continue to shape Gustavus tuition.
While 90 percent of Gustavus students receive some type of financial aid, Gustavus tuition for the 2010-11 academic year was still 42,285 dollars and has only increased since. Many students know that only a handful of students pay this full sticker price due to funds from donors endowments, the FAFSA, and outside scholarships. (See Freedom From Tuition Day on page 3 for more information.)
While we all seem to be clear on how the money comes in, many students still wonder where all the incoming funds go and how the administration makes budget decisions.
Gustavus has two sets of data to calculate the financial situation of the school. One is sourced from the IRS tax form and the other is an audit performed by a third party. Due to calculation differences of the two methods, the numbers vary quite a bit. The tax forms put the revenue at 117 million dollars and the expenses at 114 million dollars, while the audit report is 97.7 million dollars and 78.2 million dollars, respectively. Both reports can be difficult to navigate, a feeling echoed by those involved in the budget committee.
“The college is a complex system with a complicated financial reality. I think people try to be great stewards of college resources and make decisions that are going to serve the institution well,” JoNes VanHecke, dean of students and vice president for student life, said. She is a member of the Budget Committee, which makes recommendations to the Board of Trustees on where to allocate money yearly.
“It’s a long process that has a great deal of discussions and deliberations,” Ken Westphal, vice president for finance, said.
The process spans around nine months, with the meetings beginning in fall for the budget of the following year. The committee is made up of the vice presidents and directors of all the departments on campus, the president of the college and two faculty members.
In the bottom-up process, the staff working within the departments first present budgets to the vice president of their department, then the vice president makes any changes they see fit.
When the budget committee meetings commence, the various departmental budgets are brought together and the real work begins. Cuts and adjustments must be made, and if the budget still cannot cover the expenses, tuition rises, an event which happens yearly. This number depends not only on the expenses of the college, but the somewhat unknown revenue, which is dependent upon investment returns, donations and student enrollment.
“Each year there’s a decision that’s made about how much tuition should be charged … it’s a pretty thoughtful, intentional conversation where people try to think: let’s not increase it anymore than we think we need to. There are pieces of that puzzle that are not known … so we make a projection [for revenue]. Most folks on the budget committee have been on it for a while … I think there are good practices that are in place,” VanHecke said.
Salaries and benefits are the biggest expenditures of the school. The IRS Form 990 requires a list of the most highly paid employees. Gustavus pays its directors and administrators in the same range or even lower than fellow MIAC schools St. Olaf College and Carleton College, and the total is around 1.4 million dollars (excluding benefits) of the 46 million dollars Gustavus spends on salaries.
As for fundraising efficiency, according to charitynavigator.com, which used documents from 2009 and 2010, Gustavus falls a bit behind St. Olaf and Carleton. Gustavus spends 37 cents per dollar it raises, while St. Olaf spends 18 cents and Carleton spends 8 cents. While this could be discrepancies in how the three colleges fill out tax forms, Tom Young, vice president for institutional advancement, said it’s a number their department is continually improving.
“I do know that in the last couple of years we have been trending down significantly, which is a good thing. It’s something we’re working on continuously to get lower,” Young said.
Gustavus received over 11 million dollars in donations in the last year and spent 2.8 million dollars on fundraising, so the updated data would yield 25 cents spent for raising a dollar. The numbers have been improving, which is a good thing because a lot of what Gustavus does relies on fundraised money.
“From the very beginning of the college to today, there have been people that have supported this institution with their generosity,” Young said. “That is the only reason this place is the institution it is today. Tuition is certainly not inexpensive, but it doesn’t cover everything that happens in a year, and that’s a great thing to celebrate.”
Students have a few opportunities to get involved in the budget process. They are selected to serve on committees within the Board of Trustees, positions that may soon be filled through an application process. Students can always go to their Student Senate representative, attend the community comment section at the beginning of each Senate meeting or e-mail VanHecke directly if they have questions or comments about college finances. Student involvement will likely be increasing soon.
“We feel like there are some aspects of the college that have really strong student perspective that right now aren’t sitting on the committee, like Athletics, Chaplain’s Office, Servant Leadership and Student Life. Hopefully we will approve this at the next meeting and we’ll have a student representative from each of those areas,” VanHecke said.