Good afternoon everyone and welcome to our 25th Community Conversation addressing planning, response, and operations in the time of COVID-19. I’m Joe Helble, the provost of Dartmouth College joining you from the Starr Instructional Studio in Berry Library on a warm, Wednesday afternoon, March 31, 2021.
I’m joined as always by Justin Anderson, our vice president for communications from another studio on campus. Justin and I are joined today by the two senior leaders of our institution—Phil Hanlon, a member of the Dartmouth Class of 1977, a professor of mathematics, and since June 2013, the 18th president of Dartmouth College, and also by Laurel J. Richie, a member of the Dartmouth Class of 1981, a leadership consultant with Merryck & Co., and since June 2017, the chair of Dartmouth’s Board of Trustees. We’ll follow a regular format today with a brief campus update, live Q&A moderated by Justin, a conversation with President Hanlon and Chair Richie, about the past year, and then building from that, where we are heading in the upcoming year, and then ending with an opportunity for them to answer your questions directly.
Today, I’ll provide our regular update on testing case counts, provide a few vaccination updates, and then end with some news and updates on spring term, which got underway for most of the campus this week, including some additional details related to plans for commencement.
Two weeks ago, when we last gathered, we were about to head into a brief spring break for much of the campus. I reported at that time that we had seen a decrease in positive tests over the prior week. And at that time, we had conducted nearly 149,000 tests with an overall positivity of 0.2%. Over the past two weeks, as we approached and then began spring term for our undergraduate students and as testing returned to Leverone Field House, we have conducted an additional 16,000 tests, and had 43 positives in that period for a positivity of 0.27%, leaving our overall positivity since the July 2020—beginning of testing—at 0.22%.
I just want to pause and note the impressive magnitude of the testing operation that’s been underway since July of last summer and thank all of those who’ve been involved in making this possible. For those of you who may remember some of our earlier conversations and Community Conversations last summer, we were in the early stages of putting in place a comprehensive surveillance testing plan at a time when much of the public health debate centered around the question of whether or not surveillance testing could be helpful in protecting and supporting community health.
I think from Dartmouth’s perspective it’s clear that the comprehensive testing regime that’s been in place since last summer has done a tremendous job in helping us support and protect the health and safety of our community, then I’ll say again I’m extraordinarily proud of how well it’s been conducted by and large, and in the remarkably low positivity rate, we’ve remained at since that time. Now we have seen a slight increase over the past two weeks and this slight increase over this two-week period is reflective of the transition that we saw at the start of winter term earlier this year but based on trends the past two days we anticipate that we will see a similar return to very low positivity values over the next several days.
Now we all know that past is not prologue—that past performance is not a guarantee. We saw late in winter term what happens if we are not careful, even for a moment. So again, I will remind all members of our community that we need you to stay masked, stay socially distant, and avoid large gatherings. None of that has changed with warmer weather, and members of our community starting to be vaccinated, I know there will be a strong temptation to let down our guard, but for the protection of ourselves as individuals and for the community. we cannot. We’ve all read the news of the variants. we know they’re present in this country and they are spreading, and we know that we don’t know whether all vaccines are equally and fully protective against all variants, or whether prior infection with one strain provides full protection against others. Simply put, we do not know the risk to other members of the community.
For us to navigate spring term successful for us to have a successful commencement celebration for our graduating students, undergraduate and graduate alike, and for us to transition quickly and smoothly to a summer where we hope to support even more in person activity, we need to continue to take these three simple steps: masking, handwashing, and socially distanced gatherings, including no large gatherings. Simple steps, and small steps that public health officials have told us and shown us over and over again, make a tremendous difference in the health of our community.
In terms of trends on other college campuses these past two weeks for our Ivy peers reporting data for the year 2021 all lie between 0.17 and 0.80% positivity. Two weeks ago, that range was 0.12 to 1.0%. Our overall level of 0.30% for 2021 is there for well within the range of these Ivy peers. Our NESCAC peers are currently reporting positivity ranges from point 0.80% to .21 % for calendar 2021, a slight increase from the range they were reporting two weeks ago. And our local state university peers, UVM and UNH, are at 0.32% and 0.70% for 2021 respectively, slight increases from where they were two weeks ago, again similar to many of our peers. I cannot say enough—these increases at so many of our peer institutions over the past two weeks, as the weather has gotten warmer, are reminders that once again, and I will say this over and over again because it is so fundamental and so important: we cannot let down our guard.
We do know that these past several days, as undergraduate students returned to campus and as classes got underway lines at the testing center got long at certain points in the day. We’re fixing this by working with our partner Axiom, to add staff to manage the ebbs and flows of student testing needs being tied much more closely to the class time schedule. I ask that you please bear with us. We know it can be frustrating to experience this after having come to rely on testing running so smoothly as it did fall and winter term. Quite simply, we’re on it.
Please note that we’ll begin pairing PCR with antigen testing beginning next week on Thursday, Friday, and Saturday for students and for employees later in the term.
