MIT in Good Fiscal Shape, Report SaysBy Karen Robinson
The annual report of the treasurer for the fiscal year ending June 30 shows good financial growth for the Institute's investments.
Declining federal research dollars and expensive building projects, however, put a premium on sustained growth.
The decline in government funding hits MIT especially hard, as on-campus research totals more than $300 million. The amount of research funding MIT receives in 2001 will have dropped an estimated 56.7 million dollars compared with 1990.
The Institute will have to absorb this difference through gifts and investment returns and is presently roughly halfway through the shift.
MIT not affected by crisis
MIT has been only very modestly affected by the recent economic crisis, losing perhaps one or two percentage points, said Glenn P. Strehle '56, vice president for finance and treasurer. The picture was bleaker last August, but holdings have since regained nearly all their lost ground. MIT had no meaningful investments in hard hit areas.
"Publicly traded securities held by MIT are selected by outside managers in accordance with policies of the investment committee," Strehle said.
The most significant impact on the MIT community, Strehle said, will be on individual students, particularly international students from southeast Asia.
MIT also has large real estate holdings in the Cambridge area, most notably the land at University Park and 640 Memorial Drive.
Strehle noted that one major change that he has seen take place is increased dependence on gifts and investments than on the federal government. This year, new records were set both in gifts for the endowment and expendable gifts. The treasurer's report states that "the total amounts of gifts for all classes of net assets were $158.5 million and 128.8 million for 1998 and 1997, respectively."
Strehle added that, compared to 1975, when he became treasurer, "by many measures MIT is doing better." The endowment has increased 12-fold under his tenure to 3.67 billion in June, up 21.6 percent from a year ago. Strehle is retiring from his post at the end of the year.