In Swarthmore College’s response (Suzanne Welsh, The Phoenix, March 27, 2014) to my op-ed concerning endowment spending (Peter Collings, The Phoenix, March 20, 2014), the College admits to an intentional endowment spending policy “lower than many other institutions.” The response then goes on to say: “This discipline in the past has served the current generation well and maintains intergenerational equity for the future.”
Clearly the college does not understand the principle of intergenerational equity, namely that the endowment should be used in a way that brings equal resources to each generation of students, faculty and staff. On the contrary, the response states: “A lower spending rate enables higher annual growth in spending in future years …”, which is exactly the opposite of spending equally on each generation. In fact, there’s a sad irony associated with the college’s policy. By spending less of the endowment each year than necessary for conservative financial sustainability, the college does treat each generation equally ….. equally underfunded compared to future generations!
The argument in the response that the cost of delivering a Swarthmore education increases faster than inflation is probably accurate. I also agree that the college should plan conservatively in order to guarantee future generations the same quality of education. With these in mind, the difference between conservative financial planning that adheres to the principle of intergenerational equity and the college’s present endowment spending policy is probably in the 1-2 percent range. That might not seem like much, but it amounts to roughly $15-30 million annually, a sum that would have made a significant difference to every student, faculty member and staff member during the last quarter century had it been spent.
My conclusion is that the college needs to hear from members of the Swarthmore community with a different perspective on endowment spending and intergenerational equity . A discussion of the endowment spending policy is scheduled for a faculty meeting this spring. I call on students, staff and alumni to begin similar discussions, with the goal of forwarding to the college recommendations on endowment spending.
Peter Collings is the Morris L. Clothier Professor of Physics at the college, and serves as the coordinator of Environmental Studies.