Let me turn now from testing to vaccination, first as our tests worth co-chairs Josh Keniston and Dr. Lisa Adams announced to the community on Friday, March 28, Dartmouth partnered with the state of New Hampshire to help facilitate scheduling vaccinations for some of our New Hampshire resident employees of the former JCPenney in West Lebanon. This partnership didn’t change any parameters around vaccine eligibility, but it did provide convenient and simple scheduling for eligible employees in the state’s 2a or 2b vaccination categories, or in any earlier categories. Phase 2a was for staff in K-12 educational environments, licensed child care facilities, and licensed youth camps. Phase 2b is open to all individuals between 50 and 64 years of age. This partnership has worked extraordinarily well. By the end of tomorrow, we will have vaccinated close to 550 employees eligible by New Hampshire state criteria at the state-run JCPenney site through our pod in scheduling partnership with the state.
I’ve been asked by many whether this partnership will continue, and at the present time the answer is simply we’re exploring it, but we do not know whether it will be continued beyond today other than providing for second notices for those individuals requiring them and already vaccinated through this partnership, but we also do not know that continuation of this partnership will be required. As many of you saw in last Friday’s COVID test scores email from our co-chairs, New Hampshire and Vermont, will open up COVID-19 vaccination appointments to all state residents 16 years and older, on April 2, in New Hampshire, and April 19 in Vermont.
Over the past week, most who have worked directly with the New Hampshire, Vermont scheduling systems have found that they’ve been able to get appointments within days. That was my own experience as well. We therefore encourage all members of our community, particularly our employees, and any eligible students who are residents of Vermont and New Hampshire to explore getting vaccinations through the state, even as we continue to explore continuation of the partnership that’s been in place for Phase 2a- and Phase 2b-eligible individuals in New Hampshire these past few years.
We know that beyond what I’ve just mentioned, some of you still have questions regarding when and where you may receive a vaccination. And in particular, we’ve gotten many questions from parents and students asking what steps are being taken to help students get vaccinated. To all of you who are asking these questions, please know that we at Dartmouth continue to explore all avenues we can to help the Dartmouth community, including the Dartmouth student community, get vaccinated. Decisions on vaccine eligibility for out-of-state students are made on a state-by-state basis, as is the case with most aspects of vaccine distribution administration.
As more vaccines become available and given the federal government’s recently announced intention to further accelerate the deployment of vaccine, with a goal of 200 million vaccinations administered by the end of April, many states over just the past week have indicated that they will allow all students, including out-of-state students to be vaccinated. More than 20 states, in fact, have indicated that, out-of-state students will be eligible, either through announcements from the universities themselves, or from public information from their equivalent of a department of health and human services.
In addition to these 20, another 24 states have made statements strongly suggestive of allowing out-of-state student vaccination, recognizing it’s in the interest of the public health of their communities. So, I anticipate that most, if not all of these, will also allow students to be vaccinated. I was therefore surprised last week to see New Hampshire become one of only two states in the country to announce that out-of-state students would not be eligible at this time, and that they should risk travel to return home for vaccination, particularly as I said, as at least 20, other states, and likely more than 40 are willing to vaccinate students hailing from New Hampshire. Dartmouth, along with other groups such as the New Hampshire College and University Council have reached out to the governor’s office for discussions around the timeframe for eligibility for out-of-state students, particularly to ask whether the recent announcements of an expected increase in vaccine supply might make it possible for students studying in New Hampshire to be eligible soon, enabling them to receive both doses of a two-dose vaccine, early enough to develop full immunity before needing to travel across New Hampshire and then home at the end of the term.
In terms of spring term itself with undergraduate, Guarini, and Thayer classes underway this week and graduate research and Tuck and Geisel classes and rotations continuing, and with the weather improving, to our students, I look forward to seeing more of you. As always masked and socially distance that out and about on campus.
There been questions about opportunities for outdoor events this term, including Green Key, a College tradition, and a hallmark of our New England spring, the opportunity to be outdoors and spend time with one another around live music, barbecues and socials, is so important to so many in this community, after a long winter, but unfortunately and sadly, it does not fit with our COVID guidelines, but our colleagues in student affairs will be working with students to identify social opportunities we can support this year, we do hope to have many of the components in place, but unfortunately Green Key as a date, simply won’t be possible under pandemic operating conditions this spring.
However, as I have announced previously, following on the high levels of participation in our outdoor winter term activities, similar plans are in place for spring, including tents for outdoor socially distance gatherings, a nine-hole disc golf course, electronic assist bicycle, boat rentals at Ledyard, guided hiking, and many more, with some of these activities expected to begin opening as early as next week.
Finally, before I conclude, let me turn to the celebration that traditionally marks the true end of spring term, that is commencement.
For those of you who will not be heading home immediately as soon as spring term exams end, and by that, I mean our graduating seniors, as well as those graduate and professional school students whose studies are coming to a close, let me offer some additional information on our plans with the in-person, student only ceremony announced previously now confirmed to be taking place on Sunday June 13 at 11 a.m.
