2022-23 Revised Operating Budget

2022-23 Operating Budget [PDF]

On Saturday, September 24, 2022, the Board of Managers adopted the 2022-23 revised operating budget. The revised budget reflects projected enrollment for the fall semester and the updated endowment spending rate, based on the endowment’s estimated market value as of June 30, 2022. The revised budget provides a blueprint of anticipated revenues for operations.

There are several elements to the revised budget worth highlighting:

Operating Revenues

ENROLLMENT AND Term Bill

On-campus enrollment is budgeted at 1,670 students for the 2022-23 academic year, with an average of 63 students expected to participate in off-campus study programs. The 2022-23 cost of attendance (term bill) for full-paying students is $77,354. These costs include tuition, room, board, and mandatory fees, and represent an increase of $4,148 from the 2021–22 academic year.

Financial Aid

The Board approved a $54 million financial aid budget for the 2022-23 fiscal year, an increase of 9% from 2021-22. The budget reaffirms the College’s commitment to making a Swarthmore education accessible to qualified students of all economic backgrounds. Approximately 53% of Swarthmore students are projected to receive need-based financial aid from the College, with an average award of $57,842 per aided student for 2022–23.

Endowment Spending Distribution

The College’s endowment distribution for FY 2022-23 will be $111.2 million, an increase of 13% from 2021-22. The increase in endowment distribution will cover additional operating costs from inflation, which includes providing competitive compensation for faculty and staff, the higher level of funding for capital improvement projects, and the higher allocation for financial aid. The College’s policy is to maintain a spending rate between 3.5% and 5%. For 2022-23, the spending rate is 4.33%.

Gifts and Grants

This category includes annual giving to the Swarthmore Fund and federal and state support for programs. The budget for the Swarthmore Fund is $5 million for FY 2022–23.The expected level of federal and state support will increase slightly to $580,000 for FY 2022-23, with no expected changes in federal support for student work-study and institutional support from Pennsylvania.

Other Income

This category includes a variety of income sources such as application fees along with activities from facility rentals, summer housing, and dining and campus store operations. The approved budget remains at $4 million. Revenues from application fees have grown as a result of the increase in student applications. Events management income will increase as summer camps and conferences return during the summer of 2022 along with summer housing income for students performing research or working for campus departments. Likewise, we expect dining operations and sales at the Campus & Community Store to benefit from an increased number of visitors returning to campus with the reduction of COVID-19 restrictions.

Compensation

Faculty and staff compensation is budgeted to grow by 6.8%, driven by inflation, an increase in headcount, and benefits costs. The faculty salary budget will grow 6.7%, with an inflationary base increase of 4.25% for continuing faculty and an adjustment by faculty rank to remain competitive with our peer institutions. The College has a long-standing practice of using peer data to determine market-based adjustments to faculty compensation.

The staff salaries and wages budget will grow by 7.2%. Eligible, non-student continuing employees will receive a 5% inflationary increase. The budget adds strategic growth for Dining Services in anticipation of the opening of Phase 1 of the Dining and Community Commons, and funds a number of positions that were deferred due to limited resources during the pandemic. In addition, the budget includes a pool for adjustments to base salaries for staff position reclassifications, replacements, promotions, and retention. Lastly, we anticipate a 6.3% increase in benefits costs, largely driven by growth in health care costs and headcount.

Departmental expenses

Current expenses, excluding the Inn at Swarthmore operations, will increase by $4.6 million or 9.8%. Included in this year’s budget are resources to fund equipment purchases, maintenance of campus technology, and professional services. In addition, funding will support the College’s strategic planning process, a College-wide messaging and visual identity initiative, and a new customer relations management system in Advancement, while also allowing Human Resources to conduct a comprehensive compensation review.

Contingency

The contingency is being held flat at $2 million. Overall, the operating contingency represents approximately 1% of the College’s estimated expenditures.

Capital Budget

The allocation to the College’s capital budget increased by $3.3 million to $16.6 million. The 2022-23 capital budget was approved by the Board at its February meeting. An additional $300K is being provided for maintenance of residential properties owned by the College.

Debt Service

The College’s debt is all fixed-rate, and the principal and interest expenses are the College’s contractual obligation. The debt service budget revises interest costs to $11.4 million, with the $9.5 million principal repayment.