Hollister explains revised guidance on endowment

first_img The Daily Gazette Sign up for daily emails to get the latest Harvard news. The COVID-19 pandemic has created significant and immediate financial challenges for colleges and universities. Many institutions of higher learning are faced with difficult decisions about the best way to manage declining revenue coupled along with increased investment to continue supporting an environment of academic excellence amid new health protocols.At Harvard, the Corporation has fiduciary responsibility for the University’s academic, financial, and physical resources, and overall well-being. The Gazette spoke with Thomas J. Hollister, Harvard’s vice president for finance and chief financial officer, to learn more about the Corporation’s revised endowment guidance for the 2021 fiscal year.Q&AThomas J. HollisterGAZETTE: Distributions from the endowment provide a critical source of funding to support the University’s mission of teaching and research. What is the process for setting the endowment distribution? HOLLISTER: It is indeed a critical source of funding, in fact, the University’s largest, at 35 percent of revenue. Between past gifts to the endowment and current giving, the generosity of Harvard donors creates 43 percent of the annual funding for the budget.The accumulated wisdom of endowment management over many decades suggests that if you are distributing as little as 4 percent of the market value of the endowment, you are probably hoarding too much, and if you are paying out at the 6 percent level or higher, you are probably being fiscally irresponsible, because distributions cannot be sustained at those levels in perpetuity.Harvard in particular uses a formula to smooth the impact of fluctuating market values and provide budget stability for Schools and units. Similar to our peers in higher education, we generally target to distribute about 5 percent of the market value, which is roughly $2 billion a year on a roughly $40 billion endowment. However, it is the Corporation that makes the annual decision.GAZETTE: You have previously mentioned in this space that Harvard intends to distribute as much from the endowment as it responsibly can. Can you give us insight into the Corporation’s recent decision to revise the fiscal 2021 endowment guidance from a 2 percent decrease to a flat percentage change in the dollar amount of the distribution?HOLLISTER: I did mention this previously, as did President [Larry] Bacow, Provost [Alan] Garber, and Executive Vice President [Katie] Lapp in a message to the Harvard community in the spring, that the intention is not to hoard the endowment but to actively use it as much as can be responsibly done.The recent decision to make a change in the distribution has to do with some inherent timing tension in the process. The Schools and units want early guidance on what the endowment distribution will be so they can build their budgets for a fiscal year beginning on July 1. The challenge is that this early guidance requires a prediction of the endowment’s market value on June 30 many months in advance.When the Corporation first decided to reduce the distribution by minus 2 percent, it was shortly after the Dow Industrial Average and the S&P were down 30 and 25 percent, respectively. Fortunately, the market recovered and has shown further improvements, and, consequently, the Corporation adjusted its decision to a flat distribution change. This adjustment means that the total dollar amount of the distribution for the 2021 fiscal year will remain the same as the 2020 fiscal year.GAZETTE: The COVID-19 pandemic has significantly altered the operating budgets for the Schools and units. How does the special assessment on endowment distributions help to cover pandemic-related costs?HOLLISTER: The financial impact of COVID-19 was sudden and significant in the spring, as it immediately adversely affected revenues and increased costs. We talked previously about the revenue impacts of rebates on room and board, canceled executive-education programs, increased financial aid, and research stoppages, and the increased costs associated with the implementation of new health protocols, including testing and tracing, new lab reconfigurations, and new and improved online course development. The Corporation decided to maintain the 3 percent special assessment on endowment distributions for the 2021 fiscal year as a means of providing funding support for the deans as they grapple with the financial dislocations during this transitional time.We have also talked about the cost-saving measures that Harvard has already implemented, such as reducing discretionary spending, instituting salary freezes, and reviewing capital spending in order to offset the economic impact of COVID-19. As we continue to look for ways to address these financial challenges, the special assessment is an effective way in which endowment fund beneficiaries across the University can help out, with some fraction of their money being used to help offset these new pandemic realities and contribute to the overall mission of sustaining excellence in teaching and research.GAZETTE: Given the improvement in the capital markets, what challenges lie ahead for the financial health of the endowment?HOLLISTER: Annual endowment distributions depend on future returns, as good returns on the endowment, from the underlying health of the capital markets, make possible healthy endowment distributions to academic programs and activities. But I should caution that we have two potential negative factors. The first is the apparent mismatch between the current high levels of the stock market with the underlying reality of a very weak economy. For example, the price to earnings ratio of corporate stocks do not support the current stock market levels, so the markets could be ready for some correction. Secondly, many experts on capital markets, including many of Harvard’s economists, are saying that the outlook for market returns is not attractive. With the low interest rates, low credit spreads, and a weak global economy, they say we are looking at lower-single-digit returns at best, which means that between these two factors we need to prepare ourselves for more than a few years of muted returns and ongoing pressure on the distribution. Remember, it was just a little over 10 years ago when the endowment lost 30 percent of its value and the distribution was cut by 20 percent over two years.last_img read more

