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Distributed February 25, 2006
Contact Mark Nickel

The Corporation of Brown University has approved a fiscal year 2007 consolidated budget of $664.1 million, an 8.2-percent increase over FY06. Total undergraduate fees will rise 4.7 percent to $43,754, including a 5-percent rise in tuition to $33,888.

PROVIDENCE, R.I. — At its regular winter meeting today (Saturday, Feb. 25, 2006), the Corporation of Brown University approved a consolidated budget of $664.1 million for fiscal year 2007. That amount – an 8.2-percent increase over FY06 – will sustain momentum for the University’s Plan for Academic Enrichment and support additional investments in faculty, student support and other high-priority areas at a time of rapidly rising costs.

“The trustees and fellows are well aware that the University is contending with steep increases in operating costs, particularly in the cost of energy,” said Brown Chancellor Stephen Robert. “The Corporation remains enthusiastic about the vision that animates the Plan for Academic Enrichment and is increasing the University’s investment in support of the Plan’s highest academic priorities.”

The FY07 budget will fund a net increase of 15 to 25 faculty; support increased faculty compensation, competitive stipends for graduate students and new financial assistance for transfer and resumed undergraduate students; and complete the transition to need-blind admission. (With the Class of 2010, entering next fall, all four undergraduate classes will have been admitted on a need-blind basis.) The increased budget will also allow continued investment in the physical infrastructure of the campus, additional support for University libraries, and expanded use of technology for both academic and administrative areas.

The budget recommendations for FY07 were developed by the University Resources Committee (URC), a 17-member planning body of faculty, students, staff and senior officers that meets year-round. The URC meets with each senior officer to review the budget challenges of various offices, departments and divisions and to understand the opportunities facing the University. The URC also holds periodic open meetings for the entire Brown community. It is chaired by Provost Robert J. Zimmer.

Editors: The URC’s report to the President is currently available from the Office of Media Relations and is online at the Provost’s Web site in PDF format.

“Provost Zimmer and the members of the URC deserve the University’s thanks and appreciation for their careful study and productive discussions,” said Brown President Ruth J. Simmons, who receives the URC report and presents budget recommendations to the Corporation. “Brown’s process for preparing its budget is a sound one that seeks out and considers many different perspectives.”

The University’s consolidated budget includes three separate budgets: University Education and General ($474.2 million, up 7.1 percent over FY06), Biology and Medicine ($115.1 million, up 14.2 percent), and Auxiliary Enterprises ($74.8 million, up 6.9 percent).

Revenue

Tuition and student fees are the largest source of revenue for the University. The Corporation has approved a 4.7-percent increase in total undergraduate charges to $43,754 per year. That includes a 5-percent increase in tuition, to $33,888. Tuition for graduate students will also rise 5 percent to $33,888.

The Corporation also approved an increase of 4.75 percent in payout from the University’s endowment, providing an additional $4.6 million to the revenue side of the budget. University policy specifies that the draw on the endowment should be in the range of 4.5 to 5.5 percent of the endowment’s average market value during the last three years. For FY07, the endowment draw will be about 5.2 percent.

In addition to student fees and the endowment draw, which are the two prominent revenue sources under the Corporation’s direct control, the University also projects revenue from a variety of other sources:

• Indirect cost recovery. Federal agencies and other sponsors of research reimburse the University for some of the overhead costs of conducting research. Total reimbursement for FY07 is expected to increase by 6.3 percent to $30.6 million, reflecting additional research facilities, a larger faculty and an increased volume of sponsored research at the University.
• Annual giving. The Brown Annual Fund has demonstrated exceptional growth in recent years, both in terms of total giving and number of participants. For FY07, the University anticipates an 8.5-percent increase in annual giving, for a total of $35.6 million. Nearly $30 million of that will come from the Brown Annual Fund, with smaller increases in the Brown Sports Foundation and undergraduate financial aid.
• Balances and reserves. The Plan for Academic Enrichment calls for the University to invest as much as $50 million in reserve funds so that the enrichment agenda can move forward while the University undertakes a comprehensive fund-raising campaign. (The $1.4-billion Campaign for Academic Enrichment was launched in October 2005.) The FY07 budget will use $5.9 million in reserves – less than had been planned. At the end of FY07, the University will have used $21 million of the $50-million in reserves originally committed to the Plan.

Expenditures

The URC report noted several factors that created a challenging budgetary environment. Current-year energy costs, for example, had been predicted to rise by 12 percent. They have risen far more steeply, exceeding the budgeted amount by more than $3 million. Double-digit increases will continue for energy costs in subsequent years, accompanied by generally higher costs in construction materials, health care, insurance and other areas.

“Our success in continuing to achieve the objectives of the Plan for Academic Enrichment will be realized through our ability to be thoughtful and deliberate in the face of challenges such as the ones we now confront,” said President Simmons in a message to the Brown community. “I am entirely confident in our ability to do so.”

The budget adopted by the Corporation today provides continued and increasing support for the Plan’s highest priorities:

• New faculty and faculty start-up. More than 75 faculty searches underway this year should result in a net increase of between 15 and 25 faculty members. The Brown faculty should number about 650 at the start of the 2006-07 academic year, its largest size ever. The budget also allocates an additional $1 million for start-up costs to maintain the University’s recruiting competitiveness.
• Faculty compensation. Brown’s efforts to improve faculty compensation have had success in recent years. Salaries of full and assistant professors compare favorably with those of peer institutions. The budget sustains that progress by providing funds to increase faculty salaries by 5 percent.
• Undergraduate financial aid. The Class of 2010, entering next fall, completes the four-year transition to need-blind admissions. The FY07 financial aid budget of $52.7 million will meet the full costs of need-blind admission, with additional support for transfer and Resumed Undergraduate Education (RUE) students.
• Graduate student support. Support for graduate students will rise by 8.4 percent, including an increase in the standard stipend from $17,000 to $18,000.
• New and renovated facilities. During fiscal years 2006 and 2007, Brown will spend more than $200 million on new construction, building renovations and infrastructure upgrades.
• Computing. The budget provides additional support for a major new software implementation that will move online student registration and other information systems to a single software suite. The University will continue to upgrade its computing and telecommunications infrastructure, including extension of wireless facilities.

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