PROVIDENCE, R.I. [Brown University] — At its regular winter meeting, Saturday, Feb. 7, 2015, the Corporation of Brown University approved a consolidated budget of $976.4 million for fiscal year 2016, recommended by President Christina Paxson. The budget anticipates revenues of $964 million with another $7.5 million in one-time revenue. The University will draw on its unrestricted reserves to cover the remaining $4.4-million deficit.

“The budget approved for fiscal 2016 achieves a careful and important balance between addressing structural problems and their attendant deficits and maintaining the University’s momentum toward important strategic goals,” Paxson said. “We will continue to make investments in student support, the growth of our research enterprise, educational innovation, and academic excellence as we develop the revenue sources that will eliminate the deficit and sustain the University well into the future.”

In recent years, a greater than expected decline in federal research funding and unexpected growth in financial aid costs have led to operating deficits. Brown is committed to eliminating these deficits and has made steady progress, reducing them from $8.8 million in fiscal 2014 to an expected $6.7 million in the current year and to $4.4 million in 2016. The University intends to draw on reserves through fiscal 2018 to offset short-term deficits while structural adjustments take effect.

A Deficit Reduction Working Group chaired by Richard Locke, director of the Watson Institute, and Ravi Pendse, the University’s chief information officer, has been charged with identifying opportunities for reducing expenditures and enhancing revenue. The group has begun its work and will present its report and recommendations later this spring, including recommendations to reduce spending by at least $7 million.

Budget recommendations are developed for the President during the year by the University Resources Committee, a 23-member body of faculty, students, administrators, and staff chaired by Provost Vicki Colvin. The URC prepares recommendations for a budget that comprises four major divisions. The fiscal 2016 budget includes:

Education and General ($637.9 million)
E&G includes nearly all academic operations and infrastructure with the exception of the Division of Biology and Medicine, the School of Public Health, and the School for Professional Studies.

Biology and Medicine ($132.0 million)
The Division of Biology and Medicine includes the Alpert Medical School and biological science departments.

School of Public Health ($46.1 million)
Established by the Corporation at its February 2013 meeting, the School of Public Health is midway through its second academic year.

Auxiliary Operations ($148.0 million)
Auxiliaries include the bookstore, dining services, dormitories, Health Service, and the School for Professional Studies.

The full URC report is available online at the Provost's office.

Budget: Revenue highlights (E&G budget)

Tuition and fees
Tuition and fees is the largest source of University income, comprising nearly half of gross revenues. The total undergraduate charge for 2015-16 will rise 4.4 percent to $62,046. Undergraduate tuition will rise 4 percent to $48,272; room and board together will rise 5.9 percent to $12,700; and other fees will rise 4.7 percent to $1,074. Tuition for Ph.D. and on-campus master’s students will rise 4.0 percent to $48,272. Tuition at the Alpert Medical School will rise 4 percent to $53,416.

The undergraduate student body will increase slightly to 6,270, as anticipated in the University’s strategic plan, Building on Distinction.

Endowment and annual giving
Brown’s endowment will provide $125.3 million for the fiscal 2016 budget, an increase of $7.4 million over the current fiscal year. At the end of the 2014 fiscal year last June, the market value of Brown’s endowment rose above $3 billion, a year-end total that surpassed the previous all-time high of $2.8 billion, which Brown posted on the eve of the financial crisis in 2008. The endowment’s 10-year average return is 8.3 percent.

Alumni, parents, and friends of Brown University provide significant annual support. For fiscal 2016, the University Advancement Office projects a total of $40.6 million in gifts of current-use funds to the Brown Annual Fund, the Brown Sports Foundation, and financial aid. That would represent a 2.5-percent increase over the projected total for the current fiscal year, ending June 30.

Research
Budget constraints, sequestration, and other disruptions at the federal level have had an impact on federally funded research. Brown’s total research expenditures declined 14 percent from a high of $135.9 million in fiscal 2012 to $111.8 million in fiscal 2014. There is evidence of improvement. The total amount of new grant proposals rose in fiscal 2014, and dollars awarded during the first half of the current fiscal year were up 29 percent compared to the same period of the previous year.

