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April 3, 2013

UChicago CFO talks endowment, fundraising with students

Administrators spoke to students and answered their questions about the University’s finances on Tuesday night at the second in a series of Leadership Conversations hosted by SG and the Office of Campus and Student Life. Executive Vice President and Chief Financial Officer Nim Chinniah presented a breakdown of UChicago’s various sources of revenue and types of expenditures.

Thirty percent of the University’s funding comes from tuition and associated fees, Chinniah said. The remainder is drawn from federal grants (18 percent), donations (7 percent), payout from the endowment (15 percent), and miscellaneous sources like room and board fees and physician’s revenue.

Over half of the budget is spent on compensation, while 13 percent goes to student aid and stipends, he said. Depreciated interest, utility costs, equipment maintenance, and others make up the difference. The allocation of the University’s financial resources primarily rests in the hands of the provosts, deans, and faculty, according to Chinniah.

He also discussed fundraising efforts and clarified the role of donors in determining how money is allocated.

“This is one of the biggest myths in higher education: a donor doesn’t come to us and create a new priority,” he said. “A donor is usually someone who can influence the rate at which an [existing] priority moves.”

In comparing the University’s financial situation to that of peer institutions, he noted that Harvard has an endowment nearly five times larger than UChicago’s $6.6 billion. Stanford raised a billion dollars from donations last year, while the University raised approximately a third of this amount, he said. He pointed out that, despite these differences, UChicago is ranked fourth in the U.S. News and World Report rankings.

Following the presentation, Chinniah, Associate Provost and University Budget Director David Murphy, and Associate Vice President for Finance John Kroll fielded questions from students, which covered tuition, endowment investment, recent expenditures, and transparency in regards to financial decision making, among other topics, for nearly an hour.

One student asked why the specific board members on the finance committee and their meeting minutes are not published, calling the process “opaque.” Chinniah did not directly answer the question despite the student’s continued inquiry. Taking over, Vice President for Campus Life and Student Services Karen Warren Coleman said she appreciated the student’s question and hopes the Leadership Conversations and similar events will continue to provide opportunities to engage directly with the administration about specific issues.

Second-year Brendan Leonard, a member of the UChicago branch of Stop Funding Climate Change, asked about the University’s investment in Arch Coal, a coal mining and processing company. Chinniah told students with specific questions about the investment of the endowment to speak to Vice President and Chief Investment Officer Mark Schmid, who was not present at the forum. Assistant Vice President for Student Life and Associate Dean of the College Eleanor Daugherty said a meeting between students and Schmid is currently in the works.

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