This ceremony for all graduating undergraduates and graduate and professional students will be held on Memorial Field, rather than on the Green, to help support the flow of those entering and exiting the football stadium, and to help support doing so in a way that is consistent with policies supportive of community health that we anticipate being enforced at that time.
Graduates, families, and friends will be able to view the ceremonies, online. Only the graduates, and an as yet undetermined number of faculty and senior administrators would be allowed at the in-person ceremony, due to health and COVID health and safety precautions associated with COVID-19 again that we anticipate remaining in place at that time. Information on how to livestream all of the events will be available in May on the Dartmouth commencement website—https://www.dartmouth.edu/commence/
In addition, I’m pleased to confirm that also scheduled are the Tuck School of Business investiture 11 a.m. on Friday, June 11 at Memorial Field; the Dartmouth Institute for Health Policy and Clinical Practice ceremony 2 p.m. June 11 at Memorial Field; Thayer School of Engineering Investiture ceremony noon, on Saturday, June 12 at Memorial Field; the Guarini School of Graduate Advanced Studies investiture (livestreamed) … Saturday, June 11 (at a time to be determined); and the Geisel School of Medicine class day (May 26, at 6 p.m., in Spaulding Auditorium). …
Now, most of the undergraduate members of the Class of 2021 are expected to be in residence on campus for spring term and will be tested twice weekly for COVID-19. This continued commitment to regular surveillance testing is essential to both Dartmouth into the local authorities in permitting the celebratory events to occur.
Graduates and graduating students who are studying away from campus will be allowed to attend the ceremony virtually, or if they choose, in person, provided that they meet, testing, and quarantine requirements prior to their participation if they choose the in-person option. Again, more details will be posted on the Dartmouth commencement website in the coming weeks.
So, with that, let me bring our remarks today to a close by saying the obvious. It’s been a year of pandemic operations. It’s been a year of restrictions on our movements. It’s been a year of missing friends and family and it hasn’t gotten any easier. In many ways the past month, we have seen just how much harder it can become.
But I remain so encouraged by how far we have come. And I truly would like to hear from you, your suggestions through the spring term suggestions email address on steps we can take and things we can do that are COVID safe, to help make navigation of these last few months, as positive as possible, as we all look ahead to our anticipated return to a fully residential fall term, just down the road. Thank you everyone for your engagement for your hard work and for being such positive members of this community. Justin, over to you.
Thank you, Joe. And, as always, nice to be with you today.
Today’s most popular issue, I would say definitely pertains to the governor of New Hampshire, and what he has said about vaccinating out-of-state students and you, you said what we are doing to try to open up access for our out of state students to be vaccinated here.
In the meantime, a couple of people have asked should students who are here who might be able to get vaccinated in their home state, should they do that, or should students who are here, you know, call the governor’s office to try to persuade him to loosen up? I think people are just looking for a little bit of guidance about, given what we know then, at the moment, then, what should students do for, sort of, unable to access vaccine vaccinations.
Right. Thank you, Justin. Those are really good questions and so I’ll offer my personal advice, since it remains very early in the term, and this has been such a quickly evolving situation over the course of the past week, many of the states that I mentioned that have made announcements either directly or through their university partners that they would begin vaccinating college students, regardless of their state of residence, have made those decisions and determinations in just the past several days to the past week.
So, we’ve seen a lot of movement in this regard. And as I said we are in touch with the governor’s office asking if we can get a better sense of when he feels supply will be adequate to bring out-of-state students into the fold. And so, for that reason for the next week or two I would actually strongly advise students incurring the risk associated with travel by seeking an exemption to our travel policy, requesting to travel home to get the vaccine.
Once you do that you’re committed to returning home to get the second dose, please give it a week or two to enable us to continue these conversations, and see if we can reach a point where it will be possible within the state of New Hampshire.
If it looks as if we’re not making progress on that front, then we need to think about the pros and cons of students traveling and the risk that incurs versus availability of vaccine in other states. But having said that I’m going to remain cautiously optimistic that given the broad range of states that have made the decision to vaccinate out of state students, including students who hail from New Hampshire. I’m going to be optimistic that we can soon reach a point where we’ll be confident in the vaccine supply in New Hampshire sufficiently such that we can allow our students to get vaccinated here. So, the bottom line in the short answer is, sit tight for another week or two and let us continue to have these conversations.
Joe, another question I think sort of is premised on that, that optimism that you just expressed that I share—the questioner asks whether or not, when everyone is vaccinated or I guess everyone who wants to be vaccinated has access to vaccine, gets the vaccine will that necessarily lead to a new set of protocols. In other words, once we’re all vaccinated, do the rules change?
Right. I expect so. So, by fall, will rules change? Yes. Do I anticipate rules changing over the course of spring term? Likely not. It’s not a definite no, Justin, but likely not just because of the rate of progression of vaccination rate.
The real question is summer term and so I think there was so many questions that we’ve had to address over the course of the past year, right, rather than speculate I’d say let’s be data driven. Let’s see where we are two weeks, four weeks, six weeks from now and that will enable us to make a determination as to whether we can become more flexible in terms of policies and procedures over the course of the summer term. Certainly, once we reach the point where the vast majority of the community is vaccinated, we can anticipate relaxing several restrictions and that doesn’t have to be tied necessarily to the start of fall term.
