A Message from Vice President for Finance Samuel E. Jones '75, M.B.A. '80
William & Mary’s Financial Performance
Fiscal Year 2012 allowed William & Mary to stabilize its budgets after the disruption associated with the Great Recession and the resulting reduction in state funding support. Having made expenditure reductions during the past several years in order to maintain balanced budgets, the university again was able to move forward, implementing selected aspects of its strategic plan.
While Fiscal Year 2012 saw some renewed state investment in William & Mary and its programs, state funding as a percentage of the university’s overall operating budget continued its decline—falling to 12.8 percent. Revenue from tuition and fees; self-supporting auxiliary enterprise activities (residence halls, food service, etc.); grants and contracts; and private giving provided the diversity of funding support critical to the university’s overall financial health. At the same time, William & Mary reaffirmed its commitment to reallocating funds to its highest priority needs, including salary support for faculty and staff.
Expenditures reflected William & Mary’s priorities in maintaining the quality of its academic programs and supporting additional enrollment. Significant funds remain invested in student financial aid, recognizing that increases in tuition and fees, coupled with changes in the financial situation of individual families, have a direct impact on students with demonstrated need.
The university continued to see growth in the value of its consolidated endowment—endowments held by the various entities supporting William & Mary and its programs. At June 30, 2012, the consolidated value of the university’s endowment totaled $644.2 million, an increase of 3.1 percent. While investment performance reflected the challenge of investing in sometimes turbulent national and global markets, strong gift flow and significant growth in assets held in external trusts more than compensated. The William & Mary Investment Trust, the largest of the university’s investment portfolios, remains highly diversified across asset classes. A more detailed discussion of investment performance follows.
With the opening of the School of Education building and the Sherman and Gloria Cohen Career Center, the facilities focus shifted to planning for the third and final phase of the Integrated Science Center (ISC) and the renovation of both Tucker and Tyler halls. Since the ISC 3 and Tucker Hall projects previously had been authorized by the state, William & Mary requested and received permission to move forward with Tyler Hall planning. On the non-academic side, the William & Mary Real Estate Foundation opened Tribe Square. Located on Richmond Road, just across from campus, Tribe Square provides 56 apartment-style beds, as well as four commercial spaces. On campus, construction of the new fraternity houses is underway. When complete in summer 2013, these houses will not only dramatically improve fraternity housing, but add an additional 187 beds to our on-campus inventory, reaffirming once again the university’s residential commitment.
Fiscal Year 2013 budgets continue our progress. Within available resources, the budgets reflect priorities included in William & Mary’s Strategic Plan and the Six-Year Plan approved by the Board of Visitors in response to the recently passed Virginia Higher Education Opportunity Act. This act reaffirmed “the Commonwealth’s commitment ... to having a distinctive ‘public ivy’ at William & Mary.”
The Board of Visitors and the administration are focused on how best to attract and retain the very best students, faculty and staff while enhancing quality, affordability and access. Well into its strategic planning process, William & Mary this year will assess progress to date and identify more intentional investments to move the university forward. Under the general theme of “Breaking Boundaries,” possible initiatives include enhancing the “360 degree” nature of a William & Mary education, leadership development, expanding technology-based instructional methods, interdisciplinary opportunities, applied learning, and global education and awareness. These investments will occur even as the university continues to address the six original “grand challenges” that have driven recent funding decisions.
All the university's constituencies will need to contribute to this effort. While we do not expect the state to restore those funds lost since 2008, the Commonwealth will continue to play an important role in William & Mary’s future, providing both operating and facilities support. We can expect state resources to be targeted to support the various initiatives highlighted in the Higher Education Opportunity Act. Internally, William & Mary’s deans and vice presidents remain focused on ways to improve the efficiency and effectiveness of program delivery, allowing for the reallocation of funds to higher priority needs. Tuition and fees remain a part of the funding solution, recognizing that any action increasing the cost to students must address access and affordability issues. Finally, private fundraising, both annual giving and endowment, remains crucial to both the short- and long-term financial health of the institution. The Board of Visitors, in partnership with The College of William & Mary Foundation, the William & Mary Alumni Association, and the various other foundations and boards supporting the university, continues to invest those resources necessary to grow William & Mary’s giving profile and endowment.
As noted above, recent state funding action has cleared a variety of capital needs. As a result, the university is able to shift its facility focus to the programmatic and space needs of its various arts programs. Prior studies have more than adequately documented the condition and space needs in theatre, speech, dance, music, art and art history, and the Muscarelle Museum of Art. Funded with both state and private funds, planning is underway for an “Arts Quarter” that will provide quality instructional, performance, and exhibition space for our students, faculty, and visitors.