Exeter Leadership Weekend - Managing the Academy's Finances
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Transcript of Exeter Leadership Weekend - Managing the Academy's Finances
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PEA LEADERSHIP WEEKEND - 2013
Managing The Academy’s Finances
Justin Merrill, Acting Chief Financial Officer
Tony Downer ‘75, Trustee
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PRESENTATION OVERVIEW
• Resources
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PRESENTATION OVERVIEW
• Resources
• Trends
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PRESENTATION OVERVIEW
• Resources
• Trends
• Guiding Principles
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PRESENTATION OVERVIEW
• Resources
• Trends
• Guiding Principles
• Key Trustee Decisions
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PRESENTATION OVERVIEW
• Resources
• Trends
• Guiding Principles
• Key Trustee Decisions
• Challenges & Strengths
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PEA RESOURCES
• Our People 210 Faculty, 432 Staff
• Our Campus 131 Buildings, 1.5mm Square Feet
670 acres
• Our Endowment $1.08 billion (preliminary 6/30/13)
$50mm in debt
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PEA Revenues: FY 2014 - $91.1mm
Endowment Draw52%
Annual Giving & Current Gifts
9%
Net Tuition & Fees31%
Other8%
2013-14 Revenue
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PEA Expenses: FY 2014 - $91.0mm
Comp & Benefits57%
Plant & Tech19%
Dept Expenses14%
Other10%
2013-14 Expenses
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PEA TRENDS - I
• Tuition FY 2004: $30k, FY 2014: $46k
CAGR – 4.4%
• Endowment 6/30/03: $557.4mm, 6/30/13: $1.08 billion
CAGR – 6.8%
• Financial Aid FY 2004: $8.9mm, FY 2014: $20.3mm
CAGR – 8.6%
Percentage receiving aid: 36% / 47%
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PEA TRENDS - II
• Benefits Eligible Headcount FY 2005: 521, FY 2013: 534
CAGR – 0.3%
• Compensation & Benefits FY 2004: $33.9mm, FY 2014: $52.1mm
CAGR – 4.4%
• Plant and Technology FY 2004: $6.8mm, FY 2014: $17.1mm
CAGR – 9.7%
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Guiding Principles
• Accessibility, Affordability, Diversity
• A commitment to compensate our faculty and staff
• Manage our financial and our physical resources with a
long-term perspective – Intergenerational Equity
• Plan, spend, and invest conservatively in order to minimize
programmatic and community disruptions
• Budget and manage to an annual break-even outcome
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Key Trustee Decisions - I
• Set tuition
Keen sensitivity to affordability/accessibility
Impact on financial aid census
Positioning relative to our peer schools
• Determine compensation increases
Above, below or equal to CPI
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Key Trustee Decisions - II
• Set financial aid policies
Families with incomes under $75k free
• Set financial aid census targets
Financial aid largely funded from endowment
with additional support from the Exeter Fund
and current gifts
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Key Trustee Decisions - III
• Determine endowment draw
Yale formula
Recent increase in the target spend rate from
4.5% to 5%
Sustainability of endowment value
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Key Trustee Decisions - IV
• Allocate surpluses
Plant reserve, technology reserve, faculty
housing, quasi endowment
• Approve new positions
• Ensure high discipline in expense management
• Approve new buildings/new projects/new
initiatives
Deferred maintenance catch-up
Capital Projects Funding Policy
Performing arts center/second turf field/cage
replacement
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Our Challenges
• Reduction in projected endowment returns
• Restraining the increase in tuition
• Compensating our people/controlling our costs
• Maintaining our facilities
• Funding initiatives
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Our Strengths
• An unmatched endowment – absolute & per pupil
Level of endowed financial aid permits unmatched
accessibility
• Faculty compensation at top of peer group
• A well maintained plant
• A supportive alumni/alumnae base
• An extremely robust and qualified applicant pool
• Sound guiding principles
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PEA FINANCIAL CONDITION
• We are extraordinarily fortunate.
• Our community is NEVER
complacent, NEVER satisfied
• Driven to do more
• Determined to be the best