Princeton University Financial Overview. Carolyn Ainslie Vice President for Finance and Treasurer

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1 Princeton University Financial Overview Carolyn Ainslie Vice President for Finance and Treasurer November 6,

2 Princeton Finance Facts Endowment Driven: Princeton has the highest endowment per student in the Ivy League, providing almost half of the operating budget. Every Student is Subsidized: Educational expenditures are approximately double Princeton s tuition. Robust Financial Aid: 60% of our entering freshman class receive institutional financial aid and all doctoral students are guaranteed tuition and stipend support while fully enrolled. Superb Investment Performance: Over 25 years, the average annual growth rate has been 12%; despite big hit in Strong Research Program: Princeton researchers compete effectively for federal dollars, but the government over time has required an increasingly large co-investment from the University. 2

3 Princeton Finance Facts Labor-Centered: Human capital accounts for more than 40% of Princeton s overall operating expenditures. Strategic Planning for Capital: The University has a multi-year capital plan that focuses on priorities and incorporates the use of reserves to fund projects; re-pay debt; and to endow the cost of on-going operations and maintenance costs. Prudent Cash Management: Accumulated balances and strategic borrowing have positioned the University to address liquidity issues effectively. The Long View: Decisions today are carefully considered for their impact on the University in the long view. 3

4 Two Major Budget Plans Annual Operating Budget Endowment Distributions Capital Plan Endowment 4

5 Operating Budget Revenues FY2013 Auxiliary Activities & Service Income $110,854 7% Student Fees $294,781 20% Gifts / Other Income $123,179 8% Sponsored Research $284,749 19% Endowment Spending Distribution / Other Investment Income $703,753 46% ($s in 000s) Total Income: $1.52 Billion 5

6 Operating Budget Revenues (% of total, including PPPL) 60% 50% Invest. Income Spons Res (no PPPL) PPPL Annual Giving Student Fees Aux Activ. & Service Depts Private Gifts, Grants, and Other Inc. 40% 30% 20% 10% 0% Fiscal Year 6

7 Princeton s Tuition and Fees as a Percentage of its Peers Average Fees 105% 100% 102.4% of 9-School Average Tuition Princeton as % of 9-school average tuition 95% Princeton as % of 9-school average total fees (tuition, room, and board) 90% 85% 89.1% of 9-School Average Tuition 80%

8 Number of Undergraduate Students Percentage of Students on Aid 6,000 $60,000 5,000 $50,000 4,000 $40,000 3,000 2,000 43% 42% 41% 40% 43% 46% 49% 50% 51% 52% 53% 56% 59% 59% 60% $30,000 $20,000 1,000 $10, Students on Aid Students without Aid Total Cost of Attendance Average Scholarship Net Cost of Attendance for Students on Aid $0 8

9 Cost of a Princeton Education Major factors in the cost of undergraduate education Factor Cost ($s in 000s per student) Faculty instruction $30 Undergraduate scholarships $19 Museum, Athletics, Other $6 Library $7 Student services and support $12 Buildings and other indirect costs $18 Total cost of education $92 Tuition as a % of total cost 38% 9

10 The Endowment An endowment is a collection of assets used to generate income for current and future operations A balancing act: spend as much as possible on current students while Preserving the purchasing power for future generations Maintaining a relatively stable spending stream Valued at $17.0 billion as of June 30, th largest endowment in the United States Largest endowment per student 10

11 $ Billions Endowment Market Value Post-1982 Gifts and Inflows Inflated 1982 Endowment Inflated Actual Endowment MV

12 Endowment Spending Rate 0% 1% 2% 3% 4% 5% 6% 7% Fiscal Year Spending Rate Policy Band 12

13 Sponsored Research By Sponsor ($000s, excluding PPPL) 200, , , , , ,000 80,000 60,000 40,000 PRIVATE/OTHER INDUSTRIAL FOUNDATION OTHER GOV'T NASA DOE DOD NIH NSF 20,

14 Operating Budget Expense FY2013 Library & Computing Services 92,081 6% PPPL 82,000 5% Physical Facilities 374,162 25% Academic Departments 551,004 36% ($s in 000s) Total Expense: $1.52 Billion Student Aid 225,513 15% Administration & Student Services 169,427 11% Athletics 23,129 2% 14

15 Summary of Uses in Capital Plan (08-17) Total Uses in Million $ 3,500 3,000 $3, $2, $2, New Building Operations (O&M and MM) Unallocated Projects 2, ,000 1,500 2,308 1,898 2,252 Real Estate Uses New Construction & Renovations 1, Major Maintenance & Annual Programs 0 Sept 2007 Jan 2011 Jan

16 Finance & Treasury Organization Megan Adams Assistant Treasurer and Director of Risk Management Mark Dingfield Director, Finance Administration and Transformation Program Steven Gill Budget Director and Associate Provost for Finance Ken Molinaro Controller Matt Kent Associate Treasurer and Director of Asset Administration Jason Knoch Executive Director of Financial Services and Strategic Initiatives Catherine Kossou Director of Financial Planning Reporting and Analysis Diane Lefebvre Director of Financial Systems, Planning and Management 16

17 Introducing Princeton Prime Financial information and reporting that supports management, compliance, and stewardship. Less time assembling data, more time for analysis and planning. Fewer manual processes, decreasing processing time. Easier to use systems and tools with lower ongoing maintenance needs and costs. 17

18 Scope of Work Redesign and automate core business processes Transform current department financial codes into new chart of accounts Enhance financial reporting and tools Upgrade PeopleSoft Financials Implement budgeting and planning tool Enable all existing tools and systems to work with new chart of accounts Training and Communications 18

19 Contacts Name Financial Service Center 7 New South Carolyn Ainslie, VP for Finance and Treasurer Mark Dingfield Princeton Prime Finance & Treasury website Contact Information finance@princeton.edu; ainslie@princeton.edu prime@princeton.edu 19

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