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Fiscal health improves in 2012

A small line on the first page of Bradley’s 2012 Form 990 indicates good news for the university’s fiscal health during that year.

The bottom line, which is determined by revenues minus expenses, experienced a more than $24 million increase from the prior year, moving from a reported deficit of $4.3 million in 2011 to a substantial turnaround of $20 million in 2012.

In addition to reporting salaries of the highest compensated employees, the federal Form 990s for universities and other not-for-profit organizations include information on other areas of financial matters, including revenues, expenses, assets, liabilities and more.

With last fall’s budget cuts throwing many students into a state of panic in regard to university finances, the 2012 tax documents indicate recent financial matters may be more stable than it appears. The impact of the 2014 budget cuts, however, will not be publicly disclosed until 2016 when the Form 990s for that year are released.

Program Services
The tax documents include reports on the university’s largest program services, which reported total expenses of $182.5 million during 2012. The largest expenses included instruction and research, “other program services” and intercollegiate athletics, the last of which had a more than $10.4 million difference between revenues and expenses.

Vice President for Business Affairs Gary Anna said there has been discussion about athletics spending, but the claimed numbers may not truly reflect what the program brings to campus.

“There’s a gap, but what you won’t see here is many of our student athletes do pay tuition; they do pay room and board,” Anna said. “They add value in other ways…[Athletics spending] is a very, very meaningful, ongoing dialogue here and across the country.”

As for money spent on academic resources, Anna said it varies across departments, as programs such as engineering and nursing are more costly than other areas.

“At a university like Bradley, we have to make sure we’re putting our money into the most important aspect of why you’re here as a student,” Anna said, stressing that a student’s college experience is not solely based upon classes.

For more information on specific programs expenses, revenues and grants, view the accompanying chart, “University program services finances.”

Investment Income
The effects of national economic shifts may be reflected most significantly in the university’s net investments, which saw significant changes from 2008 to 2012.

The country’s recession in 2008 left Bradley with a reported $61.7 million investment loss, but the university recuperated the following year with a more than $90 million increase.

Investment earnings for 2012 were reported at $38 million following a $10.4 million loss in 2011.
“We’re a long term investor,” Anna said when speaking of the university’s response to economic shifts. “We didn’t panic, and we didn’t take money out of the market.”

According to Anna, these figures include a variety of investments, including stocks, bonds, private investments, hedge funds and other outlets.

“The university’s endowment is a very well-diversified portfolio,” Anna said. “It’s pretty wholesome, but it’s not always perfect.”

It may not have been perfect, but the endowment reached its highest point in university history last summer. According to Anna, the gains from these investments go to improve students’ educational experiences by funding scholarships, enhancing the library, improving the career services and more.

For comparisons of investment earnings, see accompanying graph, “Net Investments Year-to-Year.”

Additional Expenses
The 2012 fiscal year brought with it a more than doubled advertising and promotion budget, which reported total expenses of $577,000. This increase in spending coincided with the hiring of Associate Vice President of Marketing and Publications Susan Andrews.

As for the return on this investment, Anna said it’s a long-term process with an end result yet to be seen.

“We have a lot of good stories that we can tell,” Anna said. “When you’re trying to market a brand, it’s an important undertaking. Reputation is something that must be sustained; it’s not a one-and-done deal.”

Expansions in study abroad programs brought additional options to students, including programs in South Asia and South America.

By reducing spending for study abroad programs in the East Asia and Pacific region, the university was able to offer a diversified option of geographic locations while maintaining relatively consistent costs for the programs ($575,000 total expenses and investments in 2011 compared to $524,000 in 2012).

Looking Forward
New developments on the Hilltop may affect the university’s finances, but Anna said students are unlikely to see significant changes directly.

With Student Senate’s recently passed resolution for implementing tuition freezes during students’ college careers, Anna said he believes Bradley is already “a great value in the marketplace.”

“What we have to be sensitive to are the blends of how dollars are used,” he said. “It is likely that we will have a very modest tuition increase this next year – think 2 percent or less…We want to be able to sustain what we have committed to you.”

Because Bradley is a private university and receives limited state support and federal funding, Anna said tuition plays a strong part in operating the university, but the goal always remains to provide students with the best experience.

“We want to be sure that because of the investment that you’re making, that we can get you to the finish line so that when you graduate, your opportunities for jobs will be good and better than many other institutions,” Anna said. “We know that you will graduate with less debt than students at other institutions. We know the default rate at Bradley is much less than other institutions.

As for the Hilltop’s fate when University President Glasser retires at the end of May, Anna said it is “an evolving question and conversation.”

“There has been a lot of discussion about transparency and disclosure,” Anna said. “Our commentary during all we’re going through is that you can get the best experience and best education that you came here for; that will always be the primary goal of this university.”

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