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Brazil security forces make record drug seizure

first_img “With this operation, the traffickers lost the harvest and stopped refining a third of the 100 tons they produce annually,” said Sergio Lucio Fontes, an Amazon federal police official. Brazil shares 16,000 kilometers of borders with Argentina, Bolivia, Colombia, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela and French Guiana. The army and police operation netted 25 tons of marijuana and 657 kilograms of cocaine and crack, the Defense Ministry announced, saying the seizure represents a “historic record.” The operation is part of a strategic border security plan announced by President Dilma Rousseff in June 2011. Coordinated with Peru and Colombia along the 11,000 kilometer frontier, the operation disrupted smuggling and forced traffickers to abandon production of some 30 tons of cocaine destined for southern Brazil, the United States and Europe, the ministry said in a statement. One percent of this South American powerhouse’s 194 million people use cocaine or crack, according to official statistics. The Amazon region’s military commander, Eduardo Villas Boas, said that along the border with Peru, coca planting occupied an area of 30,000 hectares and produced three harvests a year. center_img Brazilian security forces have made a record drug seizure and disrupted the production of 30 tons of cocaine in neighboring Peru during a massive 19-day border operation, authorities said on June 7. Behind the United States, Brazil is the world’s second biggest consumer of cocaine and crack, a cocaine derivative with devastating effects. Federal police say 90 percent of the drug enters the country through Bolivia and Peru, with the other 10 percent coming through Colombia. Paraguay, meanwhile, supplies 80 percent of marijuana demand. Some 33,000 soldiers took part in the operation, along with 1,100 government officials. Weapons, explosives and illegally logged timber were also seized. By Dialogo June 11, 2013last_img read more

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Hoteliers are demanding the continuation of measures to preserve jobs for another three months

first_imgPhoto: Importanne Hotels & Resort Royal Blue ROYAL PRINCESS The contagion has been successfully stopped and we are now starting to restart the business, which is excellent, said the president of the Association of Hoteliers of the Croatian Chamber of Commerce Joseph Jutt Ferlan but stressed that they already know that the tourism sector will be the biggest loser in this crisis and that the recovery in some segments will be extended for a period of one year.”Therefore, we demand an urgent opening of borders to encourage tourist travel and the continuation of measures to preserve jobs for another three months because hoteliers will still not generate sufficient income over the next three months, which could independently cover the salaries of their employees. It is extremely important that we preserve jobs in this sector, because it is difficult to find new and quality employees”, Said the president of the Association of Hoteliers of the Croatian Chamber of Commerce Joseph Jutt Ferlan. The Association predicts that larger hotel companies will open one to two of the possible ten hotels, while the rest will face a complete suspension of operations. They emphasize that tourism has a large share in GDP and that the hotel industry is a strategic carrier of its quality. They therefore urge that their suggestions be taken into account so that they can return to normal work as soon as possible.  The letter sent to the Government also emphasizes contactless business as an imperative, especially when registering guests. In order to achieve this, it is necessary to urgently finalize the Ordinance on check-in and check-out of guests in accommodation facilities in a way that clearly defines the possibility of applying “digital check-in” guest registration, which would give them an additional sense of security.  The Association of Hoteliers of the Croatian Chamber of Commerce sent a letter to the Government requesting the mandatory continuation of measures to preserve jobs for another three months as well as the urgent opening of borders.last_img read more

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LIAT penalized by ECCAA

first_img Share Sharing is caring! Share Share Tweetcenter_img 69 Views   no discussions BusinessLifestyleTravel LIAT penalized by ECCAA by: – January 10, 2014 LIAT has announced that it will engage in discussions with the Eastern Caribbean Civil Aviation Authority (ECCA) having received a notice of penalty from the organization in connection with an incident which occurred on November 2, 2013.LIAT said in a statement on Friday that it’s management is reviewing these findings with its advisors and will engage ECCAA in discussion. “LIAT is committed to a fair resolution of the matter based on full and frank disclosure by all parties”. “The safety and security of our passengers remains LIAT’s top priority and LIAT continues to operate in full and strict compliance with the Civil Aviation Regulations and its operating procedures and manuals,” the statement notes.According to the statement, these matters remain under review by LIAT and discussion with ECCAA and “it would therefore be inappropriate to make further public comment at this time”.Dominica Vibes Newslast_img read more

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Lady Bulldogs Get Wins Over Lady Trojans

first_imgThe Batesville Girls Varsity Tennis team defeated East Central 4-1 on Tuesday.#1 Singles- Rachael Rose defeated Maddie Davidson 6-3, 6-4 .#2 Singles- Audrey Weigel defeated Carly Kane 6-4, 6-4.#3 Singles- Sophie Brown defeated Maddie Ricter 6-2, 6-3.#1 Doubles- Baylee Rohlfing/Corinne Stone defeated Kelly Buesher/Jaylen Hilbert 6-4, 4-6, 6-4.#2 Doubles- Kate Poltrack/Betsy Harmeyer were defeated by Brooke Stonefield/Grace Kraus 6-4, 6-7(3), 3-6.In JV, Batesville defeated EC 4-2. Winners in singles were Jenna Ertel and Maggie Walsman. Doubles wins came from Ertel & Walsman, and Carly Fitzpatrick & Kayla Stone.Batesville is 2-0 (2-0 in the EIAC) and will play at Franklin County on Thursday.Courtesy of Bulldogs Coach Mike McKinney.last_img

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