Exceptional endowment performance enables a range of strategic priorities in fiscal year 2023.
Office of the Executive Vice President and Treasurer
MIT plans to make significant investments in the next fiscal year to support the Institute community, strengthen its research enterprise, and enhance its digital and physical infrastructure.
The Institute announced in October that its pooled investments recorded a return of 55.5 percent — the strongest annual performance in more than 20 years — bringing the endowment to $27.4 billion. These exceptional results provided a unique opportunity for MIT to accelerate distribution from its endowment to tackle an array of Institute priorities in fiscal year 2023 — including an expansion of undergraduate financial aid and graduate student funding.
“MIT has arrived at an exciting moment. We are back together on campus, moving forward on priorities identified by our community,” says L. Rafael Reif, MIT’s president. “We were delighted to be able to provide a special pay increase last year, and we are expanding support across the Institute for our students, staff, faculty, and postdocs. We are also increasing our investment in cutting-edge research and infrastructure, to ensure that MIT will continue to serve as a magnet for the world’s finest talent.”
Of the additional funds from the payout on pooled investments, approximately 60 percent are restricted by donors for specific purposes, such as professorships, scholarships, fellowships, and research. The remaining 40 percent can be used for general Institute needs.
“In allocating these additional unrestricted funds, we needed to balance addressing compelling needs while also being mindful that the economic climate is volatile,” says Glen Shor, MIT’s executive vice president and treasurer. “Some priorities call for one-time investments, but most require recurring funding beyond next fiscal year, so it’s important for MIT to be in a position where we can maintain these investments and not have to scale them back down the road.”
Spending priorities were based on wide-ranging sources of perspective and feedback, including budget meetings with units, recommendations from Visiting Committees, and ideas generated by Task Force 2021 and Beyond, an MIT-wide effort to chart a course for the future of the Institute.
Supporting the MIT community
As a first step in allocating the new funds, in December 2021 the Institute provided a special 3 percent increase for eligible campus-based employees, graduate students, and postdocs to recognize the remarkable efforts put forth by the Institute community over the course of the pandemic.
MIT will also make resources available to address the high cost of childcare. It is exploring support options for eligible parents, aiming for a January 2023 effective date. More information about this topic will be provided as the details are finalized.
MIT is one of only six U.S. colleges with a fully need-blind undergraduate admissions policy that meets the full financial need of all students, and it continues to be focused on making the cost of an MIT education more affordable.
The 2022-23 undergraduate financial aid program will include enhancements to make MIT tuition-free for families who have typical assets and whose incomes are below $140,000 (previously set at $90,000), as well as additional financial aid dollars that will reduce the amount paid by most families.
“I am so pleased that MIT is able to continue expanding its support for student financial aid,” says Stuart Schmill, dean of admissions and student financial services. “This sends a strong message to students around the world aspiring to come to MIT that we are accessible regardless of their ability to pay, and will make MIT more affordable for many of our current students and families as well.”
Increased budget allocations across the academic and administrative areas will support teaching assistantships; upgrades to classroom technology; competitive startup packages to attract new faculty; administrative staffing to meet local needs; and diversity, equity, and inclusion (DEI) programming. They also address funding needs for PhD students in the School of Humanities, Arts, and Social Sciences (SHASS) and the School of Architecture and Planning (SA+P) — areas where research grants may be less able to support the full costs of attending MIT than in the science and engineering fields.
“We have been working to develop a 12-month financial support plan for students in these schools for many years now,” says Chancellor Melissa Nobles. “This represents a significant annual investment in MIT graduate students, and it adds to the many resources and programs we have created in recent years to address the high-cost of living in Greater Boston and to mitigate short- and long-term financial hardship for our students.”
Strengthening MIT’s research enterprise
Investments in research operations will help enable the MIT community’s pursuit of breakthrough advancements in science and technology. These investments include increasing the central budget subsidy for graduate students funded on sponsored research grants and centrally funding National Science Foundation tuition shortfalls for active fellows to alleviate the funding burden on departments.
The issue of “underrecovery” has been a chronic pain point in research administration and one that was highlighted in the Task Force 2021 report. Over time, sources of research funding have broadened to include a growing share of foundations and industrial sponsors. While federal sponsors have traditionally paid full indirect costs of research — which include essential expenses like space, utilities, and administration — non-federal sponsors often do not fully cover these costs. In these cases, MIT allocates funds from various sources to make up this underrecovery of indirect costs — a challenging and cumbersome process for principal investigators. MIT will dedicate new resources to support this gap and help alleviate the financial and administrative burden it places on departments.
In the area of climate research, the Institute is providing startup funding to support the MIT Climate Grand Challenges. A key element of Fast Forward: MIT’s Climate Action Plan for the Decade, this initiative is an effort to inspire big ideas and mobilize MIT’s research community in developing breakthroughs to help solve the world’s most pressing climate issues.
“Addressing the issue of climate change is an opportunity for MIT to do its best work in solving what are some of our planet’s most pressing problems,” says Provost Cynthia Barnhart. “The Climate Grand Challenges have brought together teams of researchers representing 90 percent of MIT’s departments to do just that. The investments we make this year promise to fuel innovative ideas relating to equity into climate solutions, decarbonizing complex industries, reducing greenhouse gasses, and forecasting climate-related risks.”
Enhancing our physical and digital infrastructure
The Institute’s 2030 capital plan has transformed MIT’s physical campus through new building construction, renovation of aging facilities, utility infrastructure projects, and modernizing building systems. The budget will reserve recurring funding to continue on this trajectory of growth and renewal to support education, research, and student life on our campus.
The Institute’s digital infrastructure is equally essential in supporting campus operations and enabling learning and research on campus. MIT will take a similar multiyear approach to meet current and future needs by initiating a renewal program to modernize academic and administrative IT systems, and improve collaboration technology in classrooms and conference rooms.
The Institute will also take foundational steps in creating a new research computing model and office on MIT’s campus and invest in high-performance computing and data storage and retrieval capabilities. “New investments in research computing resources are essential to meet the growing demand and evolving needs of the MIT research community,” says Maria T. Zuber, MIT’s vice president for research. “By increasing computing capacity, enhancing cloud capabilities, and hiring new professional staff members to provide expert guidance, we’ll ensure that our community has what it needs to carry out transformative research in the years to come.”
A path forward
The endowment is an enduring financial resource that supports MIT scholars of today and tomorrow. As the Institute makes investments in these core areas to address current needs, it must take a balanced approach to ensure it can continue to provide necessary resources for education, research, and innovation well into the future.
“MIT’s spending policy is based on the concept of intergenerational neutrality, meaning the work of supporting the Institute’s mission will be as important in a century from now as it is today,” says Shor. “These current investments will set us on a path to building a stronger MIT — today and tomorrow.”