So I think that you may have just answered this question, but I’m just going to put a finer point on it because a lot of people are asking about, will there be changes in the summer because of x, you know, basically, you know, can we say now what summer will look like, given what we think the progression will be. Will there be classes in person this summer, will there be trips at the end of the summer, for, for the, for the incoming classes, is what you just said pretty much apply that we’re going to just have to, we’re going to have to wait until we get closer and have more data in order to make an informed decision?
So, yes, we need to wait until we have more data to make informed decision, but I think, Justin, I can sketch out a continuum with a fair amount of confidence in things evolving in this way.
Spring term, we are largely going to be operating the current according to current protocols things may change later in the term but that’s what I anticipate based on rate of vaccination progression, and also case counts locally and across the country. Fall term we anticipate being fully residential open and operational—masking will likely still be required—but I’m expecting full campus occupancy, full density classes, and labs being offered in person.
So, what does that mean in terms of summer? Summer is what I’ve referred to as a period of transition. We need to see where we are early in the summer to make a decision as to how quickly we can begin to relax certain of our restrictions, but with faculty and staff being in an age group where vaccination is proceeding, a pace, and will continue through April, I’m fairly confident that we’ll be in a position to be able to offer more in-person experiences which means fully in-person classes or classes within person elements over the course of the summer, not the full curriculum, but I am hopeful that it will be substantially more than we’ve been able to offer through winter and spring term.
In summer we are going to continue to give faculty choice in mode of delivery, but several faculty members anecdotally have said over the past two weeks, feeling a sense of optimism now that they’ve received their first dose of the vaccine and asking questions about what it would take to be able to teach in person this summer so those are all positive trends.
In terms of the events that take place in August and early September as we move towards the start of the fall term—so the first-year student enrichment program FYSEP, orientation, or trips—we are working hard to put in place elements that would be in-person elements associated with these trips.
Does that mean trips will happen exactly as they have in the past? [noncommittal sound] Well, maybe we need to think about the Moosilauke Lodge elements of it a little bit differently, depending upon where we are at that point in time. But the teams who are working on this are engaged in planning that assumes that many elements of these traditions and of these important arrival events will in fact be in person in the fall. So, there too, I am optimistic.
Joe, we have time for one more question and let’s stay with the fall, because this is a question that has come in a couple of times and has come in in the past. When will I guess it’s when will fall housing be the open for selection and will it be sort of back to normal, given what you have said about the expectation of fall being really the return?
We are anticipating that all students will be vaccinated, other than those who are exempt for medical or religious reasons. We therefore anticipate that fall housing will be back to normal. When we make a final decision on allocation of housing that’s a question actually, I can’t answer, Justin. That’s a question that’s put to the student affairs team and dean of the College Kathryn Lively, but I also know that no final decisions have been made there. That’s something they’re still discussing, and are working through, and will be working through over the course of the next, I would say, four to eight weeks as we prepare for fall term opening. So, more to follow around fall term and fall term planning but things are definitely moving in a direction towards expectations of vaccination, across the board, and therefore fully residential, fully densified residential housing operation.
And I would just say as a side note, I can’t tell you how good it makes me feel be able to utter those words after a year of managing our way through and discussing some of the challenging restrictions we’ve had to put in place that are hard for so many. I am truly looking forward to welcoming everyone back this fall.
So, with that, let me turn to two other people who I know are very much looking forward to a return to normal operations and having students back in full force on campus this fall, graduate and undergraduate alike—chair of the board of trustees Laurel Richie and professor of mathematics and president of Dartmouth College, Phil Hanlon.
Laurel, Phil, great to see you and thanks so much for joining us today.
Absolutely, Joe, thank you.
Thanks for having us.
Wonderful, always, to have the two of you. So let me start by, I’m going to ask each of you just a few questions and I’m going to make sure we allow plenty, plenty of time to open up to our audience and give them a chance to ask you questions directly.
I actually want to change topics a little bit, Phil, starting with you, and to touch on something we’ve discussed in prior Community Conversations, but I didn’t address at all today in my remarks, saving them for you and those are questions about the budget. And before I get into some of the more specific questions, I just like to ask you about some of the changes that have been made in the way, Dartmouth manages its institutional budget.
They have in fact turned out to be very important in our weathering the financial impact of COVID on our operations this past year. I, you may not remember, but I certainly do our very first conversation, sitting in my office when I was dean at the Thayer School, and you’re stressing the importance from the beginning of Dartmouth taking steps to broadly address the rapidly increasing cost of higher education. And the result of that focus that you brought to this institution and the strong will to get it done, is that the rate of tuition growth is past seven years has been the lowest since 1950s, as an example.
And so, let me just ask you about that—why did you focus on this as an important first step? And how would you think about accomplishing tuition restraint given what we’ve seen all across higher ed for the past 50 years?
