<p>At its regular February meeting today, the Corporation of Brown University approved a 3.2-percent increase in the University’s consolidated operating budget for the 2013 fiscal year. Total tuition and fees will rise 3.5 percent. The financial aid budget will reach an all-time high.</p>

PROVIDENCE, R.I. [Brown University] — At its regular winter meeting Saturday, Feb. 11, 2012, the Corporation of Brown University approved a 3.2-percent increase in the consolidated operating budget for the 2013 fiscal year. As presented by Brown President Ruth J. Simmons, the budget anticipates expenditures totaling $865.2 million, with revenues of $855.8 million. The University will close the deficit by drawing more than $9 million from reserve funds.

The budget includes $90.1 million for undergraduate scholarships. It also allows Brown to expand its research programs, continue the growth of the School of Engineering, and increase financial support for graduate and medical students.

“The budget presented by President Simmons and approved by the Corporation today will maintain momentum on key academic priorities despite a difficult economic climate and significant restraints on resources,” said Brown Chancellor Thomas J. Tisch. “Brown will honor its commitments to improving student financial aid, invest in its academic programs, and prepare its libraries, information technologies, and other campus infrastructure for the future, while keeping the tuition increase modest.”

Total undergraduate charges — tuition, fees, room and board — will rise 3.5 percent to $55,016. Following an 8.3-percent increase in the current year, the undergraduate financial aid budget will increase another 2.1 percent to $90.1 million in the 2012-13 academic year to sustain improvements in financial aid and the lowering of student indebtedness. About 43 percent of undergraduates will receive University scholarship grants in fiscal 2013, with an average package of about $36,000, including Pell Grants. Graduate tuition would rise 3.6 percent to $42,808, and tuition for the Alpert Medical School will increase 5 percent to $47,480. The budget provides for a 5-percent increase in Ph.D. stipends and a $1-million increase in the medical student financial aid budget.

“I’m particularly pleased that the budget approved today will continue to emphasize the importance of financial aid and that even in very difficult economic conditions the University will continue its investments in academic excellence now and in the longer term,” said Brown President Ruth J. Simmons. “These areas remain among the University’s highest priorities.”

The University Resources Committee, a 17-member body of faculty, administrators, staff and students, is responsible for developing annual budget recommendations for the president, who proposes a budget to the Corporation. It is chaired by Provost Mark Schlissel, who releases the URC report on his website following the Corporation’s action.

Revenue Highlights

  • Tuition and fees. The University relies on tuition and fees for more than half of revenue in the Education and General Budget. For 2012-13, tuition will rise 3.6 percent to $42,808; room and board will rise 3.2 percent (to $6,974 for room, $4,284 for the standard meal contract); and fees will rise 5.3 percent (health fee to $672 and student activities fee to $214; the recreation fee will remain unchanged at $64). Total undergraduate charges will be $55,016, an increase of 3.5 percent.
  • Endowment and fundraising. The Corporation’s spending rule requires the annual endowment payout to be within 4.5 to 5.5 percent of the endowment’s three-year average market value. The endowment payout for fiscal year 2013 will be at the top end of the spending rule and is expected to total about $104.9 million, providing about 16.5 percent of revenue for the Education and General budget. The end of a capital campaign, a presidential transition, and continuing economic conditions led the URC to reduce its revenue expectations from annual giving by 4.4 percent to just under $40 million. Annual giving remains at a significantly high level in spite of the campaign’s end.
  • Sponsored research. Federal stimulus funding through the American Recovery and Reinvestment Act has run its course, and there is continued uncertainty about the federal budget for research. The URC report assumes a somewhat reduced level of grants and contracts for fiscal year 2013. Most research funding includes both direct support for research and reimbursement for overhead costs (facilities, administration, infrastructure). The University’s negotiated reimbursement rate for such “indirect costs” is currently 62 percent of direct costs. The 2013 budget anticipates an overall decline of 3.8 percent for indirect cost recovery, down $1.7 million.

