Approaching the Campus Budget - Part I

The Income Earned

UMass Amherst, like most major research university campuses, has a variety of income sources that respond to different parts of the campus’ activities. The institution earns almost $600 million each year from all these sources.

State Support: The first large block of revenue earned by the campus comes from the state. The sources include direct appropriations as well as the state’s support that waives the collection of tuition from some Teaching Assistants (TAs), Research Assistants (RAs), athletics scholarship holders, etc. The amount of campus revenue a state provides from its tax base varies greatly among the different states. In some states this income reflects enrollment by formulas that recognize the differential cost of lower division, upper division, graduate, and professional instruction. In other states, as is the case in Massachusetts, the amount provided by the state follows a lump sum, cost-to-continue or incremental model. The state calculates a lump sum, cost-to-continue allocation each year by taking the previous year’s appropriation as the base and then adding or subtracting dollars to accomplish the legislature’s goals. The Commonwealth’s practice has often been to increase the university budget in response to labor contract obligations. However, the most recent adjustments reflect reductions as a consequence of state fiscal crises. UMass Amherst currently earns about $152 million or 25.5% of its total revenue from state support.

Student Payments: The second of three large sources of revenue is student payments of various kinds. These include out-of-state tuition, the curriculum and other mandatory fees, and a variety of smaller fees for special activities. Taken together, the students including those taught through Continuing Education contribute about $177 million to the campus’ budget, which represents 29% of the institution’s total budget.

Research and Sponsored Activity: The third source of revenue comes from the work of the faculty, staff, and students in research and sponsored activity. This campus, like all major research institutions, must compete in the local, state, and particularly the federal marketplace for research support. This is an intense competition, and only outstanding projects survive. We project that the Amherst campus will earn about $95.4 million from the sponsored activities. Most of this is research related, but some significant portion also comes from a variety of service and outreach projects paid for by various sponsoring agencies. Of this $95.4 million (which represents about 16% of total income) we earn about $76.3 from the direct costs of the activities we perform and $19.1 from the recovery of the indirect costs of those activities.

Private Giving: A fourth source of revenue that currently reaches $9.8 million comes from private giving. This category includes not only cash received during the year from annual giving but also includes the payout (currently set at about 4.0%) from the campus’ $63.5 million of endowment. Note that while the fundraising total for a given year may well exceed this $9.8 million (in 2003 the campus raised $35 million), these two numbers reflect different items. The revenue number of $9.8 million is the cash from private gifts and endowment earnings made available during the year to spend on campus activities. The $35 million fundraising total includes not only cash received but additions to endowment, capital gifts to be paid out for buildings to be constructed in the future, documented deferred gifts, and gifts of real estate and other tangible property that will later be converted to endowment or cash. The $9.8 million of spendable income represents in part the income from fundraising totals of prior years as those pledges and other deferred gifts mature and begin to yield current revenue.

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Fall 2003 Budget Discussion

I. Approaching the Campus Budget

II. Approaching the Campus Budget: Research

Appendix: Approaching the Campus Budget: Research

Projected FY04 Campus Budget (PDF)




FY07 Budget Update Amherst 250 Plan: Step One, An Interim Report Amherst 250 Plan Financial Master Plan Budget Document Archive Home	Approaching the Campus Budget - Part I The Income Earned UMass Amherst, like most major research university campuses, has a variety of income sources that respond to different parts of the campus’ activities. The institution earns almost $600 million each year from all these sources. State Support: The first large block of revenue earned by the campus comes from the state. The sources include direct appropriations as well as the state’s support that waives the collection of tuition from some Teaching Assistants (TAs), Research Assistants (RAs), athletics scholarship holders, etc. The amount of campus revenue a state provides from its tax base varies greatly among the different states. In some states this income reflects enrollment by formulas that recognize the differential cost of lower division, upper division, graduate, and professional instruction. In other states, as is the case in Massachusetts, the amount provided by the state follows a lump sum, cost-to-continue or incremental model. The state calculates a lump sum, cost-to-continue allocation each year by taking the previous year’s appropriation as the base and then adding or subtracting dollars to accomplish the legislature’s goals. The Commonwealth’s practice has often been to increase the university budget in response to labor contract obligations. However, the most recent adjustments reflect reductions as a consequence of state fiscal crises. UMass Amherst currently earns about $152 million or 25.5% of its total revenue from state support. Student Payments: The second of three large sources of revenue is student payments of various kinds. These include out-of-state tuition, the curriculum and other mandatory fees, and a variety of smaller fees for special activities. Taken together, the students including those taught through Continuing Education contribute about $177 million to the campus’ budget, which represents 29% of the institution’s total budget. Research and Sponsored Activity: The third source of revenue comes from the work of the faculty, staff, and students in research and sponsored activity. This campus, like all major research institutions, must compete in the local, state, and particularly the federal marketplace for research support. This is an intense competition, and only outstanding projects survive. We project that the Amherst campus will earn about $95.4 million from the sponsored activities. Most of this is research related, but some significant portion also comes from a variety of service and outreach projects paid for by various sponsoring agencies. Of this $95.4 million (which represents about 16% of total income) we earn about $76.3 from the direct costs of the activities we perform and $19.1 from the recovery of the indirect costs of those activities. Private Giving: A fourth source of revenue that currently reaches $9.8 million comes from private giving. This category includes not only cash received during the year from annual giving but also includes the payout (currently set at about 4.0%) from the campus’ $63.5 million of endowment. Note that while the fundraising total for a given year may well exceed this $9.8 million (in 2003 the campus raised $35 million), these two numbers reflect different items. The revenue number of $9.8 million is the cash from private gifts and endowment earnings made available during the year to spend on campus activities. The $35 million fundraising total includes not only cash received but additions to endowment, capital gifts to be paid out for buildings to be constructed in the future, documented deferred gifts, and gifts of real estate and other tangible property that will later be converted to endowment or cash. The $9.8 million of spendable income represents in part the income from fundraising totals of prior years as those pledges and other deferred gifts mature and begin to yield current revenue. 1 \| 2 \| 3 \| 4 \| 5 \| 6 \| next	Fall 2003 Budget Discussion I. Approaching the Campus Budget II. Approaching the Campus Budget: Research Appendix: Approaching the Campus Budget: Research Projected FY04 Campus Budget (PDF)


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