Thanks, Joe. It’s still a really important question. And before I get to it, however, I do want to thank you, especially, for your incredible stewardship of campus operations over the last really tumultuous year itself. So, thank you. We all owe you a debt.
So, as you point out the high cost of attendance, it’s a challenge for all of higher education. The sticker price or cost of attendance has grown at something like 2.5% above the rate of inflation for 40 years in a row. And the result is that the cost of attendance now at private colleges, like Dartmouth, and the cost for non-residents of public universities, in many cases now exceeds the median household income in this country. So clearly this is an unsustainable model.
Let me start to answer your question talking about why there has been this 2.5% differential. About 1% of that can be attributed, to mem based financial aid, and in my mind, that’s justified. We charge those who can pay a bit more to help out those who can’t. But that still means that net tuition, tuition on financial aid, has risen about 1.5% faster than inflation, and, you know, what accounts for that? In my mind that the number one thing that accounts for this that we have changed here at Dartmouth is the way we handle innovation and excellence.
So, in a great university like Dartmouth, we must always be at the cutting edge. We’ve got to be pioneering new ways of teaching. We’ve got to be doing research on the frontiers of knowledge. We need new kinds of facilities to support these activities, and we need to make investments to bring outstanding faculty and students on campus to engage in this work.
For these past four years, higher ed, at large, has mostly innovated through addition, rather than substitution. So, what I mean by that is rather than stopping lower priority activities and reallocating those funds to the school and important initiatives, universities have simply added the new initiative costs to their tuition and cost of attendance.
And so, upon arrival, to get to your question, I think one of the most important fundamental things I did was to ask every major unit, major meaning like Tuck, the provost area, campus services, athletics, to identify every year 1.5% of their spend that they were going to stop doing and tell us how they were going to invest those funds in their most compelling new initiatives. And I think the result has been what you just reported, robust investment in the academic enterprise, and the smallest percent increase in tuition since the 1950s.
You know, Phil, when you lay it out that way it sounds so logical, right? And not radical at all, but I remember when that was announced. And I remember as Thayer School dean thinking, “OK, we’ve been focusing our resources, this is going to be a change however in how we approach this because it is formulaic. It is 1.5% every year. We need to focus on that.”
It was enough of a story that I remember in New Hampshire Public Radio coming to campus to talk to several of us about this, how are you going to manage it. What do you think it’s going to do on your operations? And at that time, it was a bit of an unknown, but I think that the outcome the benefits to families in reduced rates of tuition increase, and our ability to focus our resources much more narrowly has been huge. So, thank you, thank you for bringing that fiscal discipline to us.
So, Laurel, I’d like to turn to you now with that a question and more from your perspective of one who has been in leadership positions for much of your career and seeing a whole range of operations, not just higher ed, you advise leaders of major corporations in your current role. You’ve been in those positions yourself. You were commissioner for a major professional sports league. Help me think about this past year of COVID and put it in context. So how does this compare to other external pressures you’ve seen organizations, is this a walk in the park, how does this compare to what you’ve seen in other areas over the years of your career?
Well, definitely not a walk in the park, and let me echo Phil’s appreciation, Joe, for your leadership during this time. It has been critical to us and you’ve done it with great energy and focus so thank you for that.
You know, it sounds sort of cliche to say, unprecedented but it truly is and when I think about it, you know, in addition to Dartmouth’s board, I serve on the board of a toy and entertainment company that’s run by a Dartmouth grad, a live-entertainment company that’s also run by a Dartmouth grad, a child care business, and a financial services business, so really broad and different businesses and categories and industries, and I think what differentiates this moment in time from any other that I’ve ever seen are three things.
One, the immediacy of it, it hit us quickly, and we had to turn on a dime, in order to respond. Sort of how pervasive it was, you know there wasn’t literally was a person or country or industry on the planet that wasn’t affected by it. And then the third thing is the uncertainty. So, we hear about the pandemic, it begins to roll out, and we’re addressing the immediate needs and challenges, but we have no idea how long it’s going to last. And so, and information was coming and going.
So we were trying to operate under shifting sands and so to me, the speed, the prevalence and the uncertainty have just made this, unlike any time I have, I’ve ever seen, even the moments of good news, you know Hasbro, for example, you know, the toy sales was through the roof right all of a sudden people were going back to Monopoly, but to think about how to make sure they could produce enough games, they produce them outside of the U.S., to get them to the U.S., and then to get them in the consumers’ hands when consumers aren’t going into the store so I just think it was and remains unlike anything, any of us have ever seen.
That’s a really interesting point and it’s actually relevant even to those of us in higher ed. You can call them supply chain issues if you like, it’s really unfair and a higher rate context but, when I think about how we suddenly and all of higher ed needs to pivot overnight to remote education, and then begin to think about our international students who are in countries, literally spanning the entire globe, synchronous or asynchronous education, how do you foster the discussion sessions that are so central to Dartmouth education, what if there’s internet censorship in their home country or bandwidth is really weak, how do we make the full educational experience available, never mind things like engineering and science labs.