Expenditures

  • Financial aid. For more than a decade, Brown has been expanding its programs of student financial aid. It has expanded the percentage of undergraduates receiving University scholarship grants from 35 percent in 2001-02 to 43 percent in the current year, and it has more than doubled the average size of the University scholarship, from $16,288 in fiscal year 2002 to an estimated $36,000 in fiscal year 2013, including Pell Grants. The exact amount of financial aid needed for a given year cannot be predicted with complete accuracy. The $90.1-million financial aid budget for fiscal 2013 is 5 percent greater than this year’s actual expenses.
  • Faculty and staff compensation. With 3,800 employees, compensation for faculty and staff constitutes approximately half of the Education and General Budget. In the years since the financial crisis of 2008-09, Brown has returned to its earlier effort to improve the competitiveness of salaries. For fiscal 2013, as for fiscal year 2012, the Corporation has approved merit increase pools for faculty and staff, with additional funds to address competitiveness, equity, and promotions. An additional allocation will fund the first part of a two-year effort to bring salaries for coaches and athletic staff to an appropriate range with peer institutions. The Tuition Assistance Program, a popular benefit for the children of faculty and staff that provides $10,000 per year per child to ease the cost of college, will receive an additional $600,000 to bring the program’s funding into line with actual usage.
  • Academic programs: School of Engineering. Growth of the Brown School of Engineering, formally established in 2010, continues as a high priority for the University. Plans for the next five to 10 years call for increased revenues from sponsored research, fundraising, graduate programs at the master’s degree level, and corporate partnerships. For fiscal year 2013, the Corporation has allocated funds to recruit three new faculty and to add technical staff.
  • Academic programs: Graduate School. The Corporation authorized funds to increase the base academic year stipend for Ph.D. students to $21,500. The University will continue to provide fully paid health care for Ph.D. students, costs for which will increase 10 percent in fiscal year 2013.
  • Academic programs: Research. As part of the University’s effort to develop the School of Engineering, the Corporation approved a new position in the Technology Ventures office within the Office of the Vice President for Research. That position will focus on patents and technology transfer activities related to engineering. The University will also add a position in the Center for Computation and Visualization that will work with scholars in the humanities and social sciences, extending the benefits of Brown’s high-performance computing facilities more widely across campus.

Budget background

The University’s consolidated budget includes three separate budgets:

  • Education and General — By far the largest of the three, E&G includes revenue and expenditures for the undergraduate College and the Graduate School — everything except the Division of Biology and Medicine. E&G expenses for fiscal 2013 are budgeted at $641.1 million.
  • Biology and Medicine — The Biology and Medicine budget includes revenue and expenditures for the Warren Alpert Medical School and for academic activities of campus-based life sciences and public health departments. Biology and Medicine expenses for fiscal year 2013 are budgeted at $159.9 million.
  • Auxiliaries — The auxiliary budget includes a variety of campus services — dining, dormitories, bookstore — that raise sufficient revenue to cover their operating costs without University subsidy. Auxiliary operations for fiscal year 2013 will come to $87.5 million.

Other actions of the Corporation

Support for Providence

In her customary report to the campus community following the Corporation meeting, Simmons wrote, “With regard to the City, the Corporation reaffirmed the importance of financial support for the city consistent with the University’s needs and commensurate with our resources. I reported on the now productive and positive discussions with the City and State leadership to determine the exact nature of the University’s contributions beyond what is already being provided. The Corporation considered various scenarios and options for assisting the city and, providing guidance on how to proceed, strongly endorsed the continuation of discussions to identify as soon as possible a suitable plan.”

Acceptance of gifts

By University policy, all gifts of $1 million or more require formal acceptance by the Corporation. At its Saturday business meeting, the Corporation accepted or ratified previous acceptance of a number of gifts totaling $28.6 million. These include:

  • from anonymous donors, a gift of $10 million of which $9 million is for three endowed professorships in the School of Engineering and $1 million for the Center for Latin American and Caribbean Studies;
  • from an anonymous trustee of the Corporation, a gift of $10 million for the School of Engineering;
  • from Pablo J. Salame, a 1988 graduate, a gift of $3 million for the Pablo J. Salame ’88 Goldman Sachs Professorship in Computational Neuroscience at Brown University;
  • from an anonymous donor, a gift of $1.5 million of which $125,000 is for the Brown Annual Fund Scholarship Fund, $375,000 for the Brown Annual Fund, $250,000 for the Brown Medical Annual Fund, $500,000 for the Engineering Dean’s Discretionary Fund, and $250,000 for the Political Theory Project;
  • From the Sidney E. Frank Foundation, a grant of $1.1 million for the establishment of an endowed scholarship fund to be known as the Ruth J. Simmons Scholarship Fund;
  • from Steven Price, a trustee and 1984 graduate, a gift of $1 million to support the medical school building and to name the Margery Price P’84 Lounge;
  • from Robert J. Carney, a trustee and 1961 graduate, and Nancy D. Carney, an additional gift of $1 million to the Robert J. and Nancy D. Carney Fund for Scientific Innovation to support research in neuroscience;
  • from donors who wish to remain anonymous, a gift of $1 million of which half is for the Brown Annual Fund and half is pending designation.

Capital projects

Members of the Corporation gathered Friday evening with the campus community to celebrate the rededication of Metcalf Laboratories as the new home for the Department of Cognitive, Linguistic and Psychological Sciences.

The Corporation’s Committee on Facilities and Design approved a recommendation that a Slavery and Justice Memorial designed by Martin Puryear be placed on the front campus between Hope College and Carrie Tower.

The Corporation’s Committee on Budget and Finance authorized construction for several projects, including:

  • renovation of Hunter Laboratory as a laboratory for environmental programs and additional research space;
  • improvement of athletic fields for field hockey and other sports;
  • renovation of the reading room in the John Hay Library;
  • residence hall renovations this summer in Miller, Metcalf, Andrews and Keeney Quadrangle;
  • transformation of Andrews Dining Hall into a student commons, and further renovations in Keeney, Emery-Wooley, Hope College, Hegeman and the Vartan Gregorian Quadrangle.