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Frequently Asked Questions

What is the endowment?

The endowment consists of gifts to the Colleges that are invested in a diversified portfolio to provide income to the Colleges in perpetuity. The Colleges draw approximately 5% of the endowment’s value (averaged over three years) to support the operating budget. That percentage is called the endowment draw. For example, if someone gives the Colleges $1M to fund scholarships, that $1M is invested and approximately $50K or 5% is available each year to carry out the donor’s intent.

How is our endowment performing?

Our endowment returns from March 1, 2008 through February 28, 2009 stand at a negative of about 26%.

While we are disheartened by the loss to the endowment, we are pleased that our portfolio outperformed the S&P 500 Index, which lost about 43%.

Are the Colleges financially secure?

Like every institution of higher learning, the Colleges have been affected negatively by the economic downturn; endowment and philanthropy have both decreased. We are fortunate, however, that the Colleges entered this recession from an enhanced position with several years of balanced budgets, a strong balance sheet and a recent Standard and Poor’s “A” rating reaffirming our financial position.

What is the difference between a restricted and unrestricted fund?

Endowment funds are often restricted to a specific purpose by the donor. Other endowment funds are unrestricted and can be used to support a wide variety of needs.

What is an underwater account?

An underwater account is an endowed fund where the market value of the endowment is less than its dollar value at the time the gift was made. New York law prohibits institutions from drawing against endowment accounts that, due to fluctuations in the market, are less than the original donation. President Gearan has been working with fellow college and university presidents across the state to lobby for change in this law, change that would allow the Colleges and other non-profit organizations to prudently tap into restricted funds.

Do we have underwater accounts?

Yes, a number of the Colleges’ endowed funds are underwater. As of the end of February 2009, about $4M of endowment draw cannot be spent. We can and often do elect to spend unrestricted endowment to cover the lost income and are making those adjustments now.

Will there be a tuition increase for the 2009-2010 academic year?

Recognizing the financial strain that families face at this time, the Board has approved a 3.5% tuition increase for the 2009-2010 year, the lowest tuition increase at the Colleges in 44 years.

If students are having problems paying, who can they speak with?

If you learn of a student facing financial challenges, please contact Director of Financial Aid Beth Nepa at extension 3315 so that she can set up an appointment to speak with the student and his or her family. As always, the Deans and the staff at the Counseling Center are ready and available to meet with any student who has concerns.

Will there be a salary increase next year?

As the President has stated previously at the Board Readout and the Faculty Meeting, the possible increase ranges from 0% to 1.7%. The only exception is the previously negotiated salary increase for Union employees.

How many applications for the first-year classes did we receive?

The Colleges received nearly 5,200 applications for admittance to the Classes of 2013, the largest number in our history. Nearly every category by which we measure admissions is up – men, women, international, multicultural and geographic.

What is the target enrollment for the Classes of 2013?

The budget is based on enrolling 575 first year students.

We continue to receive donations to Campaign for the Colleges. Why doesn’t that have an impact on the operating budget?

Most gifts to Campaign for the Colleges are restricted by the donor to fund a particular project and have no immediate impact on the Colleges’ operating budget. This is why it’s so important to support The Fund for Hobart and William Smith; gifts to The Fund for Hobart and William Smith go directly into the operating budget.

Why hasn’t construction begun on the athletics projects or performing arts?

We continue to actively fundraise for athletics and for the performing arts initiative. Given the uncertainties that exist regarding the extent of this economic downturn, in November the Colleges made the decision to pause construction to ensure that funding commitments are more extensive before breaking ground.

What can I do to help?

Every employee can continue to search for ways to find efficiencies in their departments and in their own work. Suggestions for cost cutting measures can be made anonymously via this Web site. Just as importantly, though, is support of The Fund for Hobart and William Smith.