“The uncertainties that existed then rolled out in unanticipated ways throughout the course of the year, and some of them still pertain today. But, on balance, when we look back at fiscal year 21 from a fiscal point of view, we are very gratified by how well Fordham did,” said Martha K. Hirst, senior vice president, chief financial officer, and treasurer.
Several factors played a part in the positive assessment, Hirst said during the Zoom forum, which was attended by more than 300 members of the University community. Revenue from tuition was higher than predicted, even as the University increased the amount of financial aid it distributed. This was attributed to a higher-than-predicted undergraduate enrollment.
Another significant factor was an increase in housing revenue. Hirst noted that when the University set the budget, it did so under the assumption that campus residence halls would only be occupied half the year. In fact, Fordham was able to welcome students back to campus in the fall of 2020 for the whole school year.
Revenue from parking, conferences, and third-party rentals of campus facilities dropped, but government aid—chiefly from the Higher Education Emergency Relief Fund (HEERF) that was part of the American Rescue Plan passed by Congress in March 2020— helped cover a $13.2 million shortfall. That $13 million was the third of three portions, or tranches of funds the University received, for a total of $41.6 million.
In the end, revenue for the fiscal year 2021 was predicted to be $592.9 million but was actually $617.7 million.
“All in all, a combination of better-than-budgeted enrollments, more housing revenues, and federal stimulus money gave us an unanticipatedly strong revenue performance,” Hirst said.
However, expenses also rose by $17.4 million more than what had been budgeted. Some of the increase came from salaries and wages, as budgeted labor reductions were not carried out. Other increases came from higher meal costs due to students being on campus and COVID-19-related safety expenses. The latter, Hirst noted, was addressed by the budget’s contingency fund, which for the fiscal year 2021 totaled $13.5 million.
“It is a reflection of how important it is to have a contingency line in any operating budget, for unforeseen circumstances,” she said.
Ultimately, the University ended up $7.9 million in the black.
“That is an excellent outcome for us, given all that we encountered last year,” Hirst said.
Looking to the Future
When it comes to this year, Hirst noted that the biggest source of good news continues to be on the enrollment side, as this year’s first-year class is 750 students larger than the year before, which bodes well for tuition revenue. This is predicted to be offset by higher costs for teaching salaries, as well as the fact that the funds from HEERF will have been spent. Nicholas Milowski, vice president for finance and assistant treasurer, noted that the HEERF funds enabled Fordham to shore up its finances and avoid what would have been a shortfall in the fiscal year 2022 of nearly $10 million.
All told, total revenue for the fiscal year 2022 is forecast to be $671.7 million, while total expenses are forecast to be $668.7 million.
“This is a balanced budget at still a more modest level of expenditures than several years ago because we are working our way back from the pandemic, and we still have a lot of unknowns. We’re not back to normal yet,” Hirst said.
Travel and meeting expenses are a good example of the way the budget is slowly improving. Milowski noted that the line item, which plunged to $1.6 million in the fiscal year 2021 from $16.3 million in 2019, will dramatically rise again this year, but only to $10.2 million.
“We do recognize that it is important and that it is mission-critical. We want everyone to understand that we are restoring it as is absolutely necessary, but as you can see, we are still not able to anticipate or expect the same level of expenditure that we would in a normal year, which for us was three years ago,” he said.
Outlook for 2023
Inflation is a big concern for the future, and although she said it is expected to ease by this time next year, Hirst said that there are already plans to tap the contingency fund to cover expected increases in costs. One cause for optimism is the fact that Fordham is well-positioned to deal with rising energy costs.
“We have some utility contracts that are locked in for another year or so, so we’re going mitigate some of the utility increase that we otherwise would have, and that’s a credit to our facilities and administration team to have anticipated that,” she said.
One new cost that is expected to arrive is the operating expenses for the new campus center on the Rose Hill campus, which are estimated at $10.8 million a year. Undergraduate tuition, which was frozen during the pandemic, will need to be addressed as well, as the federal stimulus dollars that enabled Fordham to hold off on an increase will not be available again.
“We’ll continue to support students with significant financial aid, but there doesn’t seem to be a university or college around that isn’t raising tuitions this year, especially after freezing the undergraduate tuition rate, as Fordham did,” said Hirst.
“It’s one of the realities of the time we’re in.”
Educating for Justice
Through it all, Milowski said that all decisions will be based on Fordham’s current strategic plan, titled Educating for Justice. Major priorities in the plan include educating students as global citizens & transformative leaders for justice in the innovation age; excelling across the natural and applied sciences and allied fields to promote social change and equity; and cultivating a diverse, equitable, inclusive, caring, and connected community that promotes each member’s development as a whole person.
He cited the University’s new Ph.D. in computer science as an example of a development driven by Fordham’s strategic plan. Hirst echoed him, noting that “the lion’s share” of government-sponsored research is in STEM disciplines.
“It is exciting to contemplate that we can begin to grow STEM initiatives at Fordham, not only to attract dynamic students and faculty but also that there might be greater opportunities to compete for some government-sponsored research opportunities,” she said.
One of the brightest developments of Fordham’s financial picture is its endowment, which passed $1 billion for the first time in history this year. This amount is on par with Fordham’s peer and aspirant schools and bodes well for the future.
“It tells the outside world about our fiscal health. The strength of it helps us enormously when we’re going to borrow money, such as for the campus center, or to refinance some of our bonds,” Hirst said.
“Everybody at Fordham wins when we have a strong endowment.”
The full recording of the fall 2021 budget forum is below: