# Presentation: 739291

## WE’RE ON THE SAME SIDE

- COMMENTS BY
- JERRY G. BRIDGES
- CONTROLLER, JOHNS HOPKINS UNIVERSITY

## TO IMPROVE LIFE

## FISCAL YEAR, 2003
	TOTAL REVENUE 		$2.538 B
	TOTAL EMPLOYEES	21,644
	TOTAL ENROLLMENT	17,925

- FISCAL YEAR, 2003
- 	TOTAL REVENUE 		$2.538 B
- 	TOTAL EMPLOYEES	21,644
- 	TOTAL ENROLLMENT	17,925

## PREVIEW OF REMARKS

- SYNOPSIS OF MAJOR SOURCES AND USES OF FUNDS AT RESEARCH UNIVERSITIES
- DISCUSSION OF MOST BINDING CONSTRAINTS
- COMMENTS ON SIMILIARITIES AND DIFFRENCES WITH GOVERNMENT AGENCIES
- SOME CONCLUSIONS

## PRINCIPAL DIFFERENCE IS IN SOURCES OF FUNDS
PUBLIC INSTITUTIONS RECEIVE DIRECT APPROPRIATIONS AND ARE LESS DEPENDENT ON GIFTS AND PRIVATE GRANTS
PRIVATE INSTITUTIONS RELY MORE ON FUNDRAISING

- PRINCIPAL DIFFERENCE IS IN SOURCES OF FUNDS
- PUBLIC INSTITUTIONS RECEIVE DIRECT APPROPRIATIONS AND ARE LESS DEPENDENT ON GIFTS AND PRIVATE GRANTS
- PRIVATE INSTITUTIONS RELY MORE ON FUNDRAISING

## PRINCIPAL SOURCES OF OPERATING FUNDS (2001 AGGREGATE DATA)

- 				PUBLIC		PRIVATE
- _SOURCE_		_INST’S*_		_INST’S*_		_JHU**_
- GOV’T APPROPRIATIONS	   31%		   - 0 -		    1%
- GOV’T GRANTS ETC.	   22%		   25%		   52%
- PRIVATE GIFTS, ETC.	     9%		   22%		   11%
- NET TUITION AND FEES	   13%		   20%		   11%
- AUXILIARY ENTERPRISES	   14%		   18%		     2%
- ALL OTHER		   11%		   15%		   23%
- * Council of Government Relations Report, _Finances of Research Universities, _September 25, 2003
- ** Fiscal Year, 2002

## 			            PUBLIC     PRIVATE	  		
USES		            INST’S*	   INST’S*     JHU**
INSTRUCTION        	   32%	      34%	          29%	
RESEARCH		   25%	      23%	          44%
AUXILIARIES		   18%	      18%	            3%
ACADEMIC SUPPORT	   10%	        8%	            3%
INSTITUTIONAL SUPPORT   6% 	        9%             6%
ALL OTHER		     9%	        8%	          15%

* Council of Government Relations Report, Finances of Research Universities, September 25, 2003
** Fiscal Year, 2002

- 			            PUBLIC     PRIVATE
- _USES_		            _INST’S*_	   _INST’S_*     _JHU**_
- INSTRUCTION        	   32%	      34%	          29%
- RESEARCH		   25%	      23%	          44%
- AUXILIARIES		   18%	      18%	            3%
- ACADEMIC SUPPORT	   10%	        8%	            3%
- INSTITUTIONAL SUPPORT   6% 	        9%             6%
- ALL OTHER		     9%	        8%	          15%
- * Council of Government Relations Report, _Finances of Research Universities, _September 25, 2003
- ** Fiscal Year, 2002

## GOVERNMENT APPROPRIATIONS
GOVERNMENT GRANTS AND CONTRACTS
PRIVATE GIFTS, GRANTS AND CONTRACTS
TUITION AND FEES
AUXILIARY ENTERPRISES
DEBT

- GOVERNMENT APPROPRIATIONS
- GOVERNMENT GRANTS AND CONTRACTS
- PRIVATE GIFTS, GRANTS AND CONTRACTS
- TUITION AND FEES
- AUXILIARY ENTERPRISES
- DEBT

## CONSTRAINTS

- GOVERNMENT APPROPRIATIONS
- STATE LAWS AND REGULATIONS
- UNCERTAINTY OF AMOUNT
- LAND GRANT ISSUES

## GOVERNMENT GRANTS AND CONTRACTS
ADMINISTRATIVE COST CAPS
SALARY CAPS
ALLOWABLE EXPENSES
EXCLUSION OF FUND-RAISING COSTS
OTHER COST CONSTRAINTS
INFRASTRUCTURE COSTS

- GOVERNMENT GRANTS AND CONTRACTS
- ADMINISTRATIVE COST CAPS
- SALARY CAPS
- ALLOWABLE EXPENSES
- EXCLUSION OF FUND-RAISING COSTS
- OTHER COST CONSTRAINTS
- INFRASTRUCTURE COSTS

## PRIVATE GIFTS, GRANTS AND CONTRACTS
COST CAPS
COST OF MAINTAINING A REPORTING INFRASTRUCTURE
COLLECTION, DEFERRED PAYMENTS AND WRITE-OFFS
RESTRICTED VS UNRESTRICTED GIFTS

