University expects financial stability despite lower endowment returns

The endowment grew 5.6 percent in the last fiscal year, compared to 24.7 percent the year before. Still, Eisgruber said, “last year’s performance was within the boundaries we expect.”

Even with “the current circumstances, people should recognize that Princeton is a steady ship budgetarily,” he noted.

“We anticipate [that there will be] some years that are very good, and some that are very bad,” he said, adding that the University is “well-equipped” to react to both circumstances.

Eisgruber said that Princeton has not made any major “short-term adjustments” that other universities might need to undertake as a result of the economy.

He noted that there should be “no plans for an immediate change in the operating budget, but we are continuing to monitor the situation, and we may have to adjust timing and scope for capital projects.”

McDonald explained that about 45 percent of gifts to the University contribute to the endowment and are managed by the Princeton University Investment Company. The other 55 percent goes toward the operating budget and current use and support for construction and renovation, he said.

Eisgruber noted that the numbers released Monday reflected the last fiscal year, which ended in June, and do not reflect the impact of more recent problems in the economy.

McDonald said that “if this [economic] condition persists for many years, we will need to think about what it means [for the school’s money],” adding that this concern is the same one that many businesses and individuals are currently facing all over the United States.

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Eisgruber said the University “anticipates seeing a greater need for financial aid,” adding that “the University can step up and meet that [need].” This means that the “net tuition will decrease, because financial aid will increase,” he explained.

In an interview with The Daily Princetonian last month, Director of Undergraduate Financial Aid Robin Moscato said that though there is a greater demand for financial aid this year, “the University has a remarkable commitment to meeting the full need of every student who applies for and needs financial aid … We’re committed to meeting this additional demand.”

Donation pace expected to slow

Though the economy is impacting donors’ decisions to give to Princeton, McDonald said that the University’s $1.75 billion Aspire capital campaign will continue to function as planned.

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The Aspire campaign had amassed a total of $925 million as of Monday, up from $842 million at the end of 2007-08 fiscal year in June, McDonald said in an e-mail.

McDonald said that there is “absolutely no plan to change the timeframe” of the campaign, which is slated to end in 2012. He added that Aspire’s designers aimed for a “realistic total,” and that in coming up with the program, they did not expect the economy to “be sunny all five years.”

“The economy is a very serious matter, [but] this has been a very strong start,” McDonald said. “For three years, we have been racing forward. It’s been my expectation that we will keep moving forward” though the pace of incoming donations may be slower.

McDonald said that donors are taking a longer time to examine their own economic situation before committing to donations.

Still, “a couple of gifts [are] in the works that I think will be announced,” McDonald noted. Some of these announcements will be related to “one or more of the dormitories of the new Butler.” The discussions about funding the Butler renovation have taken several years, he added.

McDonald said he remains optimistic as the gifts keep coming, noting that development will positively continue “if this [downturn] is just for one or two years.”