Provost Jenny Martinez presented the 2024-25 budget plan to the Faculty Senate on Thursday, highlighting a focus on the university’s core missions of teaching and research.
Provost Jenny Martinez unveiled Stanford University’s 2024-25 budget plan to the Faculty Senate on Thursday, emphasizing strategic investments in research, teaching, and clinical care while building capacity to address affordability and infrastructure challenges.
"The budget group worked hard this year to say yes to some things that we thought were really important for the university but also to say no to other things to leave room for the things that we know and anticipate we may need to pay for in the future," Martinez said.
In separate remarks, President Richard Saller updated the senate on the investigation into a protest on Monday during which a group entered a campus building. Disciplinary proceedings have begun, and students whose actions threaten the community’s safety will be immediately suspended and barred from Commencement, Saller said.
"The peaceful expression of viewpoints, which we value, can and should occur within a university’s time, place, and manner provisions, without vandalism, and without jeopardizing the safety of our community members," Saller said. Read his full remarks here.
The numbers
The 2024-25 budget plan includes the $9.7 billion Consolidated Budget for Operations, which involves all’of the university’s operating revenues and expenses; the $2.1 billion General Funds Budget, which is part of the consolidated budget and used for core academic and support functions; and a $687 million Capital Budget within a $3.6 billion three-year Capital Plan.Key factors contributing to the budget this year include moderating inflation, a modest endowment payout increase for 2024-25, continued operational shortfalls for auxiliary units such as Residential and Dining Enterprises (R&DE), and significant systems and capital infrastructure needs, Martinez said.
Total revenues are projected at $9.7 billion, and expenditures are projected to be $9.5 billion for 2024-25. Revenue highlights include a 9% increase in health care services, primarily reflecting payments from the hospital for faculty physician services, now the largest revenue source in the Consolidated Budget, Martinez said, up from a little less than a third of the budget 10 years ago to 41% today.
The budget also projects a 6% increase in sponsored research, reflecting strong growth as the university has increased investments in its research mission. "It’s a sign that our faculty are doing fantastic work supported by the university," Martinez said.
Overall student income growth - which includes tuition, room, and board - is projected at 3% due to a decline in enrollment following the graduation of fifth-year students who deferred their start dates due to COVID-19, Martinez said.
The budget plans for a 9% increase in compensation expenses, which reflects a market-based competitive salary program, benefits costs, and salary enhancements.
The budget also projects a 6% growth in total financial aid and a 5.6% increase in total student support. Over the years, the median parental contribution to tuition for undergraduates has gradually decreased, and in the 2024-25 budget plan, 30%, or $79 million, of the total funding for undergraduate need-based scholarships is expected to come from general funds.
The 2024-25 budget plan also takes into account the collapse of the Pac-12 Conference and implications from Stanford joining the Atlantic Coast Conference (ACC). Membership in the ACC requires Stanford to contribute a share of its media revenue to the ACC for the first 10 years, creating a projected budget shortfall, Martinez said. To address the deficit, $40 million from the Office of the President’s discretionary fund will support athletics for the coming fiscal year. Athletics will also explore new revenue streams, philanthropy, and institutional support to stabilize its budget.
General fund allocations include support for research and education mission facilities such as the Hopkins Marine Station and the new Data Science and Computation Complex; efforts to bolster research and elements of the teaching program, including the Capstone requirement for humanities and sciences majors; and student services such as the Office of Accessible Education, computer science student affairs, and enhanced athlete dining.
The university is considering competing priorities for general funds in coming years, such as research support, physical and digital infrastructure needs, and student residential life.
"We know that we have some big expenses that we’re going to need to invest in as a university to support our excellence in our core missions of research education," Martinez said.
As such, the Provost’s Office put together a general funds study group - including trustees, faculty, and staff - charged with identifying general funds to address unprecedented infrastructure, affordability, and programmatic needs. This group is also tasked with considering revenue enhancements, cost reductions, and internal funding transfers to address those needs, Martinez said.
The $687 million Capital Budget is set in the context of the $3.6 billion three-year Capital Plan, which includes the total cost of all projects planned or underway between 2024-25 and 2026-27.
Its funds will support major projects like the Graduate School of Education renovation and new building; the Data Science and Computation Complex; and Electric Reliability Improvement - Phase 1.
’Investing in our people’
Several senators expressed concerns about athletics’ long-term funding and its place within the university’s priorities. While it wasn’t an ideal situation to join the ACC, Martinez said the university wished to follow through on its commitment to roughly 800 Stanford student-athletes so that they could compete at the highest academic and athletic levels."We owe it to our student-athletes, particularly those who are here, but also those who are coming, to continue to emphasize the degree to which we appreciate the nature of what we’ve tried to build here at Stanford," said Condoleezza Rice, the Tad and Dianne Taube Director of the Hoover Institution. "And what we’ve tried to build is an intercollegiate model that really does make them student-athletes."
Martinez emphasized the importance of additional revenue sources to support athletics and the involvement of faculty and the Faculty Senate in particular in decision-making around athletics issues. "As the fundamental nature of college athletics is very much in flux, the decisions about what we as a university will do and how we will approach those questions are ones that must involve the faculty as well as students, our alumni, trustees, and others who care a lot about Stanford and our mission," Martinez said.
In response to a question from Lawrence Berg, a doctoral candidate in chemistry and Faculty Senate liaison for the Graduate Student Council, Martinez acknowledged ongoing negotiations with the graduate student union as a critical budget consideration, noting it as one of several uncertainties in the budget.
When asked about what trends are seen in the university’s budget over the last 10-20 years, Martinez highlighted significant growth in the School of Medicine, increased undergraduate financial aid, and investments in health care and housing.
"We really have been investing in our people," she said.
Martinez also noted the strong expansion of research across the university, including the Stanford Doerr School of Sustainability, the Stanford Institute for Human-Centered Artificial Intelligence (HAI), and new interdisciplinary institutes.
The budget plan will go before the Board of Trustees for approval, with a formal document to be made available online upon approval.
The search
In remarks to the senate, Martinez also announced the appointment of a search committee for the next dean of the Graduate School of Business (GSB), as Dean Jonathan Levin will become university president this fall.The search committee includes: co-chair Jenny Martinez, provost and professor of law; co-chair Neil Malhotra, the Edith M. Cornell Business Professor and professor, by courtesy, of political science; Jennifer Aaker, the General Atlantic Professor at the GSB; Bill Barnett, the Thomas M. Siebel Professor of Business Leadership; Cori Duncan, alumna, BA ’95, MBA ’02; Stephanie Kalfayan, vice provost for academic affairs; Arvind Krishnamurthy, the John S. Osterweis Professor of Finance; Rebecca Lester, associate professor of accounting; John Onderdonk, MBA student; Daniela Saban, associate professor of operations, information, and technology; Juan Carlos Suarez Serrato, the Edward P. Rust Professor of Economics.
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Stanford Graduate School of Education Dean Dan Schwartz and other education scholars weigh in on what's next for some of the technology trends taking center stage in the classroom.
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