In response to a decline in the value of its endowment, the Institute of Politics submitted proposals for either a five or ten percent reduction in the size of its budget for fiscal year 2010, which will begin on July 1.

The Institute’s endowment and budget are both contained within the Harvard Kennedy School.

The proposals were drafted after the Kennedy School requested each of its divisions to submit three budgeting options, including one normal budget with no raises for faculty or staff members and contingency plans for five and ten percent reductions.

“We don’t know currently how long or how deep the economic crisis will run,” said Melodie L. Jackson, associate dean for communications and public affairs at the Kennedy School. “At this stage, the contingency plans are designed to try to plan ahead for worst case scenarios.”

The Institute draws its entire operating budget from its endowment, according to IOP Communications Director Esten Perez. The IOP endowment began with $10 million in donations after the assassination of President John F. Kennedy ’40 in 1963.

While the IOP does not release information about the current value of its endowment, Kevin P. Kiley ’07, a former chair of the IOP Fellows Committee, and Ashwin Kaja ’07, a former director of the IOP Skills Program, wrote in a December 2005 Crimson editorial that the endowment was nearly $100 million.

IOP Director Bill P. Purcell said that he expected the endowment’s decline to match that of Harvard’s overall endowment. In December, President Drew G. Faust warned that this drop-off could reach 30 percent by the end of the fiscal year.

Purcell said he was confident in the ability of the IOP to continue providing services to its students.

“We feel very comfortable that we’ll be able to fund our internship and stipend programs for this summer,” Purcell said. “Similarly, we’ve continued to operate the forum and we continue to keep the Fellows Program rich.”

Jackson said that a budget for the entire Kennedy School was currently being evaluated by the university.

“They will come back to us with additional guidance and that either codifies the budget, or we will go back and forth until we arrive at an approved budget,” she said.

Jackson added that the process, which normally ends in April or May, could take longer this year due to the economic climate.

For now, the IOP is waiting to see which financial plan it will carry out.

“Truthfully, we will not know the outcome until the end of the fiscal year,” Purcell said.

—Staff writer Evan T. R. Rosenman can be reached at erosenm@fas.harvard.edu.