The project is about anticipating the challenges that lie ahead, says President Hanlon.
Dartmouth is beginning work on a project to ensure the institution has a solid financial footing in the coming decades, President Philip J. Hanlon '77 announced today at the fall meeting of the general faculty.
President Hanlon said the Dartmouth Budget Project will investigate ways to generate new revenue and examine the cost of operating the College.
It's "a call to action, an opportunity," he told faculty members from all of Dartmouth's schools at the meeting in the Hanover Inn ballroom. "The Dartmouth Budget Project is about anticipating the challenges ahead and acting proactively. It's not reacting to a crisis. I'm confident that if we stay focused on the challenges ahead, we will take the steps necessary to keep us financially strong and with the resources we need to invest in the excellence and in the quality of our academic program."
Hanlon said Dartmouth is currently financially stable and has enjoyed surpluses in recent years. This comes after budget modeling at the start of his tenure had projected growing deficits that would reach $36 million by fiscal year 2019.
"We've achieved this by taking a series of proactive steps to lower costs and increase revenue while introducing greater rigor into our institution's financial practices across the board," he said.
Dartmouth has the luxury to be able to look far into the future and make plans now, before facing a national economic downturn, a large unplanned institutional expenditure or some other unknown cost. The College's revenue sources are unlikely to increase significantly, and could decrease, depending on outside economic forces. Funding—for Dartmouth and its peers—comes from tuition, federally sponsored research grants, philanthropy, and a distribution of funds from the endowment. However, unlike its peers, the College has several expensive costs ahead—the need to revamp the institution's energy systems and much-needed work to address a considerable amount of deferred building maintenance.
Hanlon said future projections, based on costs, revenue, and inflation, with new costs that are not now part of the current year's budget added in, show Dartmouth running a deficit of $72 million 10 years from now. While a deficit of that amount would be a small portion of the College's total budget, estimated to be in excess of $1.3 billion in 2030, it is nonetheless a serious challenge, he said.
That's where the budget project comes in. Hanlon is charging those involved in the budget study to come up with ideas for new revenue and rethink the cost of running the College. The project will reach out to faculty, including tapping the expertise of Budget Committee members, and also to staff, students, and alumni. The study is scheduled to run through the summer of 2020.
The project will be led by three teams, each with a different focus. Track one of the project, identifying new revenue opportunities, will be led by Thayer School of Engineering Dean Alexis Abramson, Senior Vice President of Advancement Bob Lasher '88, and Tuck School of Business Dean Matthew Slaughter.
Track two, looking at the cost of running the college, will be led by Dean of the College Kathryn Lively and Executive Vice President Rick Mills.
Track three is charged with communicating with the Dartmouth community about the project. This group will be led by Vice President for Communications Justin Anderson, Geisel School of Medicine Dean Duane Compton, Guarini School of Graduate and Advanced Studies Dean F. Jon Kull '88, and Dean of the Faculty of Arts and Sciences Elizabeth Smith.
A website will be available soon to provide information about the project and let community members know how they can get involved in the effort.
"We need all of your wisdom and ideas as we explore the actions we might take and the opportunities we might pursue that would be a good fit for our campus," Hanlon said.
Susan J. Boutwell can be reached at [email protected].