europe (still recovering from WWII) and Asia.

Today there is no shared consensus about investing to fight a common enemy as there was when the Soviets boasted nascent space and atomic programs.  And there is a huge increase in personally managed investment portfolios which results in pressure on business for short term profits vs. longer term research support.

Not to mention the fact that those companies are now internationally traded (i.e. owned).
Posted by: lotp   2008-12-18 11:58  

#11  I think it would be a hoot if universities were required to post their sponsers like NASCAR.
Posted by: swksvolFF   2008-12-18 11:36  

#10  Having top universities doing expensive, cutting edge science isn't a luxury, it's an important investment.

That's where I get off the train. Yes, we need expensive, cutting edge science [research]. No, we don't need it done at universities. Especially anti-American universities that at the least refuse to align themselves with the US at best, and ally themselves with our enemies.

Re-invigorate the industrial labs. I'd rather see the research contracts going to GE, AT&T and DuPont than Harvard, Chicago and Stanford. That's the way it was before WWII and there is no reason it or another variant won't work if the resources are directed there. A shift in the locus for scientific research is overdue and a probable outcome of the transformation we have begun.

But America's "top universities" need to take twixt the knees, just like the auto industry. If it makes them limp for a couple of decades, so much the better.
Posted by: Nimble Spemble   2008-12-18 10:52  

#9  OK, some of those universities have been rich and a lot are currently infested with lefties including a bunch of older profs who are starting to draw retirement.

But unless you think the US can maintain scientific and technical progress using highschool beakers and bunson burners, facilities for research are needed.  And when we're talking nano-level engineering, or gene splicing, or the advanced materials research that has direct military and commercial applications, we're also talking expensive labs supported by technicians and consuming supplies.

Over the last decade the US has started to slip with regard to new patents and useful breakthroughs compared to other countries.   Universities aren't the only source for those but they are the key starting place.   We ate a lot of our intellectual property seed corn in the last 15 years as the .com boom under Clinton encouraged invesment in quickly commercializable research rather than the longer term research that was the basis for our prosperity in the 60s-80s.   And since 9/11 there's been an understandable focus on getting things to the troops rather than on broader and more basic research.

But it's that basic research that underpins economic competitiveness  It takes time for the decay of that research infrastructure to become obvious, just as it takes time for clogged arteries to kill people.  Both are unconducive to health and a good future, tho.   Having top universities doing expensive, cutting edge science isn't a luxury, it's an important investment.

And it's an investment with direct military and economic security payoffs, too.
Posted by: lotp   2008-12-18 10:29  

#8  Let's see, Yale has 11,000 students and had has a 23B 17B endowment. That's $21.M $1.5M per student and Yale still charges $35K/year tuition? I guess Yale has to when they spend $245K/year per student. (WTF!)
Posted by: ed   2008-12-18 08:35  

#7  Education bubble bursting in 5, 4, 3, 2, ..........
Couldn't happen to a more deserving bunch. Higher Ed is one of the biggest scams going.
Posted by: Spot   2008-12-18 08:28  

#6  There goes the scholarship and tuition assistance programs for impoverished West Virginian Irish and Scottish coal mining families.
Posted by: Besoeker   2008-12-18 07:26  

#5  Education bubble bursting in 5, 4, 3, 2, ..........
Posted by: no mo uro   2008-12-18 06:08  

#4  mmm. Woulda thought all those yalies in Treasury, the SEC, the Fed Reserve and so forth woulda been looking out for the old alma mater...
Posted by: M. Murcek   2008-12-18 04:20  

#3  My hear goes out to Yale faculty.
Posted by: g(r)omgoru   2008-12-18 03:37  

#2  That's what we did!
Posted by: Bill Clinton Library   2008-12-18 01:16  

#1  Ask the Saudis for more money. We blew 8 tril and we are tapped out.
Posted by: Alaska Paul   2008-12-18 00:57  

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