Financial Master Plan
UMass Amherst provides very high quality teaching and research performance levels that require investment well beyond that available from student fees and state support. To sustain and increase these levels of performance, the campus expects to raise significant private support through an aggressive and targeted fundraising campaign. The revenue generated by this campaign and the increased attention to fundraising appears reflected in the five-year budget projections. If the state were able to provide matching programs for private endowment or capital gifts, the level of growth for fundraising would be significantly enhanced. It is important to note that the revenue projections here reflect income from private sources, and when the private gift is an endowment, the income yield is on the order of 4.5% of the endowment gift. When we receive a capital gift, it supports critical construction needs, but does not appear reflected in the budget.
The campus at Amherst is capable of supporting a larger number of students than currently enroll. Flagship institutions of our type often have something on the order of 30,000 to 35,000 students (undergraduate and graduate). Because the state does not fund enrollment directly and because the combination of in-state tuition and fees is not sufficient to pay the cost of additional new students, UMass Amherst will grow its student population primarily from the recruitment of out of state students. These students, whose differential out of state tuition generates significant revenue, will not only build the campus to a more competitive size, but will provide the additional revenue needed to support the additional costs required to teach them. For the five year period displayed here, the campus anticipates adding an average of about 300 students per year. Because the campus has an obligation to support Massachusetts residents, we anticipate that 33% of these new students will be in-state residents and 67% out-of-state. If the physical facilities issues of the campus can be addressed effectively, the projected increase in students may prove a significant underestimate.
Over the past four years, including the 2004 academic year, the University of Massachusetts Amherst has seen its faculty number reduced from a high in FY 2000 of 1,048 to its current low in the Fall of FY 2004 of 922 before the impact of the early retirement program is known. During this period our undergraduate student enrollment remained relatively level. In FY 2000 we had 17,900 FTE undergraduates compared to this fall’s 17,600. Universities live from the work of their faculty. The students attend because of the faculty, the research enterprise is driven by the faculty, and the service the institution provides the Commonwealth is based on the work of the faculty. Consequently, restoring faculty numbers is one of the highest priorities of the next five years. Fundraising, research grants and contracts, and an expanded student population all require the expansion of the faculty base on which the university’s excellence resides. At the same time, however, faculty work requires strong and high quality support from every type of staff, whether academic, grounds, technical, or administrative. The decline in staff over the period reflected in the budget tables attached is as dramatic and as damaging as the decline in faculty, and the campus must restore its staff strength as it rebuilds the faculty. The maintenance of first rate faculty and staff also requires constant reinvestment in compensation rates since the competition for these people from other higher education institutions is intense. The budget includes not only the base increases delayed from previous years in salary but a minimal continued investment in compensation at 2.8% per year.
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