As Brown's budget guru and planner extraordinaire, Beppie Huidekoper runs a tight ship. Her desk is covered with memos and documents, her schedule a solid block of appointments. But despite her chronic optimism, the aftermath of the recent financial crisis has proved a challenge to even this most seasoned of administrators.
The office of the executive vice president for finance and administration, in the northwest corner of University Hall, is a clearinghouse for everything regarding the University's response to the financial crisis. Brown is "always adjusting" long-term financial projections, Huidekoper says, but the last three years have been turbulent to say the least.
Between July 1, 2008 and June 30, 2009, the University's endowment lost $740 million, falling nearly 25 percent to about $2 billion. Administrators soon reduced anticipated future spending by around $95 million for the five-year period ending in 2014. Still strapped for revenue to meet this year's budget, they elected to draw from the endowment at an unsustainable 6.5 percent.
The $95 million in reductions was divided roughly into thirds — $35 million was immediately trimmed from the budget for the 2010 fiscal year, and about $30 million was excised from anticipated spending for the following 12 months. The University will soon determine the time and depth of cuts for the remaining $30 million in projected reductions. Budgets will depend on the endowment's return, market conditions, fundraising success and other factors.
Students, faculty and staff participated in a comprehensive review of spending this year, looking for areas that could be streamlined or cut. Many employees — 139 of them — will take advantage of a new early retirement program, and most of their positions will remain unfilled. The University also endured two rounds of layoffs — 30 staff were laid off last spring, and 60 additional positions have been eliminated this year. There will be less funding allocated for travel and food. Dining Halls will change their offerings, shorten their hours.
But administrators — perhaps buoyed by the economy's strong performance of late — remain confident that initial doomsday projections will continue to soften. Market returns, sponsored government research funding and fundraising have been stronger than expected, according to Huidekoper. By June 30, after the University has used up about $130 million in endowment funds as part of this year's budget, the endowment is still expected to return to about $2.1 billion.
Under the guiding hand of President Ruth Simmons, administrators have attempted to stick to the University's core values while responding to fiscal constraints. Financial aid funding, for example, has actually increased.
"A budget is a budget. An endowment is an endowment," Simmons said in September. "But there is also something called a mission of a University."
