English Professor Don Foster recently published two op-eds in Boilerplate discussing the College’s financial situation. His most recent article refers to our college’s recent endowment decline as a “budget-busting collapse” and suggests that students should “clutch their chests and hyperventilate.”
I do not intend to write this exclusively as a response to Professor Foster’s article. In fact, I hold great admiration and appreciation for his interest in fostering a dialogue driven from the mindset of long-term success for our institution. Instead, I’m interested in pointing out an underlying trend I’ve seen constantly when students, faculty and alumnae/i discuss our college’s financial state. It’s a trend driven by exaggeration and sensationalism that deserves awareness so we can realize what harm can come from it.
With this in mind, I do want to make a few clarifying points related to his op-ed. First, Professor Foster is incorrect to state, “Last year many investments did just fine: fossil fuels were the only sector that suffered significant market losses.” Most financial investments, not just Vassar’s, saw flat or declining performance in the 12 months between June 2015 and June 2016, which is the period covered in Vassar’s latest financial results. The S&P 500, an index of the 500 largest companies, declined 3.05 percent. The technology-heavy NASDAQ Composite Index declined 3.4 percent in the same period. For comparison, the S&P 500 Energy Index declined 3.4 percent (Google Finance).
Now, onto Vassar. The overall endowment decline ending in June 2016 was indeed 5.5 percent. However, only 1.7 percent of this decline was driven by market performance. That’s right: Vassar beat the market last year. What generated the most significant decline was our endowment spending. This is, to an extent, intentional: An endowment is designed to be spent to support a college’s functions, no matter how the market performs (“Vassar College Financial Statements”, KPMG).
At a glance, a 5.5 percent decline is significant. It’s also the first decline in our endowment since the 2007-08 Recession. But when you look at the big picture, it’s nothing to hyperventilate about, because this happened to almost all other colleges and universities with large endowments. Professor Foster suggests we could have invested more wisely, but if that’s the case, then someone should tell Harvard. Sure, we lost $55 million, but they lost a whopping $1.9 billion, twice our college’s entire endowment! This number is not very meaningful without knowing it as a percentage of Harvard’s overall endowment. That number is 5.3 percent, not far off from our own endowment value decline. Swarthmore lost 5.4 percent. Williams declined 5.8 percent. If we’re on a financial highway to hell as Professor Foster insinuates, then we’re in good company (“America’s richest universities — including Washington University — see their endowments stumble” (St Louis Business Journal).
This isn’t the first time (nor I doubt the last) I’ve seen strongly worded rhetoric appear in the Vassarsphere discussing our finances. After four years on Vassar’s campus, countless VSA meetings, and two terms on the Committee on Admissions and Financial Aid, Professor Foster’s op-ed is just one of many recent examples in dialogue I’ve seen contain concerning rhetoric that frames our school’s endowment and giving performance as dire.
I think we ought to talk about our endowments more. We ought to discuss publicly the morals and ethics of investing and how we should work toward an endowment that reflects our own institution’s values. We ought to ask our community of 40,000-plus worldwide why they do or don’t donate, and how Vassar’s mission should reflect their own. But we can’t let this be weakened by the invalidating nature of hyperbolic dialogue that I’ve seen far too many times to count at Vassar. It may generate more interest and in turn more shares on Facebook, but this activity ultimately produces a less meaningful and effective dialogue while adding unnecessary anxiety to the campus.
Unless things have changed dramatically since my last committee meeting in May, I’m fairly confident that Vassar is not on the brink of its extinction. Additionally, this committee of administrators, faculty and students acknowledged and supported the VSA’s recent resolution stating the importance of need-blind admissions last spring. That said, I don’t want to take away from Professor Foster’s valid points. The College does have much higher spending on administrative offices and buildings and grounds compared to many of the 21 schools we self-identify as part of our peer group. We do spend far less on instruction resources than our peers. We have practically doubled our debt to fund a new science building project while many other departments continue to express a sense of academic stagnation. Our giving is down compared to our aggressive sesquicentennial campaign just a few years ago in conjunction with a tumultuous campus climate.
But these facts should not be interlaced with simplified analogies to somehow compare endowment performance to free cars and incoming financial catastrophe. Doing this doesn’t just falsely construe that rich families measure Vassar’s value by the size of its endowment, but it also plants the idea that Vassar isn’t a valuable institution to attend, and that this is in part due to how we focus far more of our budget on financial aid and programs like Posse than other institutions.
It, broadly speaking, implies that students who see Vassar as accessible through these programs are reducing Vassar’s inherent value by leading us to put more into financial aid and less into areas like instruction. Financial aid is, after all, a much bigger budget outlier than administrative spending compared to our peers.
It also ignores what we’ve gained from such a commitment in the last decade. According to a report by the New York Times, Vassar is fifth among elite schools that enroll the most low- and middle-income students. We’re ahead of Harvard, Yale and all but one of our entire peer group. Ask an admissions officer at Vassar or elsewhere; this effort is not the byproduct of overnight investment.
A school doesn’t just snap its fingers and suddenly become accessible, even if it has forty times larger an endowment than ours (like Harvard, for instance). Making a financial commitment is part of this, but it’s also the byproduct of a decade-long and continuing effort by the college to focus on those who’d otherwise not know of Vassar, or imagine Vassar as an accessible and affordable institution. Myself included. That is just as much President Hill’s legacy as are the other, problematic elements.
I also caution trying to simplify Vassar’s overall educational experience for a student as something that can prescribed to a dollar value. There is a cost to attend, but I don’t think it’s calculated by what Vassar is “worth,” as every student, including those that receive no financial aid, benefits from our endowed funds. An endowment is designed to support Vassar’s mission statement, not to be a big number to point at.
Our endowment has indeed not grown as much as some of our peers in the years since 2007-08, but we cannot argue that difference without also acknowledging what is subsequently different about our campus, both good and bad.
I hope Professor Foster continues to write on this topic, just as I’ll encourage interested students, faculty and alumnae/i to make their voices heard on this topic.
I also hope he and the rest of the Vassar community consider more broadly the facts at hand, as well as the power of our words in the continuing dialogue about Vassar and its financial priorities, institutional values and other topics in the years ahead.