[Overview: This message summarizes the budget presentation that was made at the Joint Board of Permanent Officers (JBPO) meeting on Thursday, April 16.]
Thank you to those who were able to join the JBPO meeting on April 16 where I provided an overview of the FAS budgetary situation. Attached are the slides from the presentation; a summary follows.
The FAS budget over the upcoming years will be smaller than we had planned; our decisions about how to use it should be guided by our academic commitments. While next year’s adjustments will be modest, over the medium and longer term they will need to be more substantial as the full effects of COVID-19 are reflected in our finances. Fortunately, we have time to think together about the principles that should guide that decision-making.
Additional budget details
In the near future, we expect all three sources of income that support the $800+ million budget of the FAS – endowment (~60%), tuition (~25%), and grants and contracts (~15%) [slide 1] – to decrease, due to the global consequences of COVID-19. In addition, since our long-term planning includes an assumption of a growing endowment, this year’s decline means that the expenses already allocated for next year [slide 2] will require us to take money from principal. Compounding these challenges of revenue loss are the tens of millions of dollars in unanticipated COVID-19 expenses incurred this spring. [Slide 3 illustrates the long-term consequences of a dip in the endowment. Additional details about the FAS and university budget can be found here.]
Decisions and next steps
Although we are fortunate to be in a relatively strong financial position, we still need to adjust our plans to meet this challenge. To start, we will hold a portion of this year’s budget to cover the spring’s unanticipated costs and provide a reserve for future needs. In the FAS, this will come from two sources: a salary freeze and hiring pause for faculty and staff; and a request that each individual department make a 5% reduction to their (non-salary) budget. [Additional details about university planning can be found in President Salovey’s afternoon message.]
In the longer term, as we absorb the full economic consequences of COVID-19, we will need to develop principles to govern our choices. Most fundamentally, we remain committed to excellence in research and teaching in an ethical and diverse community. But within the boundaries of that core value, practical questions will remain. We will need to work together to address them. As the body “entrusted with matters relating to the educational policy and government” of the FAS (Yale By-Laws, §30), the JBPO will play a central role in these discussions.
None of this is what we hoped for; none of this is what we planned for; none of this is what we signed up for. But it gives us the chance to distill what we care most about and commit ourselves to its disciplined pursuit. Such is the work that we must undertake. I can think of no group of colleagues alongside whom I would rather do this.
Tamar Szabó Gendler
Dean, Faculty of Arts and Sciences
Vincent J. Scully Professor of Philosophy
Professor of Psychology and Cognitive Science