So, it’s not just sending everyone home to work it was a complete and fundamental disruption of our or business model that made it interesting, certainly and challenging in ways I think none of us could have anticipated a year and a half ago.
So, Phil, I want to turn back to you now with another budget question and I want to drill down a little bit more specifically and ask about the endowment, when we’ve had some of these conversations earlier in the year including one or two Community Conversations that you joined us for you or others were, Rick Mills, our executive vice president for finance administration, was here, were asked many questions about using the endowment to mitigate operating losses.
As it’s pointed out, Dartmouth has a $6 billion endowment, you’re incurring operating losses, why don’t you just draw on that to address the short term? How do you respond to those who asked why we couldn’t simply do that to fill holes in the operating budget brought about by COVID?
Great, well thanks for that question, Joe. And Laurel, I am so glad you didn’t say this last year has been a walk in the park.
So, on the endowment question—annual predictable payout from the endowment plays a crucial role in maintaining Dartmouth’s operations. So let me lay that out in this way. At this point Dartmouth spends about $1.1 billion each year. Revenue generated by its activities, that is things like tuition, room and board, sponsored research funding, and federal grants, they generate about $750 million to cover these expenses. And so, the remaining $350 million each year comes from about $50 million in the annual fund from generous donors and then $300 million in endowment payout.
So that target endowment payout, the $300 million, that amounts to about 5% of the endowment value, and that 5% has been calibrated, so that our average investment returns cover that endowment draw plus inflation. So, put another way, even though we’re paid out 5% of the endowment value to cover campus operations each year, the average investment return is able to cover that payout plus inflation, so that the buying power of the endowment holds steady.
The problem is if we reach into the endowment to cover this year’s shortfalls, we reduce the payout in subsequent years. And so, we take away support from future generations. And so just to give you, sort of, for instance, suppose that we had said in this COVID year we were going to pull a $100 million out of our endowment to cover the shortfall.
Every year going forward forever, we would lose $5 million a year in our operating budget in inflation adjusted dollars, and so therefore to maintain the strength of Dartmouth over the long term and to be equitable to future generations of Dartmouth students, faculty, and staff, we need to deal with current day financial shortfalls through adjustments to our operating budget, rather than tapping the endowment.
Phil, in that context and if I may, let me ask you a follow up question that I’m sure on the minds of many members of our community. So this morning we announced three year office the establishment of the infrastructure renewal fund that was approved by the board at that meeting earlier this month earlier in March, and that’s structured a little bit differently in that it’s designed to address, long term lack of investment in backbone infrastructure that’s needed to make the campus operate and support the academic mission of the institution the teaching and learning and research of our students and faculty and staff, community.
And so how, how is that different than what can you tell us about how we think about the creation of this infrastructure renewal fund, and why that is an area where is improved appropriate to take a supplemental draw from the endowment to address these long standing challenges that we face budgetarily?
Thanks Joe. And, you know, just to give, to make this a more concrete, an example, major infrastructure projects that the infrastructure renewal fund will cover or things like our power supply. So, changing from our deteriorating steam tunnels to hot water delivery of power, and a new power source from our power plant. So according to the argument I just gave, this infrastructure renewal fund will, in fact, impose a cost on future generations through endowment payouts that are lower than they would have been without the IRF, the Infrastructure Renewal Fund. And in my mind, this is justified because major infrastructure improvements will benefit the campus on into the future.
Think about it this way, as the IRF taps the endowment to help pay for renewal of the campus power system, that will result in a marginally lower payout from now down to the campus budget 10 years from now and 25 years from now. So, in other words we are asking the campus 10 years from now, and the campus 25 years from now, to bear some of the cost of renovating the power system. And to me that makes sense because the campus 10 years from now and 25 years from now will directly benefit from the investments we make in modernization of these large infrastructure projects.
Right, so rather than, so if I can paraphrase just to make sure I’m understand what you’re saying correctly, rather than a draw to address an immediate operating deficit which is arguably taking funds today that do not benefit infrastructure that supported the past and certainly don’t benefit students to the future, right, that is clearly something that doesn’t adhere to this principle of intergenerational equity, but if we think about problems that and challenges that developed over time, over many generations of students, are with us today, and whose improvement is going to benefit many, many generations of students in the future, that’s exactly the purpose the endowment is designed to support, is that fair?
I think that’s fair. Absolutely and that’s a nice go to put it. In fact, I’m thinking about it a different way, it would actually be inappropriate to ask the campus of today, to bear the entire cost of renovating major infrastructure which will benefit future generations.
Thank you. So, Laurel, let me turn to you with a last question before we open it up to our outside audience and turn it over to Justin. You have been a member of the board for nine years. You’ve been the chair for the past four. You’ve been the chair through a COVID year that’s one of the most challenging I think clearly that we’ve ever had to navigate as an institution, Are there any particular lessons learned that you’d like to pass on either from your time as a board member or your time as chair to your successor is chair that might help us be better prepared shorter correction of crisis of this magnitude or maybe even a slightly smaller crisis, find its way to us in the next several years? What advice do you have?