Research institutions receive indirect cost recovery to help support research facilities, staff, and services, calculated as a percentage of direct spending. Brown’s fiscal 2016 budget anticipates a 1-percent increase in indirect cost recovery to $39.8 million

Other income: The School of Professional Studies
Brown’s School of Professional Studies has developed executive master’s degrees for mid-career professionals, using a blended format that combines online instruction with intensive residential components. It currently offers two such programs, an Executive Master of Business Administration, in partnership with the IE Business School in Madrid, and an Executive Master of Healthcare Leadership. In addition to purchasing residential, dining, facilities, and other services from the University, the School of Professional Studies provides resources to the University’s general budget. For fiscal 2016 those contributed resources are expected to total $6.5 million.

Budget: Expenditure highlights (E&G)

• Undergraduate financial aid. The financial aid budget will rise 8 percent to $112.5 million. (See separate release.)
• Compensation. The salary pools for both faculty and staff will rise by 2.75 percent, including merit increases, promotions, and equity adjustments.
• Startups. A $2.2-million increase to the startup budget helps newly recruited faculty establish their research programs.
• Doctoral students. An increase of $2 million will provide additional support beyond the fifth year, a modest increase in nine-month stipends, and additional summer support for students in humanities and social science programs.
• Development. A $1.4-million increase will support additional fundraising staff and operating expenses as the University expands its development effort.

Acceptance of gifts

University policy requires that the Corporation formally accept gifts of $1 million or more. At its business meeting Saturday morning, the Corporation accepted or ratified previous acceptance by its Advisory and Executive Committee of 13 gifts totaling more than $63 million. These include:

• From anonymous donors, a pledge of $20 million, of which $10 million will support the School of Engineering and $10 million will support various designations, including the Rockefeller Library, Middle East Studies, the Center for Latin American and Caribbean Studies, Financial Aid, Brown Athletics, and the Brown Annual Fund;
• From an anonymous donor, a pledge of $15 million to establish the Resumed Undergraduate Education Financial Aid Fund (see separate release on financial aid);
• From the Sidney E. Frank Foundation, a grant of $10 million, of which $5 million will enhance the existing Sidney E. Frank Endowed Scholarship Fund, $3,778,653 will create the Sidney E. Frank Scholars Endowed BrownConnect Fund, and $1,221,347 will provide annual support to enable each Frank Scholar to participate in a summer internship or a summer teaching or research collaboration during their time at Brown (see separate release on financial aid);
• An anonymous pledge of $4 million to support a professorship in policy at the Watson Institute for International Studies;
• From anonymous donors, gifts and pledges totaling $2.5 million of which $1.5 million will support postdoctoral fellowships in the Watson Institute for International Studies; $750,000 will support upgrades in performance spaces used by students in the Department of Theatre Arts and Performance Studies; and a $250,000 gift previously received will help endow a new coaching chair in men’s rugby;
• From Santander Bank, a gift of $2.25 million to support programs in the Brown International Advanced Research Institutes (BIARI);
• From Mr. and Mrs. Shelby M. C. Davis, a grant of $2,133,159 for continued support of the Davis United World College Scholars Program at Brown University;
• From anonymous donors, a gift of $2,003,354 to establish, effective immediately, an assistant professorship in music;
• From Mr. and Mrs. George Lindemann, Brown parents, a pledge of $1.5 million to support the Political Theory Project at Brown University;
• From Mara Berkman Landis, a 1989 Brown graduate, and Dean Landis, a pledge of $1,125,000 to provide four years of current-use support to the Warren Alpert Medical School for medical education and research on the topics of patient healing, self-efficacy, and vitality;
• From Robert J. Carney, a 1961 Brown graduate and University trustee, and Nancy D. Carney, an additional commitment of $1 million, increasing their recent gift to $2 million in support of the Robert J. and Nancy D. Carney Innovation Fund for the Brown Institute for Brain Science II;
• From Norbert P. Donelly, a 1973 graduate and Brown parent, a gift of $1 million to The Donelly Family Scholarship Fund II;
• From Paul J. Salem, a member of the Class of 1985, and Navyn Salem, a pledge of $1 million to support post-doctoral research at the Brown Institute for Brain Science, the Athletic Director's Excellence Annual Fund, and the Brown Annual Fund.