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Budget details available

Scherr and Keller issue report on Dartmouth's finances

Following last year's updates on the state of Dartmouth's budget, Provost Barry Scherr and Executive Vice President for Finance and Administration Adam Keller announced recently that the College ended fiscal year 2004 with a slight surplus.

"We would like to thank everyone who contributed to the successful outcome of the 2004 budget," they wrote in an e-mail announcement to the community.

 "Despite the recent challenges," Keller said, "our cost-containment measures have helped us emerge from the past few difficult years in a strong position."

"Despite the recent challenges, our cost-containment measures have helped us emerge from the past few difficult years in a strong position." - Adam Keller

He added that the College's financial managers will need to continue working with faculty members, administrators and students to ensure that expenses are focused in ways that help Dartmouth realize its strategic priorities.

 "We have been guided by the College's overarching goal - to offer the leading learning experience in the nation," wrote Scherr and Keller in their message. "We will continue to assign priority funding to the core programs President Wright has consistently championed as summarized in his Five-Year Report. These priorities include our ongoing commitments to supporting need-blind admissions and financial aid; recruiting and retaining leading faculty members committed to teaching and scholarship; offering a rich student experience outside the classroom, the laboratory, and the studio; and moving forward ... on academic, residential, dining and social facilities we need in order to maintain and enhance Dartmouth's competitive strength."

The complete text of the message, along with detailed information on Dartmouth's budget, can be found at the Dartmouth News website.

 "We want the community to see and understand what goes into Dartmouth's complex budget picture," Keller said. "Posting this information online gives us the opportunity to provide the information in a variety of ways and also to include some analysis of what the figures mean." 

Keller explained how the College worked to meet the financial challenges of recent years.

"We tightened our budget belts," he said, "and we worked with faculty, staff and students across the campus to reallocate resources. Our strategy was to continue to make progress on our priorities, even though the economic climate wasn't favorable."

Dartmouth's financial well-being is influenced by a host of factors, Keller said. Some expenses can be controlled by the College while others are externally driven, like the cost of fuel and foreign exchange rates that bear directly on the cost of operating international programs.

"What's required is a nuanced understanding of these forces," he said, "and a management strategy that's flexible enough to adapt."

Management of existing resources through prudent endowment investment and distribution strategies, reorganization of administrative services, and phased timing of capital projects are tools the College used to weather recent budget challenges.

"When you combine those strategies with the extraordinary generosity of alumni and friends this year, our faculty's success in sponsored research and a better economic picture overall, you begin to see how the forces work together," Keller said.

In their note to the community, Scherr and Keller detailed progress over the past year on a number of significant initiatives, including The Dartmouth Center for the Advancement of Learning, the Writing Center, a new academic advising program, increased faculty compensation within the Arts and Sciences, and expansion of the Sudikoff Center for Computational Science. They also noted important projects moving forward in the professional schools. The Thayer School has begun construction on the MacLean Engineering Sciences Center. At Tuck plans are proceeding for an additional residence hall, and Dartmouth Medical School is exploring new facilities projects in Hanover and on the Dartmouth-Hitchcock Medical Center campus.

Scherr and Keller acknowledged the contributions of the community to Dartmouth's successful budget process. "We know that it took a great deal of hard work and a clear commitment to the priorities of the College," they wrote. "We will continue to seek your guidance in the coming months as we develop the fiscal year 2006 budget and address the financial challenges ahead."

"Dartmouth has endured for over 230 years because it has been disciplined in its focus," Keller added. That focus may have evolved with the times, but the discipline remains. To stay strong, the College has to continually ensure that its resources are marshaled to support the strategic priorities that advance its distinctive mission. "If we keep our eyes on that goal," Keller said, "Dartmouth will do more than endure. It will flourish."

HIGHLIGHTS OF THE FISCAL YEAR 2004 BUDGET

• Total institutional operating revenues for fiscal year 2004 (including the professional schools) were $568 million. This includes an 11 percent increase in externally funded sponsored research projects, approximately 70 percent of which are at Dartmouth Medical School.
• Total institutional operating expenses, were $567 million. Excluding direct sponsored research activities, operating expenses totaled $441 million, an increase of slightly more than 5 percent over fiscal year 2003.
• The College-only budget finished with a surplus of $5.9 million. This surplus will be used to cover portions of upcoming facilities projects, including construction inflation on the Kemeny Hall and Haldeman Center buildings and renovation of fitness facilities in Alumni Gymnasium.
• The College currently operates with a multi-year institution-wide capital budget totaling $263.2 million, about $84 million of which will be spent during the current fiscal year.
• The generosity of alumni and friends was evident as Dartmouth celebrated its most successful fund-raising year ever, with $118.1 million in charitable gifts, nearly one-third more than we received in 2003. The Dartmouth College Fund exceeded expectations by $6 million, for a total of $31.45 million. A total of 35,845 alumni, parents, friends, foundations and corporations gave to the College.
• The endowment's market value increased by $333.1 million to $2.45 billion after a very strong 18.6 percent return.
• Sponsored research expenses increased by 10.9 percent to $126.4 million, while new awards, many of which will be spent in future years, increased by 23.8 percent from $165.1 million in fiscal year 2003 to $205.5 million in fiscal year 2004.
• Nondiscretionary costs - energy prices, foreign exchange rates, and insurance rates, among others - continued to rise more quickly than the rest of the budget.
• Dartmouth Medical School finished the year on target with continued success in the recruitment of excellent faculty members and a record number of peer-reviewed, competitively funded grants and contracts.
• The Thayer School of Engineering ended the year $1.9 million ahead of budget as a result of increased graduate enrollment, increased sponsored research activity and lower compensation costs resulting from faculty and staff vacancies.
• The Tuck School of Business finished substantially ahead of budget with a $1 million surplus because of record levels of annual giving and successful cost containment efforts.
• The fiscal year 2005 budget is in balance, and we expect to finish the year on target.

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