Since before the birth of the American republic, Dartmouth has stood as an institution characterized by innovation, strong leadership, an ability to adapt, and a resolute sense of purpose. Over the last 240 years we have gracefully balanced the best of our traditions and values with a need to remain relevant in a changing world. Careful planning and management of our resources is essential to our ability to be responsive.
Dartmouth has benefited tremendously from its strong financial base in the last decade. The endowment has grown from $1.5 billion in 1998 to $3.66 billion as of September 2008. In the same time period, gifts to the Dartmouth College Fund, which supports the annual operating costs of almost every area of the College, have gone from $16 million to $42 million. Drawing on increased endowment returns and gifts to the Campaign, we have addressed long deferred needs and invested in new programs and initiatives.
As I write now, it is clear we are experiencing a significant international economic downturn, most likely an extended one. In November 2008, I met with the Board of Trustees and shared the sobering picture that revenue is down considerably because of declining endowment performance. In order to bring the College-only budget into balance, we will need to adjust projected expenses by up to ten percent, or approximately $40 million, over the next two fiscal years.
This challenge also presents an opportunity to clarify our priorities in concert with our values. The Board agrees that we need to protect financial aid, our academic strengths—of which the core is the tenure-track faculty and our overall educational environment—and we need to do all we can to support Dartmouth’s employees. We will look to identify adjustments that are sustainable rather than temporary, and we anticipate making specific reductions that reflect our institutional priorities. I am working closely with Provost Barry Scherr and Executive Vice President Adam Keller, co-chairs of the Budget Committee; with student and faculty committees; and with other members of the faculty and administration to identify ways to reduce expenses while maintaining our focus on the work of faculty and students.