First thing I would say is, Liz Lempres will be assuming the role of chair of the board in June, and we are, as an institution, going to be in great hands, so that’s one piece. She’s been on the board of trustees; she’s been on the advisory board for Thayer and she’s just going to be wonderful. And that said, I would offer a couple of thoughts of things that I think helped us through this crisis. And I think first is preparation, you know, the fact that we had anticipated, not a pandemic, but we had anticipated a challenge to our financial model, and having done that work, led by Phil and supported by the entire institution, the hit to us in this year was a little bit less on a financial standpoint because we had anticipated and planned for an unknown.
The second thing that I would say is flexibility, and that you know the best laid plans, you have to be willing to abandon them when new information, new data comes in, and to be responsive to ever-changing sets of circumstances. Communication is critical so the fact that we set up these Community Conversations, because we knew that as time rolled on, and we had to maintain that degree of flexibility that communication was going to be really important. So, and maybe that’s my marketing background, I don’t know, but I think it is impossible to over-communicate and (we need) to communicate with transparency and with empathy, so I think that’s important.
And then the last thing that I would say is it was, I was really both proud of and grateful for the diversity of our board, as we had, you know, as we sort of went into this unprecedented time. All the data tells us that diverse teams lead to more effective organizations and institutions and I would say that you know that conversations that we have around the table, or around the screen, we’ve benefited from the diversity of the board so preparations, flexibility, communication, and diversity would be the four things that I would and have shared with Liz.
Thank you, Laurel. Wonderful to have that as guiding principles as we move forward into the era of the next chair and look forward, of course, to you staying connected and engaged in and helping us through and in the years ahead. So, Justin, when I turn it over to you and let’s see what questions we’re hearing from the outside.
Thanks, Joe. Laurel and Phil, great to see you as always.
Laurel—I’m going to stick with you, because a question has come in that is sort of a follow-up to what you just said to Joe, as well as what you said in an earlier answer. You talked about how we, how everybody, when the pandemic struck, sort of had to turn on a dime, because it was, you know such an unprecedented set of circumstances and the world changed overnight so this questioner asks how did the board, turn on a dime and what was it like to be a member of the Dartmouth Board of Trustees, and meet remotely for an entire an entire year?
Yeah. So, I think one of the things that I have really appreciated is the strength and the power of a strong culture. Because, as we moved from our in-person meetings to remote meetings, we know each other, we’ve worked together, we’ve worked with Phil and Joe, and the team and so, while we dearly miss the post-meeting gatherings at PINE, we were able to conduct business in a new format and a new channel, because the relationships existed, the sort of rules of the road and conduct and requirement for engagement was there.
I would also say that I think we’ve learned a lot, that there’s been an upside to this too, it hasn’t all been downside, right? We probably met more often as a board, and more impromptu meetings more single topic meeting so I think we have been more nimble during this period, and I suspect that that’s a skill that we’ve now added to our arsenal that we can carry forward when we are able to get back together.
Phil, if I could go to you. This is kind of a broad question, but I think in some ways that that makes it makes it kind of an interesting question and allows you to expand on the subject I’m about to introduce. Somebody asks, what was the greatest budget related challenge during COVID? What happened during COVID that tested our or strained our budget more dramatically than anything else as you think back on the last year?
It’s a great question. And, you know, there are two sort of stresses that hit us quickly, which I think I would pick both of them. One was on the revenue side. So lost revenue as students didn’t return to campus, didn’t pay room and board but we kept our staffs on during that period. And then, even on throughout the rest of the year as the campus was de-densified, and there was, again, less room and board paid. There were more students taking gap years, so we had our unexpected revenue drop in lines of revenue that we had always expected to be quite predictable. So that, that was one thing.
The other was probably less of a surprise because it happens whenever there is a major recession, but that was the increased need for financial aid. And we meet the full needs of our students and we are committed to that forever and we’ll continue to do that, what that means though is that the broad-based economic collapse hit the country, and our Dartmouth families suffered loss of jobs and income, it was our obligation to come up with the financial aid to help students continue to be Dartmouth students. And so those two things I think both are challenges because they were kind of unexpected and out of our control.
Laurel, when Phil was here last, he was asked whether or not he meets with the other Ivy League presidents or has been meeting with them during COVID. Likewise, someone wants to know if you are in touch with other board chairs, particularly throughout this period and whether or not you know that’s been helpful as you tried to lead through this extremely challenging last year or so?
Yeah, so there’s a group of Ivy-Plus chairs who get together and prior to COVID we had an annual meeting in person, and we would visit different campuses and sort of them sort of come together and share experiences but also learn something new from each other. And we have continued to meet during this time period and much like the Dartmouth board, we have met with much greater frequency, as we were all trying to wrap our arms around what was happening, how to respond, how to convert to remote, how to manage the needs of various stakeholders from students to staff to faculty to the broader communities in which we exist, and lots of discussions on the role of the board versus the role of the administration team in navigating this and making the tough choices so it was really, really helpful to be able to, to come together and just sort of share our experiences and test out our different approaches with each other.
