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Friday, October 2, 2020

CLA budget facts 1001

Over the past six months, you’ve been hearing frequently from me and from President Gabel about college and University finances, respectively. Those communications have focused on the pandemic’s fiscal impact. 

Recently, the Chronicle of Higher Education published an article by Allison Vaillancourt that took a step back from pandemic-influenced finances for a more general examination. The article is titled “What if Everyone on Campus Understood the Money?

Ms. Vaillancourt reports that, “Whenever I give talks on this subject to higher-ed audiences, I often ask them to take a pop quiz about their own institutions. . . . Most faculty and staff members — and a significant percentage of academic and administrative leaders — struggle to provide correct responses to all or even most of those questions.”

In the interest of helping you achieve a passing grade, here are the questions and the answers most relevant from a college-level (rather than university-level) perspective. I know: nothing better for a Friday than a pop quiz. 

  1. What was the annual revenue of your institution in the last fiscal year? What percentage of that was tuition? 
    • $277m non-sponsored (i.e., primarily non-grant)
    • 73%
  2. What were your college’s top three sources of revenue?
    • Tuition (73%), state appropriations (17%), earnings on donated funds/gifts (5%)
  3. What was the total amount spent on faculty and staff salaries last year? And the total cost of annual benefits?
    • $100m salary expense, excluding graduate assistants; $117m if graduate assistants are included as staff employees
    • $36m fringe expense, excluding students; $49m if students included
  4. How much was spent on debt service and utilities?
    • $7m combined (debt service and utilities each about $3.5m)
  5. What was the published figure for undergraduate tuition? What was the average undergraduate student debt?
    • Resident: ~$13,300; Non-resident non-reciprocity: ~$31,600
    • $26,000 for those who graduated with debt. (Note: In good exam-taking form, I answered the question I wanted to answer rather than the Chronicle’s original question, which was “What was the average price students actually paid?” That question is more relevant for private institutions.)
  6. What was the size of the endowment at the end of the fiscal year? What is campus policy on the percentage of the endowment that can be withdrawn annually to fund institutional needs?
    • $302m
    • 4.5% of the previous five years' trailing average of principal fund balance, per University of Minnesota Foundation policy; thus, a $1m endowment fund would annually produce $45,000 to spend
  7. What percentage of the alumni donated money?
    • 5-7% of CLA alumni donate to the U each year; about 2% of alumni give directly to CLA; 15,000 alumni have donated during the current fundraising campaign

Please carry this list with you at all times, just in case you happen to walk into a Chronicle of Higher Education workshop. Quiz your kids. Regale family and friends at Thanksgiving dinner. The possibilities are endless. And if this short quiz has whet your appetite for more data, check out the Data Page on the Neighborhood.