Boston University’s Annual Report displayed a jump in overall monetary intake throughout Fiscal Year 2013, according to officials from the school’s Department of Treasury.
The report showed that BU was able to increase its revenue, said Senior Vice President, Chief Financial Officer and Treasurer Martin Howard.
“Financial results for FY 2013 reflect our continued vigilance to maintain a diversity of revenues from five primary sources: tuition, research, auxiliaries, philanthropic and endowment support,” Howard said. “It is worth noting our continued success in annual fundraising and progress toward our comprehensive campaign goal.”
University tuition and fees made up 51.5 percent of BU’s revenue for FY 2013, the report stated. Sponsored programs, sales and services, and auxiliaries also formed a significant portion of the school’s $1.689 billion in revenues.
“Thanks to diversified revenue flows, steady yet nimble leadership and external validation, this year we increased our endowment, contained costs, moved forward with multiple construction projects and even saw our bond rating elevated,” the report stated.
BU’s operating revenues saw a modest increase, ensuring that BU will remain able to operate efficiently, which requires about $2 billion each year, said Colin Riley, a spokesman for BU.
“The operating revenues had an increase of 1.22 percent to $1.689 billion,” Riley said “An increase is desirable. Decline is not. This signifies BU’s capability of operating under the current budget, bodes well for FY 2014 and is certainly a positive.”
Riley said as a nonprofit university, a large majority of BU’s revenue comes from the yearly tuition paid by students attending the university.
“More than half of revenue comes from tuition,” Riley said. “The tuition covers the biggest expense, which is salary and benefits. However, BU is not tuition-dependent and has other methods of contributing to the operating budget.”
Although tuition increased by 3.7 percent for the 2013-14 school year, this number remains below the national average tuition increase of schools similar to BU, Riley said.
“For the past decade, the university has been below the national average of similar universities as a percent increase,” he said. “It is significant that the university has been able to remain below that line, because usually, over a period of years, schools go above it and below it, but BU has remained below. It speaks to very strong management and a serious and prudent approach to handling of the operating budget.”
The sale of the formerly BU-owned property Hotel Commonwealth also supported BU’s endowment fund, allowing the university to increase its endowment for FY 2014, Riley said. The sale added $77 million to the university’s endowment, $2.4 million of which contributed to BU’s 2013 income.
BU also received official recognition of its strengthened financial profile through an upgraded credit rating from Moody’s, a corporation that analyzes the credit rating of institutions.
“The upgrade reflects BU’s sustained improvement in its student market and research profile following years of strategic governance and leadership changes that have elevated BU to a more competitive position,” Howard said. “The University is also beginning to generate philanthropic support more in line with its size and prominence and has launched its first-ever comprehensive fundraising campaign.”
Howard said BU’s commitment to garnering more competitive undergraduates has contributed to investors’ willingness to invest and donate to the university.
“Moody’s also pointed out several developments that bolster confidence in BU’s finances,” he said. “[These included] President Brown’s drive to attract academically stronger undergraduates and international students, the boom in research at the University in the past two decades, BU’s admission into the Association of American Universities and recent budget surpluses and major gifts.”