06deacon
The Pumpfaker
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- Nov 28, 2012
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I’d be curious as to Wake’s financials. How much does it cost to run the school in a given year, including all salaries, etc?
Here’s a blind outline coming at it from the revenue side - the numbers are almost assuredly off, but let’s highlight a few things:
5.4k undergrads * $50k net average = $270M
3.5k grad students * $50k net = $175M
Annual Donations/Endowment Gift Contribution = $20M?
Grants + Other = $30M
Endowment Contribution = $1.86B * 4% spending ratio) = ~$75M
Total Revenue = Total Costs = $570 Million
Assume that $50k for undergrads and grad students alike is the net amount paid to the school for tuition/room/board after scholarships/aid (feel free to chime in if you know better).
Observation 1: the endowment contribution to the total at just 13% limits the options on things like need-blind admissions. Harvard et al can do that because they have endowment sizes that cover most of the operating budget of the school.
Just taking the average net payment to $40k from $50k from no changes other than endowment size covering more of the cost via scholarships/aid would require the endowment to be ~$4 Billion.
For the endowment to cover the entire operating budget in perpetuity, you’d be looking at a $14 Billion endowment.
Observation 2: another option is increasing the student body size and class size. You could do this (with some incremental costs for housing/food/etc) without meaningfully increasing faculty size.
What does this do to the experience (unknown)?
The number and quality of applicants isn’t likely to increase given the upcoming demographic cliff and the now lower ranking, so increasing the size of the student body without further diluting the average quality of students starts to get much more difficult.
Option 3: you could increase the number of faculty devoted to research by expanding the size of the overall faculty without increasingly class sizes given many qualified applicants looking for jobs. The offset here is the increase in cost, which would have to be covered by…tuition.
Options 4-10: choose your own adventure below.
It all comes back to the size of the endowment - at 10x the size we could do whatever we wanted. Now we can do anything we want, but not everything we want, with much more stark trade offs.
Yeah to go back to your first paragraph, I kind of flippantly said that in another post but that “cost to run the school” side has me a little baffled. I’m curious as to how much different it should be now vs when we were in school and tuition was not what it is now.