HARVARD GAZETTE ARCHIVES

Harvard Greatly Increases Payout From Endowment

Harvard University announced today that the income available from its endowment to all units of the University would increase dramatically for the fiscal year 1999-2000. The income distributed from Harvard's endowment will grow by at least 20 percent, to about $500 million. Future increases will build on this new base.

"This decision represents a major new investment in the future of Harvard," said President Neil L. Rudenstine. "Carrying out university programs at the highest possible level of quality has never required more substantial resources. Fortunately, our University Campaign has so far gone remarkably well, and our endowment has benefited over the past five years not only from exceptionally strong markets, but also from the extraordinary performance of our investment managers.

Faculty of Arts and Sciences income sources, fiscal year 1997. Tuition and fees now represent just 34 percent of Harvard's income.

"We are now in a position to move forward even more energetically in a number of key areas," Rudenstine added. "We want to enhance the financial aid available to our students, and make certain that we can continue to recruit and retain the most outstanding faculty. We need to invest selectively yet ambitiously in emerging fields, including rapidly changing scientific domains, as well as fields with strong interdisciplinary and international dimensions. And we aim to explore more fully how modern information technologies can enhance the quality of learning, while we also secure the future of our libraries and other key facilities."

The increase in endowment distribution will have broad-based effects. Beneficiaries will include the many programs and activities across Harvard that are supported by restricted endowment gifts received over Harvard's long history.

All undergraduate scholarship holders 1997-1998. Families from across the economic spectrum qualify for Harvard's need-based scholarships. Harvard College provides more than 93 cents out of every scholarship dollar received by undergraduates. More than 70 percent of undergraduates receive some form of financial aid. This year, Harvard will award scholarships from its own funds to more than 47 percent of undergraduates for a total of $53 million in aid.

The increase is expected to provide especially strong support for a number of priorities of broad importance across Harvard's nine Faculties. For example:

• Support a significantly improved need-based financial aid program in Harvard College. Harvard College is one of the few private institutions that can still offer admission to all its students without regard for their ability to pay, while guaranteeing admitted students the financial aid they need. On average, as announced earlier this fall, undergraduates on aid will receive approximately 20 percent more in scholarship help, with a corresponding decrease in loan and job expectations.
• Improve significantly the fellowship support available to students in the Graduate School of Arts and Sciences, and provide increased aid for students in various professional schools. "Such institutional support is exceptionally important," Rudenstine noted, "because historically, there have been few external sources of financial help for students studying at advanced levels."
• Ensure that the rapid and important developments in modern information technologies can be used effectively in strengthening research and teaching, as well as administrative efficiency, throughout the University.
• Preserve Harvard's traditional library collections while also adapting the library system to the unfolding digital area. The University Library¹s "digital initiative" will receive the essential technological infrastructure that will enable all parts of the University to coordinate the purchase of digital materials, and provide ready access to these materials by students and faculty in every School or unit of Harvard. Harvard's is the largest university library in the world, but its collections are threatened by decay. There is immediate need for costly environmental controls as well as an ongoing effort to conserve these materials by digitization and other means. At the same time, information is now being transmitted electronically, not always on the printed page, and has to be preserved. Both of these costly initiatives will be helped by these funds.
• Allow the University to create more effective academic structures and incentives to enhance cross-disciplinary and cross-School cooperation in critical fields that benefit from a multidisciplinary approach. This need is important in the sciences, in international studies, in many professional-school fields, and in other areas. The University has seen much growth of interest in cross-disciplinary work but the traditional pattern of distributing resources has made it difficult to find ways to support this interest.
• Make certain that, as costs in the sciences continue to rise, there are sufficient funds to upgrade equipment, undertake necessary laboratory renovations, and provide support for scientists - to name only a few needs. According to Dean of the Faculty of Arts and Sciences Jeremy R. Knowles, "Even with good levels of federal and corporate research support, universities face a range of science-related expenditures that are very substantial, and are inescapable if the best teaching and research is to be done."
• Continue to invest in programs that improve the quality of classroom education in a number of ways. The funding will improve the educational experience of Harvard students by recruiting new faculty in emerging fields and in areas of strong student interest and concern. New faculty will ensure that students have an even broader range of course offerings and opportunities for research. The target size for undergraduate "sections" in large courses, for example, has recently been reduced from 20 to 18. More undergraduate seminars and redesigned tutorial programs have been introduced in several Arts and Sciences departments. Programs at the Bok Center for Teaching and Learning have been steadily strengthened, and the Center now serves an increasing number of faculty.

"This growth has been extremely important to the University's ability to maintain the quality of its programs, while also helping students and families with regard to financial aid and fees," Rudenstine said. "At the same time," he cautioned, "an endowment base of even 26 percent still leaves a substantial amount to be raised each year in order for the University to meet its current operating budget of approximately $1.7 billion."