FAQ - Budget

The answer to this question depends largely on how one presents the budget. In any presentation, however, two generalizations can be made about our revenues and expenditures. Our largest revenue sources are the endowment contribution and "net" tuition and fees. Our largest expenditures cover the costs associated with "Instruction." Classified in another way, our largest expenditures cover the cost of all salaries/ benefits and maintaining our campus (our physical plant).

At Grinnell, we present our budget in a manner that is consistent with our peers. This also helps to ensure that our budget is accurately and fairly presented. In reporting our budget, we do not show directly Grinnell College-awarded scholarships and grants, which is obviously a very large "expense" item in our budget. This is because, consistent with the methodology used by our peers, we "net" our tuition and mandatory fee income. That is, we show the tuition and mandatory fees as "paid" and then deduct from that figure the amount of any Grinnell College-awarded scholarships and grants. Thus, as set out in the pie chart below, tuition and fees and Grinnell College-awarded scholarships and grants are reported as one figure in our budget: "net tuition and fees." This is done because, for accounting purposes, an item of tuition or any other fee that is reduced by a scholarship or grant award is not really "paid" and probably should not be shown as a revenue item. At the same time, scholarships and grants are a significant allocation of the College's resources.

Conversely, when we present our budget, we show almost all other income items on a "gross" basis. For instance, we show our Auxiliary Enterprises income, which includes items such as room, board, and bookstore payments as revenue. Were we to "net" our Auxiliary Enterprises revenue with the direct costs associated with running these enterprises, we would only show a modest amount of income. Here is what our revenues look like as we report them.

		FY 2003 Budget (Next Year) Revenues
		Gifts & Grants# $4.8M 7.9%
	Net Tuition & Fees $17.2M 28.2% Gross Auxiliary Enterprises* $8.7M 14.2%	#Gifts & Grants $4.8M 7.9% Other $650K 1%	Endowment Contribution $29.7M 48.6%
	*such as Dining, Phone Service and the Bookstore #includes Government Grants, Contracts, Private Gifts and Grants   Based on the FY 2003 Budget approved by the Board of Trustees on February 23, 2002
		Tuition & Fees
	Net Tuition & Fees $17.2M		Grinnell College-Awarded Scholarships and Grants $15.6M
	Net Tuition & Fees (17.2M) = Gross Tuition & Fees ($32.8M) minus Grinnell College Scholarships & Grants awarded ($15.6M) Tuition Discount Rate (48%) = Grinnell College-awarded Scholarships & Grants ($15.6M) divided by Gross Tuition & Fees ($32.8M) The whole pie = Gross Tuition & Fees ($32.8M)

Thus, to specifically answer the question on the expenditure-side, we could do so in two ways.

1) Under our reporting methodology, on the expenditure side, we talk in terms of functional categories such as "Instruction," Student Services," "Institutional Support," and "Auxiliary Enterprises." Here is what next year's expenditures, including our largest ones, look like by functional classification:

	FY 2003 Budget (Next Year) Expenditures by Functional Classification
	Academic Support $7.9M 13% Student Services $7.9M 13%
Instruction $19.6M 33%		Institutional support $9.8M 16% Operation & Maint. of Plant $4.9M 8%
	Bldg. Maint & Equip Fund $1.5M 2% Debt service $1.2M 2% Auxiliary enterprises $8.2M 13%
Based on the FY 2003 Budget approved by the Board of Trustees on February 23, 2002

2) We could also think about our expenditures within a "natural" classification. Using this classification, for example, we could organize our expenditures by such categories as "salaries /benefits" and "maintaining our campus" (our physical plant), which are our two largest expenditures, rather than by the function classifications listed above. Here is what next year's expenditures look like by one natural classification:

FY 2003 Budget (Next Year) Expenditures by Natural Classification
	Maintaining our Campus* $6.7M 11%
Everything Else# $18.7M 31%		Salaries and Benefits $35.6M 58%
*Maintaining our Campus - Includes non-salary operation costs of our Physical Plant, Debt Service and the Building Maintenance and Equipment Fund (for facilities) #Everything Else - includes items such as faculty and student programs, faculty development, travel, computers, food, and library materials   Based on the FY 2003 Budget approved by the Board of Trustees on February 23, 2002

The fiscal year, corresponding closely to the academic year, runs from July 1 through June 30. For example, FY 2003 starts on July 1, 2002 and ends on June 30, 2003.

You should take your idea to the person who submits your budget. If that person supports your idea as a priority within those areas that he/she oversees, he/she can submit your proposal and make a case for it as an institutional priority worthy of funding. As done this year, the Budget Steering Committee will consider your proposal in relation to all other requests. For example, the library and the Instructional Support Committee proposed JSTOR in next year's budget. This proposal was supported by Jim Swartz, Dean of the College, who recommended to the Budget Steering Committee that JSTOR be funded. Ultimately, the Budget Steering Committee recommended to the President that JSTOR be funded.

The Trustees created the Capital Reserve Fund last year. It operates outside of the base budget and is controlled by the Trustees for large capital expenditures such as building construction and renovation. The Capital Reserve Fund is also useful because it "cushions" the base budget from hard times.