Diversifying and Expanding the University’s Sources of Revenue
The ambitious goals of the Plan for Academic Enrichment require unprecedented financial support from alumni, government funding sources, corporations, foundations, parents, and friends to increase revenue. The University launched Boldly Brown: The Campaign for Academic Enrichment in 2003 as a seven-year comprehensive fundraising drive to support the University’s strategic objectives.
The economic climate that has persisted since the market turmoil in 2008/2009 has required us to reassess and revise our financial and capital plans even while we continued to focus on our overall PAE objectives. Brown has responded to the dramatically changed environment carefully and thoughtfully. We have done so in three phases. The first involved salary freezes, staff hiring freezes, budget cutting and revising our capital plans. As a result of these actions, we were able to reduce projected expenses by over $35 million in Phase 1. Phase 2 required more significant organizational change. The Phase 2 work involved a review and restructuring of administrative functions, a voluntary retirement incentive program, some layoffs and the decision to increase revenues from continuing education and slightly increased enrollment. We were able to identify an additional $30 million from reductions and increased revenues in Phase 2. Phase 3 is currently underway. In this phase, we will be looking for new sources of revenue (on-line continuing education, master’s programs, post-campaign fundraising) in order to provide support for the PAE. The Phase 3 planning process should result in some new approaches to diversifying and expanding the University’s sources of revenue.
Over the same period, the Corporation Committee on Investments and Investment Office staff have worked diligently to ensure continued success in the management of the endowment. Working together, they managed the endowment through the collapse of the financial markets - maintaining adequate liquidity, selling off less promising assets and capturing some of the opportunities that the markets presented. They have modified the allocation of assets to reduce risks and potential volatility while maximizing returns. We remain confident that they will continue to serve Brown well as the economic challenges continue.
By all measures, the Campaign for Academic Enrichment was an impressive success with the $1.4 billion goal being exceeded 19 months ahead of the Campaign’s end date on December 31, 2010. With final campaign accounting completed January 10, 2011, President Simmons announced the successful conclusion of the Campaign, which reached $1.61 billion, or 115 percent of its goal.
The Campaign’s success fueled many critical objectives of the Plan and provided the necessary funding for Brown to increase the size of the faculty, establish need-blind admission and strengthen financial aid for all students, enhance resources to advance scholarship, research and teaching and create an infrastructure that fosters cutting-edge research and outstanding teaching. Together, the Plan and the Campaign provided the excitement and momentum for Brown to achieve historic growth in fundraising revenues and alumni engagement as evidenced by record-breaking cash gifts, a robust pipeline of new pledges and planned gifts, heightened volunteer leadership and engagement, and increased alumni and parent participation.
The Campaign successfully increased gifts and grants from all of Brown’s constituencies, with the number of donors to the Campaign exceeding 69,000, including record-setting participation by parents who are not Brown graduates. The Campaign broadened and deepened the University’s community of donors, highlighted by the fact that 36% of the gifts during the Campaign were from first-time donors to Brown. New gifts and pledges to the University during the Campaign, which is considered the most accurate measure of any university’s fundraising progress, increased almost three times compared to the seven-year period prior to the Campaign. During the Campaign period, Brown averaged over $200 million a year in new gifts and pledges, and over $166 million a year in cash receipts. The Brown Annual Fund, a critical funding mechanism for the PAE, provided $35.4 million in cash contributions during fiscal year 2011, representing an 80% increase from the amount raised for BAF in fiscal year 2003 ($19.7 million).
As PAE goals extend beyond the Campaign, Brown will continue to seek ways to fund its ambitious plans. Securing gifts to launch specific capital projects, as well as endowment for professorships and scholarships, remains a priority, but the comprehensiveness of the Plan requires a comprehensive approach to attract increased support from a variety of new and existing sources of revenue.