The Gustavian Weekly

Senate discusses financial budget

By Sophie Panetti Staff Writer | December 6, 2013 | News

In order to keep students and faculty fully aware of the financial state of the college, the Gustavus Student Senate sponsored a Financial Transparency Forum on Nov. 21 hosted by Vice President of Finance Ken Westphal. Student Senate Co-Presidents, Matt Timmons and Danielle Cabrera, invited Westphal to speak after the successful turnout at last year’s event.

Key points of the meeting included how Gustavus generates revenue, where that revenue is spent, and why.

“Gustavus generates revenue from tuition, donations, gifts from alumni, things like that,” Timmons said. “We strongly rely on donors and alumni.”

Westphal explained how the budget was managed, and summarized financial information from the May 31, 2013 audit. Westphal stated that the endowment had risen to $121 million, an increase of several million dollars from last year, and the College had $55 million in debt. These figures gave Gustavus a stable A3 rating in the latest financial rating by Moody’s Investors Service.

The formation of the Gustavus budget was also a topic of conversation.

“The Internal Budget Committee creates an internal budget, then sends it to the President’s Cabinet for approval. Once it’s approved, it’s sent to the budget committee, then on to the Institutional Resources group, and finally to the Board of Directors for final approval,” Cabrera said.

Additional topics included operating revenues, operating expenses, and investments. Around half of all College revenue is generated from tuition, 25 percent from housing, 14 percent from gifts, and 5 percent from endowment returns. The majority of this revenue—60 percent—is directed to workers’ compensation for faculty, staff, and administrators.

Gustavus employes around 100 individual managers to invest its endowment in approximately 30 different mutual funds. Last year, the return on investment was about 16 percent. Westphal broke down the College’s investments to 26 percent domestic equity (stock in the United States), 22 percent international equity, 17 percent private equity, 10 percent long/ short equity (high risk-high gain investment), 15 percent fixed income, and 10 percent real assets.

Westphal opened the forum to an extended question-and-answer session at the end, answering students’ economic-related questions. One student inquired about the possibility of moving investments in mutual funds to exchange traded funds (ETFs), which are sector-based investments. Another student expressed interest in adding a position for a student representative on the Internal Budget Committee.

Many questions were also posed on fossil fuel divestment by members of environmental justice organizations on campus, including Gustavus Greens, Divest Gustavus, and Power Shift. These students have been collaborating to divest Gustavus from fossil fuel investments and educate the student body on the issue.

1 Comment

Comments are the sole opinion of the visitor who submitted the comment and do not necessarily reflect the views of the author of the article, its editors, or The Gustavian Weekly or Gustavus Adolphus College as a whole.

  1. Javier Gonzalez says:

    I congratulate the college on divesting their fossil fule investments. There are many alternative energy investments that are worth looking into. Humanity has to hedge in case it becomes untenable to keep burning those fuels. There is no need to invest in those energy companies. Thanks for making the world a better place.

Post a Comment

It is the goal of The Gustavian Weekly to spark a rich and meaningful conversation of varying viewpoints with readers. By submitting a comment you grant The Gustavian Weekly a perpetual license to reproduce your words, full name and website on this website and in its print edition. By submitting a comment, you also agree to not hold The Gustavian Weekly or Gustavus Adolphus College liable for anything relating to your comment, and agree to take full legal responsibility for your comment and to indemnify and hold harmless The Gustavian Weekly and Gustavus Adolphus College from any claims, lawsuits, judgments, legal fees and costs that it may incur on account of your comment or in enforcing this agreement. Comments that pass through our automatic spam filter are posted immediately. Comments that do not include the full first and last name of the visitor, include links or content relating to entities that do not directly relate to the content of the article, include profanity, or include copyrighted material may be removed from the site. The Weekly's Web Editor and Editor-in-Chief also reserve the right to remove comments for other reasons at their discretion. Criticism of The Weekly is welcome in the comment section of the website, and those wishing to express criticism of The Weekly are also encouraged to contact the Editor-in-Chief or submit a letter to the editor. Please be respectful, and thank you for your contribution!