Strong endowment returns prompt budget boost

Recent strong returns on the Princeton endowment have prompted University trustees to allot $24.8 million in additional funds to needy areas of the operating budget.

The increase in spending will be directed towards a number of areas, including energy and renovation costs, information technology and the University library system.

The spending increase constitutes only the seventh adjustment in endowment spending policy since it was adopted in 1979, according to the University website. The increase, effective for the fiscal year beginning July 1, ensures that the University will maintain its target spending range of between four to five percent of its endowment.

Most of the $24.8 million will not be used to initiate new programs, but will instead cover existing costs. Rising prices in the last few years — especially in the energy and construction sector — have forced the University to tap into its reserves to cover basic expenditures.

"We had items being paid for with capital reserves, and thanks to the performance of the endowment, we can now make those items part of the regular operating budget and replenish those reserves," University spokeswoman Cass Cliatt '96 said.

Though most of the funds have been earmarked for basic expenses, University trustees also decided to channel some of the funds towards enhancing University programs, including information technology and University libraries. The Office of Information Technology (OIT) and the University library system will receive $3.4 million and $1.1 million, respectively.

The additional funding will allow OIT to increase its bandwidth fivefold and eliminate Internet charges, according to the University website. Previously, academic departments at the University had been charged for using Internet services.

The boost in funding will also enable OIT to centralize educational software from various departments and to step up efforts to complete the implementation of a University-wide wireless network, Cliatt said.

The library system will use the $1.1 million to augment its acquisitions budget, enabling the University to purchase more research material such as books, manuscripts and journals. The funds will help close a growing gap in the libraries' budget caused by decades of inflated prices for printed publications, University librarian Karin Trainer said.

Trainer also cited demand for a wider array of research materials as motivating the budget increase.

"We now receive many, many requests for research materials in the electronic form and all of it is very expensive," Trainer said.

"Also, as a result of Princeton's academic vitality, we have faculty and students studying new fields such as neuroscience or finance," she said. "In order to provide these people with the resources they need, we need to buy new materials."

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Cliatt agreed that the increase of the libraries' acquisition budget was necessary.

"One of the most important things to Princeton University is to maintain strong research," Cliatt said. "Part of the funding will allow us to expand our special collections and research materials."