Brandeis will increase its endowment spending from 5.7 percent to 6.2 percent each year to partially fund a $73 million “springboard funding” plan to pay for operational costs and capital projects, according to an email announcement by President Ron Liebowitz.
The Board of Trustees approved the possible endowment spending increase although, prior to the announcement, spending had been decreasing for the past years in an attempt to reach a goal of five percent endowment spending. The 6.2 percent value is calculated based on the average value of the endowment over the past 12 quarters.
The spending plan is divided into two funds. Operations now has a fund of $47 million, including increasing faculty and staff and the operating budgets of a variety of offices as well as the creation of a presidential discretionary fund. There are $26 million to fund various maintenance projects on campus, including making buildings compliant with the American Disabilities Act (ADA) and part of the cost of maintaining buildings, equipment and IT infrastructure.
“We’re basically investing in ourselves,” Liebowitz said, in an interview with The Brandeis Hoot. “We’re borrowing from our endowment in order to invest right now to increase our capacity to raise funds for the future.”
The Board of Trustees approved the increase in the endowment spend rate and bond refinancing to fund the $26 million, as well as the framework and concept of the funding, but has not finalized the allocations of the funds. The board will discuss how to allocate the funding in their Jan. 27 meeting.
Hiring and spending for the plan has already begun. Provost Lisa Lynch has already approved several positions to deal with the larger than expected freshman class. Brandeis has already hired additional part-time counselors and graduate residential mentors.
The largest university departments to receive funding are Institutional Advancement and Academic Services, according
to Liebowitz. The Institutional Advancement department fundraises donations and gifts from alumni and others.
“You need a really vibrant fundraising program and we need to invest in that in order to do what we aspire to do in the next few years,” Liebowitz said. “So they’re going to be getting a large number of fundraisers.” Liebowitz hopes to increase the number of traveling fundraisers from three to between 15 and 18.
The $26 million plan will be funded by refinancing bonds. Brandeis has debt of which the university pays a part of through the operating budget each year and, by extending the life of a series of bonds, is able to gain funding without increasing the university’s debt. “We have a debt service now to pay for the $260 to $270 million overall. We happen to have one series of bonds that were maturing,” Liebowitz said.
He continued, “We were able to refinance this one series. So, what we’ve done is we’ve kept our debt service at the same level so it’s no bigger hit to the operating budget each year, but from refinancing at a better rate we yielded the $26 million of excess funding.”
The $47 million comes from four sources, including increased endowment spending, money saved from a new financial framework, expected increases in the university’s Annual Fund and philanthropic investments the university is currently fundraising.
Brandeis may not receive the full $47 million, however, depending on the amount of donations and gifts the university gets to fund the project. Liebowitz expects to receive enough funding, but spoke about what would happen if Brandeis did not. “We’re going to have to triage and say what are the most important things minus the amount that we’re counting on for fundraising,” he said.
The $47 million will fund additions in a variety of departments, including the addition of 17 full-time faculty, with 15 in the School of Arts and Sciences and two in the International Business School (IBS). The Association to Advance Collegiate Schools of Business (AACSB) reaccredited IBS, recommending that Brandeis increases the number of full-time faculty at the business school.
The $47 million will also establish a presidential discretionary fund, which is common among universities, to support new projects that the operating budget does not have the extra money to fund, said Liebowitz.
Academic Services and the Division of Student Affairs will gain an increase in the faculty salary pool to retain and recruit faculty members. The fund will also provide an additional $1 million to the Provost Research Fund, which currently provides $250,000 to $300,000 in awards each year for $50,000 grants to support major research innovation awards.
Liebowitz is also looking at expanding funds to improve the university dining program. “This is something that’s not definitive but it’s in there because it’s no secret that a lot of people have issues with our dining,” said Liebowitz.
“There’s parts of our agreement with Sodexo that are cemented in,” he continued. “We’re trying to find ways to address some aspects that students and parents and we find most constraining.” The Brandeis contract with Sodexo will expire June 3, 2023.
The Office of Communications, which runs the Brandeis magazine and the university news website, BrandeisNOW, will receive more staff members, a larger operating budget for “branding, external partnerships, internal communications, and public affairs,” according to the email announcement.
The plan will fund a new Office of Equal Opportunity, which will centralize the complaint process at Brandeis. The
$47 million will also fund additional staff for the Office of Spiritual and Religious life, the Ombuds program, the Intercultural Center and increased training, education and development.
The $47 million will also fund new staff for campus operations, four new police officers and additional staff for the Office of the General Counsel, Brandeis’ lawyers.
