Vice President Rob Goldberg Clarifies College’s Endowment and Budget at SGO Weekly Meeting

On Dec. 4, Rob Goldberg, vice president for finance and administration, presented an overview of the college’s budget to the Student Government Organization in an effort to clarify misconceptions about the process. At the meeting, Goldberg spoke about the operating budget, the college’s endowment, and  addressed other questions and concerns. 

Goldberg launched the meeting by introducing his role in the governance structure. He explained that the college’s governance relied on a Board of Managers who compose several committees, such as the Admissions and Financial Aid Committee and the Audit and Risk Management Committee, which then report to the Vice President for Finance and Administration. 

According to Goldberg, the college’s budget for the current fiscal year stands at around $214 million. Using a breakdown of revenue sources, he pointed out that approximately 55% of the revenue came from the college’s endowment. 

Other than the endowment, 37% of the total revenue comes from net student charges, encompassing tuition, food, and housing fees, with the remainder coming from gifts and other miscellaneous sources. 

In terms of expenditure, 56% of the college’s expenses go into staff compensation and salaries, while 24% cover departmental expenses and transfers, which include equipment and supplies. The remaining expenses are non-operating expenditures and a “small contingency,” or emergency reserve. Goldberg defined non-operating expenditures as primarily covering interest on the college’s debts.

After presenting these numbers, Goldberg classified Swarthmore as an “endowment-dependent institution.” 

“There are colleges and universities that are tuition-dependent universities…where most of the revenue comes from tuition charges. Ours comes from the endowment.”

Goldberg then explained what the endowment entailed, emphasizing the longevity of the endowment thus far.

“[The endowment] is a pool of money that is generated through gifts going back to the very beginning of the college – gifts by donors, funds that are allocated by the institution, interest, dividends, capital appreciation, any way we make money and anything that’s excess of spending,” Goldberg explained. “So, the endowment has been around for a long, long time. It was basically seeded with gifts and then over time, it has grown through investments.”

Expanding on this point, Goldberg detailed the various functions performed by the endowment.

“So, first of all, the endowment exists to fund our mission in its totality,” he said. “It enables us to do all the things that we do that makes Swarthmore the great place that it is. It funds need-blind admissions, it funds financial aid, it funds part of our operating budget, it funds all the capital. It really funds all funds on our mission.”

In response to suggestions for the college to utilize its funds to address immediate concerns, Goldberg argued that a feature of endowment reliance is the need to preserve the endowment’s longevity.

“And the important point I want to make is that [the endowment is] what we call a perpetual asset,” Goldberg said. “If I were here ten years ago, I’d be talking to a group of students…benefiting from the endowment from that year. You [now] all are sitting here benefiting from the endowment this year. And ten years from now, students who are going to be sitting here are going to have to benefit from the endowment,” Goldberg explained. “It’s our responsibility as stewards of the endowment to make sure that the endowment is there to support the mission of the college and the students just like it was there ten, twenty, 30 years ago.” 

He continued, “When people say, ‘Why can’t you just use the endowment to pay for this?’ or ‘Why do we have a big amount and why can’t we use it for that?’ – we have to store the endowment so it doesn’t disappear … We have to protect the buying power of the endowment so future students get the same level of benefit as you’re getting.”

With an eye towards ensuring the perpetuity of the endowment, Goldberg relayed that the target range for yearly expenditures laid between 3.5% and 5% of the annual value of the endowment:

“We don’t have carte blanche to spend whatever we want out of the endowment because then we wouldn’t be protecting its value for the future. There are rules that we have to follow. So, we are allowed to spend between three and a half and 5% of the annual value of the endowment.”

Beyond questions about the college’s budgeting process, Goldberg also addressed a few other points throughout the meeting. 

Regarding calculation of salaries and wages for faculty, administrators, and students, Goldberg explained that the calculations are done by the college’s in-house budget office, while noting that faculty and administrator salaries are not benchmarked against market standards.

“We’re not a monolithic institution. So, faculty get paid at a certain rate and administrators get paid at a certain rate and the administrators are benchmarked to sort of the larger market depending on the kinds of jobs, so no lawyer who works for the college is going to be benchmarked against lawyers at work.”

In response to a question regarding the position of Dr. Brooke Vick, inaugural vice president for diversity, equity, and inclusion, in the existing bureaucratic power structure, Goldberg assured the attendees that Dr. Vick would be coequal to the other vice presidents. 

“VP for DEI, Dr. Brooke Vick, is coming in January. She will report directly to President Smith. She will sit in our President’s staff meeting. She’s going to be everything that’s coequal as any other VP. She’ll be my co-equal, she’ll have direct access to the President,” Goldberg said. “She’s going to be a pretty important addition to the senior team.”

Finally, with concerns being raised about certain departments and divisions needing more attention, such as infrastructure issues in the dance department, Goldberg reassured that the issues were being heard and evaluated for prioritization. 

“We work with every division in the college on what their infrastructure priorities are and we have this ginormous list of needs and estimated costs and we have to go through a prioritization. Sometimes, something that was a low priority this year is a high priority next year,”  Goldberg said. 

He concluded by encouraging those with concerns to reach out to him through email.

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