Phil if I could go, if I could go back to you. Obviously, Joe confirmed earlier that commencement will happen on June 13, that begged the predictable question that many people have written in, which is who is going to be the speaker, which I know that we’re not we’re not prepared to announce, but relatedly, how do you relate a commencement speaker during a pandemic like how did you, how do you think about it? What you want the students to hear from a commencement speaker at a time like this and then just sort of the logistics of, of making it work? So, how is that different this year than in past year, sort of thinking about that question, which is a big question every year, but even more complicated this year?
Let me answer it in a couple of ways. One, we always want a commencement speaker who will inspire our students, not only with their words, but with the example of their lives, and with the commencement speaker and the honorary degree recipients what we seek to do there is actually show our students here are examples of what the lives of leadership and impact can look like. And so, we of course we want people who have accomplished very significant things. And so, it’s always hard to get them to campus, they’re busy, they’re in demand. And so, this year, this year was no different.
So, I think the other thing to mention on this topic, however, is that, you know, as we looked last year at a virtual commencement, we were able to get Sal Khan to speak, virtually, and that was actually easier than asking him to travel to campus and in the same vein, we as a campus, have tapped, thought leaders and public intellectuals this year like never before. And it’s because we’ve been doing so much of our, of our teaching and our engagement with the public online. And so, it’s, it’s been one of those positives that came out of this really tumultuous difficult time.
Well, we have time for one more question, and I’m going to let Laurel have that one and Laurel, let me just say here that, that I know that your term as chair is winding down, and it’s been a great pleasure to work with you so closely and I can’t believe that there will soon come a time when you are not in Dartmouth’s board chair. It’s going to be quite a change. We’ve all grown accustomed to your, your leadership and your advice and your willingness, always to jump in and do whatever is asked.
So, thinking about that, I’m curious, what you’ve learned, as board chair over the last four years, that you would like to then sort of convey to us for how we should think about moving, moving forward.
Well, it goes without saying that this has been beyond pleasure. It has been an honor, and my sister said to me the other night, you’ve done lots of really interesting in your career but it’s very clear to me that nothing has brought you more joy than (being) chair of Dartmouth’s board, and she is absolutely right. It has been just a great gift and an honor and a pleasure, and the highlight of my career and maybe even my life.
So, what have I learned, I’ve learned that you’ve got to aim high. You know, I think of some of the early conversations, Phil, that we had about the Call to Lead campaign and how ambitious could we be in our aspirations for Dartmouth, and we aimed high, and we aimed high to the point where we were beyond nervous. And now, I believe that we are going to not only meet, but exceed those aspirations, so I’ve learned the power of aiming high.
And I’ve learned about leaning into your strengths and Justin, you will have great empathy for this but, you know, when we were thinking about the branding work and helping people with messaging about Dartmouth, we set the goal of wanting to get rid of the apologizing. Like why are we describing Dartmouth as two hours from Boston and five hours from New York City, right? No, we are right in the middle of the mountains and the Connecticut River and that’s exactly where we should be and we’re going to be really proud of that and if that’s not what you’re looking for in an experience, a learning experience we’ll you give a whole list of places to look, but if we are what you want and if you value the outdoors and you find Hanover to be magical, then we’re the place for you.
And I think I’ve learned to embrace change, you know, particularly in this last year, you know, I often think that if we were taking on the task of thinking about remote learning and what it would look like, we probably, not just Dartmouth but every institution I’m involved with, it would have been three different task forces and four different pilots and then an assessment and then a review and an adjustment and it would have been a six-year process, easily. And we had to turn on a dime, and while we are all looking forward to getting back together, I think we’ve learned that we can respond, we can adapt quickly and that maybe there’s a new model that’s lurking around the corner and maybe there’s a lot of merit to it so we will never lose what is so special to Dartmouth and our DNA, but I just hope that we continue to charge forward, and we’ll bring all the good stuff with us, but we should keep charging forward.
Thank you for that, Laurel, charge forward. Joe with that I’m going to say thank you, Laurel and thank you, Phil, and toss it back to you.
Thank you, Justin, and Laurel, and Phil, let me add my thanks to the two of you for your insights, remarks, comments, participation, and in particular, your leadership, this, this past year through the throughout your tenure as well.
Laurel, you said—and I wrote this down, I was struck by it—that never underestimate the strength and the power of a strong culture. Strong culture for me means strong community, not perfect but always questioning, always striving, and always there for one another, and that’s how I think of this community, the Dartmouth community. That’s how I think we have been able to weather this incredibly challenging year so well and it is driven significantly by the example and leadership that the two of you set from the top, so thank you for that Laurel. Your term extends for many more months so we’re not letting you go yet and we’re counting on that. Phil as always, for your leadership and steadfast guidance, thank you.
Thanks to everyone for joining us today. Stay well, be healthy, enjoy the slow arrival of spring. Stay masked and socially distanced, and we look forward to seeing you again at our next Community Conversation in two weeks. Take care.