Financial Report for 1955-56
A CONTINUING upward push in the expense of operating Dartmouth College is reflected in the annual financial report for 1955-56 which John F. Meek '33, Vice President and Treasurer of the College, submitted to the Board of Trustees at its annual fall meeting in Boston last month.
Going beyond the $7,000,000 mark for the first time, on both the income and expense sides, the report for the fiscal year ending June 30 listed the grand total of operating costs at $7,858,383. This was an increase of $936,684 over the preceding year. Excluding the auxiliary activities in this grand total, the educational and general operating costs for the year were $5,- 362,389, an increase of $688,355 or 15% over the 1954-55 figure.
Income fortunately kept pace with the rise on the expense side of the ledger. Total receipts, not including any part of the 1956 Alumni Fund, were $7,223,385. This gave an excess of expense over income of $634,998, but utilization of $660,000 of the Alumni Fund wiped out this "deficit and resulted in a credit balance of $25,002 for 1955-56 operations.
Of the year's increase of $898,423 in income, $624,185 came from higher student tuition and fees, which were raised from $800 to $980 per student, beginning in September 1955. Establishment of a $10 fee from applicants for admission also figured in a 27% increase in income from students. Gross income from endowment, after
deduction of investment management charges, exceeded that of 1954-55 by 895. Endowment income used for the year was $1,412,202, after $858,329 been transferred to principal or deferred to restricted funds, in accordance with the stipulations of donors or Trustee action. The application of $125,000 to the Associated Endowments income stabilization reserve raised that reserve to $1,000,000, still substantially less than the goal of one year's gross investment income which a number of Dartmouth's sister institutions have attained.
On the expense side, instructional costs rose $282,512, of which $188,500 went to faculty salary increases. Total scholarship expense at $593,604 rose $159,419 over the previous year, an increase mainly attributable to larger awards to offset the $180 increase in tuition and the general fee. A greater number of students on aid was also a factor in this enlarged cost, 206 freshmen on aid replacing only 107 scholarship men in the 1955 graduating class.
Financial aid in the form of both scholarships and loans was given to 25% of the undergraduate body. Including aid to second-year men in the associated schools, student loans totaled $107,102, of which $36,744 was made available through the Dartmouth Educational Association. Total student earnings at the Dartmouth Dining Association were approximately $47,000.
Higher expense in the categories of administration, plant operation and maintenance, libraries, health service and miscellaneous resulted principally from salary increases for officers and staff personnel. Expenditures of $85,000 in the first year of a five-year accelerated maintenance program, plus $30,000 in plant improvements, were met by transfer of $115,000 from the plant improvements reserve created by the Trustees in 1954-55. A further transfer of $180,000 from 1955-56 income to this reserve was made by the Trustees.
For Auxiliary Activities, total expense exceeded total income by $191,102 as compared with a deficit of $106,821 the year before. The Athletic Council loss for 1955-56 was $158,023, and losses were also posted by the Hanover Country Club and the College's Outing Properties. The Hanover Inn under the supervision of its alumni Board of Overseers operated at a gain for the fifth successive year in spite of substantial expenditures for redecoration and new equipment.
THE total assets of Dartmouth College as of June 30, 1956, were $54,488,423, an increase for the year of $8,378,498. On the balance sheet the grand total of endowment funds and funds functioning as endowment was listed at $43,705,102, book value, or a little over $7,000,000 more than for 1954-55. This endowment increase resulted from gifts and bequests of $3,035,- 418, a realized net gain of $3,541,272 on endowment investments, and income of $258,107 added to principal.
For purposes of investment, endowments are carried under two main categories: Associated Endowment Funds, totaling $32,498,952, and Separately Invested Funds, totaling $11,206,150. The associated funds are combined to promote broad diversification and to facilitate administration. Among the separately invested funds is the Hopkins War Memorial Program Fund which on June 30 stood at $1,998,017. This is reserved wholly for plant construction.
The investments of the College's endowment funds as of June 30 totaled $54,184, 587, excluding the Hopkins Fund. This total included $49,204,737 of securities at market value and $4,979,850 of mortgages, real estate and miscellaneous investments at book value, since market value for these is not readily ascertainable. Of the securities total at market, 33.2% was in bonds, 1.5% preferred and guaranteed stocks, and 65.3% common stocks. A year earlier these percentages were 27.4%, 2.4% and 70.2% respectively. During 1955-56 approximately $3,700,000 of common stocks were sold and the proceeds reinvested in bonds.
On securities investments alone, the average rate of return on the basis of market values was 3.88% as against 3.89% the year before. This included 5.25% on preferred arid guaranteed stocks, 4.23% on common stocks and 3.09% on bonds. On the basis of average book values, the rate of return was 5.70% as compared with 5.65%. Net return on average total investments, again valuing securities at market and other investments at book, was 3.55%.
Among the assets of the College, the June 30 valuation of land, buildings and equipment was 18,916,672. If to this were added $3,595,268 as the undepreciated book value of dormitories and other service
properties carried as investments of endowment funds, the plant figure would be raised to $12,511,940. The year's increase in the total value of Dartmouth's physical plant was $753,647, representing principally new construction begun during 1955-56 but not completed, such as Thayer Hall, new faculty apartments, heating plant expansion, and the Dartmouth Skiway development. The Thayer Hall addition is scheduled for completion this fall and will make improved dining facilities available to serve both freshmen and sophomores. The requirement that sophomores eat there has been postponed and will not become effective until next September.
Over a period of five years, of which 1955-56 was the first, a program of plant maintenance and rehabilitation, approved by the Trustees, will involve an estimated total expenditure of $1,400,000. During the past fiscal year approximately $280,000 was expended under this program. The plant improvement reserve provided $115,000 of this cost and the major portion of the balance was capitalized.
Income and Expense, 1955-56
1954-55 INCOME 1955-56 $2,281,954.39 Student Fees $2,906,139.21 1,311,202.15 Net Endowment and Similar Funds Income 1,412,201.73 242,427.23 Net Gifts for Current Use 278,510.79 59,801.60 Land and Buildings 57,709.00 29,871.90 Health Service 29,979.09 277,987.61 Miscellaneous 293,953.75 $4,203,244.88 $4,978,493.57 10,874.00 Add: Transfer from Maintenance Reserve 5,000.00 $4,214,118.88 $4,983,493.57 30,000.00 Deduct: Net Transfer to Plant Reserve 65,000.00 $4,184,118.88 NET EDUCATIONAL AND GENERAL $4,918,493.57 2,140,843.36 Auxiliary Activities 2,304.891.92 $6,324,962.24 TOTAL INCOME Before Alumni Fund $7,223,385.49 EXPENSE $2,090,854.04 Instructional 2,373,365.64 280,422.61 Libraries $321,103.34 477,791.58 Administration 555,384.49 715,550.92 Plant Operation and Maintenance779,250.97 434,185.00 Scholarships 593,604.00 193,884.48 Health Service 196,135.19 481,346.76 Miscellaneous 543,546.02 $4,674,035.39 TOTAL EDUCATIONAL AND GENERAL $5,362,389.65 2,247,664.05 Auxiliary Activities 2,495,993.81 $6,921,699.44 TOTAL EXPENSE $7,858,383.46 $ 596,737.20 Deficit Before Alumni Fund $634,997.97 605,000.00 Alumni Fund Applied to Operating Expense 660,000.00 $ 8,262.80 BALANCE added to Unrestricted Current Fund $ 25,002.03
