Financial History Primer

                                                           Primer on the Financial History of  Barnard College

Terms of the Trade:

Endowment: the capital resources initially acquired as gifts  college has in a form – principal — that it can be invested in (mortgages, bonds, stocks) and from which an annual return/interest/rent can be expected ;

generally excludes academic buildings and dormitories and other property used for academic purposes (and therefore not “liquid”); but does include property that can be leased or rented or sold.

Restricted endowment: That part of the endowment the interest on which can only be used for a specific purpose stated by the donor (e.g., to pay for an endowed professorship; to support financial aid; for campus upkeep);

Unrestricted endowment: When the benefactor places no restrictions on the use of the interest generated by her/his endowment gift.

“Quasi endowment”: That part of the endowment that has accumulated in the form of unspent returns on investment of unrestricted or quasi endowment; this is treated like unrestricted endowment and can be spent to cover operating expenses.

Endowment gifts come from individuals, corporations and foundations- receiving institution obliged to protect/maintain the principal and only spend the interest – not “invade the principal”

Endowment grows by endowment-designated gifts to it and by plowing back some of the returns on investment into the “quasi endowment”

Operating budget — budget that covers the expected expenses/expenditures of a given fiscal year (July to June) and the expected income/revenues of that year. When the anticipated expenses and income  match, the budget is said to be in balance. When expenditures exceed income, the budget is in “deficit” by the net difference. When income exceeds expenditures, budget is operating “in the black” or with a”surplus.”

Capital Budget – a separate budget to be used for long-term, multi-year projects. For much of its history, Barnard operated without such a budget, with “capital expenses” coming out of the operating budget

Barnard’s major sources of revenue: http://barnard.edu/sites/default/files/inline/financial_0.pdf

FY 2015 – Budget of $150,000,000 [ simplified here]

Income
Tuition — 60% — 2500 x $38,000 –> $95,000,000
Auxiliary Income sources — 20%  –> $30,000,000 [dorms; food services; store]
Gifts not  for endowment — 10% –> $15,000,000
Federal and state support — 5% –> $7,500,000
Interest on endowment of $250,000,000 –> 5% — $7,000,000

Expenditures
Financial Aid — 20% –> $30,000,000
Auxiliary Expenses — 20% –> $30,000,000
Instructional expenses — 30% –> $45,000,000 (mostly faculty salaries and CU transfers
Other Services — 27%  –> $40,000,000 (Library, student services, IT…) –>
Research Costs — 3% –> $5,000,000 (administering grants
Take note of:

1. Barnard’s heavy reliance on tuition and fees (60%) to cover expenditures and very modest contribution to expenses coming from income generated by endowment (5%) Makes Barnard  “highly tuition-dependent”)
[in 2009-10, Wellesley covered almost 1/3rd of its expenditures ($227 million) with endowment income ($86 million)]

2. Auxiliary income about the same as auxiliary expenses ; not a net source
of revenue — “a wash”

3. Tuition Income ($95 million) – Financial aid ($30 million) =
Net tuition income –> $65 million
Financial Aid ($30 million) as % of  Tuition income ($95,000,000) =
Discount Rate –> 31%

In 2010 — $88 million – $26 million = $52 million à “discount rate” = 26/88 = 29%

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Early major designated gifts to Barnard:
1892 – Mary E. (Mrs. Van Wyck) Brinckerhoff – $100,000 for a building on Morningside
Heights if land acdquired by other donors (opened in 1897)
1894 – 1895 — Fundraising in increments of $5000 to $25000 raised $120,000 to acquire
119th/120th Street land
1895 — Elizabeth Milbank Anderson – $160,000 for a second building  (opened in 1897)
1897 – Martha [Mrs. Josiah] Fiske — $100,000 for a third building (Fiske Hall opened in
1898)
1902– Gift of 116th-118th Street land to Barnard — acquired by Mrs. Anderson at cost of
$1,000,000
1906 — Gift of Mrs. Anderson of $160,000 to build Brooks Hall
1908 — Estate of Miss Emily Gibbes of $500,000
1915 — $500,000 gift of Jacob Schiff – to construct Students’ Hall (later Barnard Hall)
1918 — Estate of Horace Carpentier — $800,000 for  student financial aid

Few individual major gifts  during 1920s and 1930s
1928 — Joline Foundation gift for an endowed chair in music
1934 — Alumnae Annual Fund initiated
1937 — John D. Rockefeller Jr. gift of Claremont Avenue property to Barnard (now
Interchuch Center)

Post- WW II Major Gifts
Barnard Annex
Wollman Library/Lehman Hall
Reid Hall
McIntosh Student Center
Plimpton Hall
Altschul Science Center

Endowed chairs – McIntosh/Altschul/Robb/Milbank….

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