Wednesday, March 5, 2025
Dear Yale Faculty and Staff,
Recent actions taken by the federal government have generated many questions about impacts to our work and community. In keeping with our commitment to sharing significant updates, we write to provide information on Yale’s current financial outlook and to ask for your help as we navigate a rapidly evolving landscape for all of higher education.
As we last reported to you in December 2024, Yale began the year in a good financial situation. However, recent federal actions that affectU.S. institutions of higher education suggest that the university—along with peers across the country—may face serious financial challenges in the coming months. If enacted, measures such as an increased tax on university endowments or cuts to federal research funds would have a profoundly negative impact on Yale’s finances and resources. Given these possible outcomes, it is important that we move forward with a shared understanding of plans to advance Yale’s mission.
We do not yet know whether or when many of the possible federal actions will take effect, nor do we know the scale of their impact. Considering these uncertainties, our approach to managing the university’s finances will be thoughtful and measured.
Later this month, the university will begin the annual budget process, which will lead to the creation of Yale’s budget for the 2026 fiscal year. As a part of this process, we, together with the faculty and staff members of the Budget Advisory Group, will carefully review budget proposals from the university’s schools and units. This year, we have asked the leaders of all schools and units to prepare their budgets for the next fiscal year, assuming a standard set of budget parameters. However, we have also asked these leaders to engage in contingency planning by describing actions that might be necessary if federal policies were enacted that significantly reduce university revenue. This approach allows us to proceed in the face of uncertainty. We will advance Yale’s mission based on current law while preparing to pivot in the event that circumstances change.
Given the gravity of the current situation, we have decided there is a need to move more cautiously in the following ways:
- Capital Projects: We are reviewing the university’s capital projects to consider where delays to planned renovations and new construction may be warranted until we have greater clarity on the financial implications of federal actions.
- Salary Increases: We anticipate salary increases in the upcoming cycle for faculty and managerial and professional staff to be more modest than in previous years.
Because a reduction in university revenue will affect all areas of campus, we are looking for schools and units to assist with the following:
- Spending Restraint: We ask deans and other university leaders to carefully review significant multi-year commitments and slow non-salary expenditures where possible.
- Hiring Restraint: We also ask these colleagues to review ongoing and planned faculty and staff searches to ensure that these roles are necessary for executing essential activities given the current environment.
Be assured that university leaders and trustees are advocating for higher education and planning for many scenarios. There is a profound understanding of what is at stake for Yale, higher education, and the world. Despite the great uncertainty ahead of us, we affirm our commitment to the crucial work you do to create and share knowledge, promote the free exchange of ideas, and serve society.
Thank you for your part in carefully stewarding Yale’s resources as we navigate this challenging time together. As we learn and know more, we will provide additional updates, keeping you informed of plans to preserve and protect our mission.
Sincerely,
Scott Strobel
Provost and Henry Ford II Professor of Molecular Biophysics and Biochemistry
Jack Callahan, Jr.
Senior Vice President for Operations
Stephen Murphy
Vice President for Finance and Chief Financial Officer