Former Dean of the Harvard School of Public Health Barry R. Bloom noticed in 2001 that he had “virtually no money in the richest university in the world to do all kinds of new interesting things [he had] wanted to do.”
Bloom and his administration then took steps to revise stipulations on future grants and donations to allow the creation of reserve funds that have grown large enough over the past few years for the school to avoid severe cutbacks in the wake of the economic recession.
The School of Public Health encouraged donors and grant applicants to factor in the indirect costs of research—including not insubstantial expenses such as heating and electricity—which cut back on expenditures paid for by the school itself.
According to the School of Public Health’s Chief Financial and Administrative Officer Laura T. Ketchum, payout from the University endowment accounts for only 13 percent of the school’s revenue—a smaller fraction than at any other school. Instead, the school relies primarily on federal research funding for its budget.
The creation of the reserve funds allows the School of Public Health to develop new initiatives in fields such as international or environmental health and provides a buffer against uncertainty in grant funding.
“If we needed to hire someone, if someone lost a grant, [and] there was research that we thought was promising, [but] the NIH hadn’t anticipated, we could keep this place going in exactly the same directions we thought were important on our own money,” Bloom said in an interview earlier this month.
When Julio Frenk ascended to the deanship in January 2009, he found the reserves virtually untouched since the previous years had seen a period of economic prosperity.
According to Ketchum, the funds that the school saved will now be used to fund critical priorities such as student support, faculty recruitment, new teaching and research initiatives, and infrastructure needs.
“We’re fortunate to have these reserves to be able to do this,” Ketchum wrote in an e-mail. “But, we recognize that continued prudent management means that we maintain an appropriate level of reserve balances to weather any future financial challenges.”
Though Bloom had not accounted for a major economic recession when he created the reserve funds—worrying instead that federal research funding might decline—he said he hoped that the money set aside would help the School of Public Health pull through current economic troubles.
“I was right for the wrong reason,” Bloom said. “I had no idea that the economic situation of the country [and] the University would crash, but those reserves did preserve the options for the new dean and I feel very confident that that was a good head start.”
