09-10 Financial Report

Between President Morty Schapiro’s departure for Northwestern in July 2009 and President Adam Falk’s arrival in April 2010, the College’s senior staff—led by acting president Bill Wagner in close cooperation with the trustees—steered Williams through a strategic and successful response to tough financial conditions.

Two years ago, when the endowment stood at $1.9 billion, the College had planned to spend $94 million in endowment earnings. Last year, as the endowment recovered from a low of $1.1 billion in January 2010 to $1.5 billion in June 2010, Williams used only $64 million in endowment earnings. A full 60 percent of that reduction in endowment use was met through spending cuts ranging from a staff-and-faculty early retirement program to the temporary suspension of the new Sawyer library (more below). The other 40 percent in reduced endowment spending was achieved through additional revenues, including sustained giving from alumni and parents.

As a result—and in contrast with many American colleges and universities—Williams had no layoffs, avoided borrowing to meet cash requirements, preserved all essential elements of our students’ educational experience, and increased financial aid spending to meet the rising needs of families in tough economic times. More details on the College’s budgetary response can be found on the Provost’s website.

Last year showed strong investment returns as well. Having dipped 18.42 percent in 2008-2009 (when the broad US equity market dipped more than 26 percent), the Williams investment pool returned 11.9 percent in 2009-2010. With discipline and patience, the Investment Committee of the College’s Board of Trustees, its Investment Advisory Committees, and the Investment Office managed assets to seek long-term growth while maintaining uninterrupted availability of funding for the College. (A third of Williams’ endowment portfolio can be liquidated in 30 days if necessary.) More details on Williams’ investment performance, policies, and management structure can be found in the 2010 Williams College Investment Report.

Bottom line (and barring another serious economic downturn): Williams is where it needs to be in order to move forward carefully and wisely. A bright beacon of growing confidence—thanks to extraordinarily generous new gift commitments—is that the new Sawyer Library is scheduled to break ground this spring with the aim of opening to students and professors in the fall of 2014.