Fact Check on Media Reports of Yale SOM's Finances

Recent stories in the New York Times Magazine and U.S. News & World Report have reported on the finances of Yale SOM, calling attention to $15 million in "losses" sustained at the school over a 15-year period. These stories exclude essential context and related facts that were provided. Worse, some assertions are, put simply, untrue.

The New York Times Magazine quoted Dean Edward A. Snyder as saying the school "lost $15 to $20 million over the last 15 years." Both the Times and U.S. News articles implied that these losses were the result of financial mismanagement, and that is false. During years when some older, more well-established schools saw operating surpluses, Yale SOM was making strategic long-term investments, as any enterprise in a growth phase must do, particularly if it wishes to innovate. These small, controlled operating deficits, the last of which occurred in the fiscal year ended June 30, 2008, were the result of deliberate choice. Moreover, these deficits were completely financed by a donor fund that had been established expressly for the purpose of making such investments.

For the past four years, the school's operating budget has been in the black. Yale SOM posted operating surpluses even as other organizations, both commercial and nonprofit, struggled, and in many cases faltered, as a result of the global economic crisis that began in 2008. The school is by no means "bleeding cash," as U.S. News states, nor has it been in a "financial dive."

The U.S. News story raised the question of whether prospective MBA students should be concerned. We hope that this fact check—the timing and rationale of past operating deficits that were covered by donor funds—eases any concerns that may have arisen from the way the media chose to interpret the information they collected. A more thorough look at the school's development shows a thriving organization in the process of expanding its global presence, not a mismanaged one. 

In addition to correcting inaccuracies about Yale SOM's financials, it is important to address another point in the New York Times Magazine piece. That article suggested that, to be successful, Yale SOM would need to shed its reputation for doing good; in other words, abandon our mission of educating leaders for business and society. We could not disagree more. As Dean Snyder recently told the full-time MBA Class of 2014 during their orientation, this mission "is in our DNA." In the most practical terms, our mission means that we produce broad-minded graduates who are adept at working across all sectors—private, nonprofit, government, and entrepreneurial. They understand how diverse organizations, markets, and economies work within the broad context of society. Business and society are inextricably linked, and solving the complex problems of the 21st Century requires leaders who are able to navigate that relationship. Our mission does not set us back; it sets us apart.

When students choose Yale SOM, they choose the business school that is the most connected to its home university. They choose all of the resources of purposeful and eminent Yale University, including its alumni network, the Yale Entrepreneurial Institute, the Jackson Institute for Global Affairs, the Yale World Fellows, best-in-class professional schools and a top-ranked college, and more. They choose the most global U.S. business school, a founding member of the Global Network for Advanced Management, with connections to business schools and enterprises around the world. They choose to learn among a diverse class of global leaders. They choose Yale SOM's integrated curriculum that will teach them to think entrepreneurially and to understand the complexities of management and working across disciplines, sectors, and regions. And in the very near future, when applicants choose Yale SOM, they will also get the opportunity to study on our beautiful new $222 million campus, Edward P. Evans Hall. We believe that these are the important things that will continue to matter to applicants.