Roughly 150 take University’s offer of retirement

Of the 460 eligible employees, 145 participated in the program, which was designed to cut costs as the University works to slash its budget by $88 million this year and $82 million next year.

Most will retire on October 16, while some will stay on until June 30.

“We are pleased to have been able to offer this program, which was well received and appreciated by the members of our staff who elected to take advantage of it,” Vice President for Human Resources Lianne Sullivan-Crowley said in a statement. “While it is too early to tell the exact economic impact, the program will make a significant contribution to our cost savings targets.”

Administrators said earlier this summer they hoped to save $22 million in personnel costs, mainly through the retirement program and a vacancy management program. The latter effort has already saved the University roughly $11 million.

The University established the program after learning that several employees who had planned on retiring were going to continue working because of the economic downturn. Employees who wish to take advantage of the new program must be at least 55 years old, and their age, combined with their years of credited service, must add up to at least 80.

Eligible employees with more than 20 years of service were offered a year’s salary — paid in a lump sump — to retire. Those with fewer than 20 years of service received a slightly different package.

Administrators will now analyze the vacancies created by the retirements and decide which of those positions to fill. Officials projected earlier this year that they would only fill 60 percent of those positions.

University spokeswoman Cass Cliatt ’96 said in June that the University expected only a “mere percentage of those eligible” to participate.

The retirement program was announced by administrators in a June 11 e-mail to University staff. Retirement incentive programs, or what have been called “buyouts,” have been offered at several peer institutions. At Harvard, 531 staff members participated in such a program, while 423 staff members at Cornell and roughly 80 at Dartmouth took offers as well.

And unlike many of its peer institutions, Princeton has not yet instituted a hiring freeze or announced major layoffs.

Endowment projections revised

The university estimates its endowment has lost closer to 25 percent of its value than the 30 percent previously projected, President Tilghman said in an interview on July 9.

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Tilghman said at the time that officials wouldn’t have exact figures for the endowment — valued at $16.3 billion on June 30, 2008 — until this month. She added that they are budgeting for the value of the endowment to stay roughly the same over the next 12 months, but noted that “we could be surprised in either direction.”

On Jan. 8, Tilghman announced that the University was planning for a 25 percent decrease in the value of the endowment by the end of the fiscal year on June 30. On April 7, the University announced revised projections that its endowment would fall 30 percent.

The new estimate — which would place the endowment at $12.2 billion as of June 30 — would mean the value of Princeton’s endowment dropped less than the only three university endowments with higher values as of June 2008.

Harvard announced on Sept. 10 that Harvard’s invested endowment assets took a 27.3 percent hit this past fiscal year, dropping from almost $37 billion to $26 billion. Yale announced the next day that the value of its endowment also fell 30 percent, from $22.9 billion to $16 billion. Stanford’s endowment saw a 30 percent drop — from $17 billion to $12 billion — according to the San Francisco Chronicle.

Annual Giving comes up well short of goal

July’s news on the endowment came two days after a July 7 announcement that Annual Giving raised $44.6 million in its 2008-09 campaign, more than $11 million shy of its goal. Tilghman called the fundraising drive a “remarkable achievement” given the current economic downturn.

Tilghman said the campaign’s $56 million goal was set in July 2008, before the downturn worsened.

“If you can bring your mind all the way back to last July — it was prior to the recession really hitting,” she said. “We have always been very ambitious. Last year, we raised $54 million, and we thought we should stretch ourselves and set an ambitious goal.”

The 2007-08 Annual Giving campaign raked in $54.1 million from 59.2 percent of alumni, while the 2006-07 campaign brought in $49 million with 58.5 percent of alumni participating. The 2005-06 drive raised $40.4 million from 58.2 percent of alumni.

Participation was high among the most recent classes of graduates. Of those who graduated in June, 90.7 percent pledged to support Annual Giving for the next four years. The Class of 2008 recorded 75.2 percent participation — the highest figure ever for a first Reunion. The Class of 2007 saw 73.7 participation, a record for the second Reunion.

“What it does is set in motion an expectation among our youngest alumni that one of the things you do every year is to give something to Annual Giving,” Tilghman explained. “We understand full well that the amount they’re going to give is going to be very, very modest compared to other classes. Getting in the habit of giving to Princeton will pay huge dividends in the years to come.”

University officials were mindful of the economic climate when planning Annual Giving’s contribution to the current operating budget, Tilghman noted.

“We understood that it would not make sense to plug a number like $56 million into the Annual Giving place, so we accounted for a year in which we would not meet our public goal,” she said. “The fact that we didn’t meet the goal won’t result in further cuts.”

She added that development officials are “definitely going to take this year’s experience into account” when they set the goal for the 2009-10 Annual Giving campaign.

Tilghman also said the University will have to “work harder” in its fundraising efforts given the prevailing economic downturn.

“The case is an extra compelling one when we tell our parents that the financial aid budget is the only part of our budget that we will raise this year,” she explained. “We now give out more financial aid than we will take in [from] tuition.”