- PRIVATE GIFTS, GRANTS AND CONTRACTS
- COST CAPS
- COST OF MAINTAINING A REPORTING INFRASTRUCTURE
- COLLECTION, DEFERRED PAYMENTS AND WRITE-OFFS
- RESTRICTED VS UNRESTRICTED GIFTS

## INSTRUCTION:
	PROVIDING QUALITY INSTRUCTION
	PROVIDING QUALITY SUPPORT 
		(LIBRARIES, LABS, TECHNOLOGY)
	PROVIDING FINANCIAL AID
	PRIVACY LAWS COMPLIANCE
	TAX LAWS, ESP. FOREIGN STUDENTS

- INSTRUCTION:
- 	PROVIDING QUALITY INSTRUCTION
- 	PROVIDING QUALITY SUPPORT
- 		(LIBRARIES, LABS, TECHNOLOGY)
- 	PROVIDING FINANCIAL AID
- 	PRIVACY LAWS COMPLIANCE
- 	TAX LAWS, ESP. FOREIGN STUDENTS

## AUXILIARY ENTERPRISES
QUALITY ROOM AND BOARD
HEALTH AND SAFETY STANDARDS
OTHER
DEBT
MAINTENANCE OF BOND RATINGS
TAXABILITY ISSUES
ROYALTIES
CLINICAL ISSUES

- AUXILIARY ENTERPRISES
- QUALITY ROOM AND BOARD
- HEALTH AND SAFETY STANDARDS
- OTHER
- DEBT
- MAINTENANCE OF BOND RATINGS
- TAXABILITY ISSUES
- ROYALTIES
- CLINICAL ISSUES

## GOVERNANCE COMPARISON
INDIVIDUAL COMPONENTS (AGENCIES, SCHOOLS) OPERATE INDEPENDENTLY AND HAVE THEIR OWN CONSTITUENCIES
UNIVERSITY RESEARCH IS SUBJECT TO PEER REVIEW FOR BOTH FUNDING PROPOSALS AND RESEARCH RESULTS
BOTH ARE SUBJECT TO A MULTITUDE OF LAWS

- _GOVERNANCE COMPARISON_
- INDIVIDUAL COMPONENTS (AGENCIES, SCHOOLS) OPERATE INDEPENDENTLY AND HAVE THEIR OWN CONSTITUENCIES
- UNIVERSITY RESEARCH IS SUBJECT TO PEER REVIEW FOR BOTH FUNDING PROPOSALS AND RESEARCH RESULTS
- BOTH ARE SUBJECT TO A MULTITUDE OF LAWS

## ECONOMIC COMPARISON
DEFINED, LIMITED BUDGETS
PENALTIES FOR OVERSPENDING
UNIVERSITY BUDGET CYCLE IS SHORTER AND MORE FLEXIBLE
UNIVERSITIES BORROW ON THE BASIS OF THEIR FINANCIAL STATEMENTS

- _ECONOMIC COMPARISON_
- DEFINED, LIMITED BUDGETS
- PENALTIES FOR OVERSPENDING
- UNIVERSITY BUDGET CYCLE IS SHORTER AND MORE FLEXIBLE
- UNIVERSITIES BORROW ON THE BASIS OF THEIR FINANCIAL STATEMENTS

## SOCIETAL COMPARISON
SIMILAR MISSIONS (TO IMPROVE LIFE)

- _SOCIETAL COMPARISON_
- SIMILAR MISSIONS (TO IMPROVE LIFE)

## RESEARCH UNIVERSITIES AND THE AGENCIES WITH WHICH THEY DEAL HAVE SIMILAR GOALS.
THE TRADITIONAL PARTNESHIP BETWEEN RESEARCH UNIVERSITIES AND THEIR GOVERNMENT SPONSORS IS UNDER STRESS.
CONSTRAINTS IMPOSED BY THE AGENCIES ARE INCREASING AND ARE FINANCIALLY BURDENSOME.
A NEW BUSINESS MODEL NEEDS TO ADDRESS  THE IMPACT OF THESE CONSTRAINTS ON THE UNIVERSITIES.
THIS PROCESS OFFERS AN OPPORTUNITY TO RE-BALANCE THE PARTNERSHIP FOR THE FUTURE.

- RESEARCH UNIVERSITIES AND THE AGENCIES WITH WHICH THEY DEAL HAVE SIMILAR GOALS.
- THE TRADITIONAL PARTNESHIP BETWEEN RESEARCH UNIVERSITIES AND THEIR GOVERNMENT SPONSORS IS UNDER STRESS.
- CONSTRAINTS IMPOSED BY THE AGENCIES ARE INCREASING AND ARE FINANCIALLY BURDENSOME.
- A NEW BUSINESS MODEL NEEDS TO ADDRESS  THE IMPACT OF THESE CONSTRAINTS ON THE UNIVERSITIES.
- THIS PROCESS OFFERS AN OPPORTUNITY TO RE-BALANCE THE PARTNERSHIP FOR THE FUTURE.

## THE ONE WITH THE GOLD MAKES THE RULES.

- THE ONE WITH THE GOLD MAKES THE RULES.