Re: Pricing of Journals

On 25 Jan 1999, Bert Boyce <lsboyc[_at_]lsuvm.sncc.lsu.edu> wrote:
>
> On 01/22/99, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
> >
> > In the New York Times (Oct 21, 1998:B9) Karen W. Arenson reports that
> > wealthy universities are beginning to loosen their purse strings as
> > endowments soar. Why don't they restore their library collections?
> >
> > In constant dollars, endowments of 71 research universities doubled
> > between 1986 and 1997 -- nine years. Their library collections and
> > educational programs did not do anywhere near as well, did they?
>
> Well the endowments have certainly grown. It would have been
> criminal if they had not in the current investment environment. If you
> count their growth as income, then I guess the Universities are hoarding
> that income. However, since the endowed funds in my School are all in
> scholarship funds (except for one small $25,000) account whose earnings
> may be expended in an unrestricted manner, and I can't touch the growing
> principle, only the increased earnings, and those only for the purposes
> for which they were originally contributed, we just increase the size of
> the scholarships when we can. It is just unclear to me where I get
> these endowment dollars to buy books.

I was not counting endowment growth as income. I indicated that revenue in excess of expenditures must go to the endowment since there could be no distribution to shareholders, as in a for-profit organization. Or perhaps, in the case of public institutions, it should go back to the treasury.

You should get surplus revenue dollars by increasing expenditures to equal revenues. Dept. of Education figures for the state of Louisiana, for instance, indicate surplus revenues of $9 million in FY94 and $59 million in FY95. You would probably need only a small fraction.

Going back 20 years in the Digest of Education Statistics, one cannot find a single year in which public or private higher education ran in the red. Instead, we see surplus revenue (in constant dollars) tripled while library spending increased by one third!

During that 20-year period, spending on academic research more than doubled. Library spending actually dropped one year, (from FY 85 to FY 86), aggravating the library crisis while profits climbed.

I cited the NY Times article simply to suggest that administrators may be beginning to recognize the insanity of their record.

Albert Henderson
Editor, PUBLISHING RESEARCH QUARTERLY
<70244.1532[_at_]compuserve.com> Received on Tue Jan 26 1999 - 17:05:43 GMT