Steady as she goes.
That’s the synopsis of this year’s financial picture. Naturally, there’s a lot more behind those four words, but if you’re looking for brevity, there it is. All those craving the drilled-down details, read on.
The reverberations of 2008 are still strong for both the world economy and the University. Those reverberations, however, are very different. For the world economy it’s all about headwinds and double-dip paranoia; for the University it’s seeing the results (even four years later) of our careful and focused plan to deal with the many challenges of that year: we have managed capital spending and liquidity, and identified significant, permanent areas of savings across the University. We’re pleased to
report that the strategy continues to reap benefits.
In FY 2012, things were good. Throughout the year the bottom line forecast compared favorably to the estimated budget. There were no unanticipated surges in any major budget drivers, and final results exceeded our original forecasts. Not only that, net operational gain was relatively flat on a recurring basis.
Here Are Some Highlights
- Operating revenues for the year experienced a modest increase of 2.24 percent to $1.68 billion.
- For the year ending June 30, 2012, the endowment had a market value of $1.19 billion and a return of about 0.2 percent, which is consistent with other universities.
- Operating expenses in support of education and research were $881.5 million.
- Sensitive to the economic environment, the University kept the rise in undergraduate tuition low at 3.9 percent, one of the smallest increases since 1970, while the undergraduate financial aid budget held steady at $188 million.
- Total graduate and undergraduate University aid from all sources was $284 million.
- This year a major capital expenditure of $13 million was approved for the renovation of the former Hillel House as an expanded Admissions Visitor Center.
- Additional capital expenditures of $10.7 million were approved for the design and construction of a consolidated Engineering Product Innovation Center.
- The University hired 53 new faculty on the Charles River Campus, including 15 for newly created positions, and 48 new faculty on the Medical Campus during the 2011/2012 academic year.
New pledges totaled $62.5 million in FY 2012, a 75% increase over the previous year—a clear signal that alumni and friends support efforts to enhance BU's already stellar reputation for excellence.
As expected, our research awards remained essentially flat. The University had planned for a reduction of funds from ARRA (American Recovery and Reinvestment Act of 2009).
That’s how much we gave in undergraduate financial aid this year.
A new record for Annual Fund giving! And another sign of the BU community’s support for a range of efforts, from scholarships to faculty enrichment to student life programs.
Please say hi to any of the 53 new faculty on the Charles River Campus and 48 new hires on the Medical Campus.
Increase in alumni donors over past years, even in a down economy.
Support Moves to New Levels
One of BU’s goals over the past few years has been to strengthen the connection between alumni and the University. It must be working. This year more than ever before, alumni and the greater BU community have shown their support in incredible ways:
- Alumni cash giving rose 35.7 percent with the largest gift being $25 million from Rajen Kilachand (GSM’74).
- Trusts and Estates cash giving rose by 57 percent.
- The Annual Fund giving set a record of $8.1 million, a 3.7 percent increase.
- The number of alumni donors rose by 5,405, an increase of 18 percent. This came on top of a 12 percent increase the previous year, for a two-year increase of just over 30 percent.
- Corporate pledges rose by 12.7 percent to $8 million.
- The number of donors to the Class of 2012’s Class Gift was up by 3.8 percent over last year, to a record high of 2,559.
- Parent Fund dollars were up 8 percent to a record high of $1.1 million. Not only that, but the number of Parent Donors increased by 6.3 percent to 3,648.
- One of the most exciting developments was the kick-off of the Century Challenge initiative—whereby BU matches for a century the yield on undergraduate scholarship funds above $100,000. It has generated 21 pledges totaling more than $7 million.
- Six new professorships were pledged and eight professorships reached activation level in FY 2012.
You can learn more about many of these initiatives later in this report.
Suffice it to say that when it comes to BU’s financial engine, we are firing on all cylinders, not only moving year to year capably and confidently, but also helping to manage and fulfill the long-term goals of the University. Rather than being reactive, we are proactive and able to control our destiny a year, three years, five years, even ten years from now. Considering what’s going on in the “real world,” that’s an incredible accomplishment.