Provost presents 2019-20 budget plan to Faculty Senate

The senate also heard a report on Ways of Thinking, Ways of Doing, the undergraduate general education requirement.

At the Faculty Senate meeting on Thursday, Provost Persis Drell presented a cautious 2019-20 budget plan for Stanford University that provides increased student support and addresses some of the university community’s affordability issues while reflecting the constraints on university funding sources.

In presenting the $6.8 billion consolidated budget to the Faculty Senate, Drell said that strategic decision making was essential in setting the priorities for the budget. The guiding principles for the 2019-20 budget were to provide for the current pressing needs of the campus community and to make strategic investments for the future that align with the priorities in the long-range vision currently being developed.

Provost Persis Drell presenting the budget plan to the Faculty Senate on Thursday. (Image credit: L.A. Cicero)

Also at the meeting, the senate heard a report on the Ways of Thinking, Ways of Doing undergraduate general education requirement.

Budget presentation

In her opening comments, Drell said that in the coming year the university’s budget - especially its general funds - would be under considerable pressure. "Stanford’s resources are significant, but so are our aspirations and ambitions," she said.

There are three components to Stanford’s budget plan: the Consolidated Budget for Operations, which includes all of Stanford’s operating revenue and expenses for 2019-20; General Funds, part of the consolidated budget, which consists of funds that can be used for any university purpose and support many of the core academic and support functions of the university; and the Capital Budget, which is set in the context of a multi-year Capital Plan.

"Affordability is a central issue for every segment of our population - students, faculty and staff," said Drell as she outlined some of the key allocation priorities for the 2019-20 budget. In additional to a solid faculty and staff compensation program, funding priorities included:

  • Student financial support: The university will increase the budget for undergraduate financial aid by 7.2 percent to maintain its generous need-based aid program. The increase also reflects the elimination of home equity in the calculation of financial aid eligibility to help middle-income families. Overall financial support for Stanford students and postdoctoral scholars will total $879.4 million in 2019-20, an increase of 7.2 percent from last year. Graduate stipends and salaries for resident advisers, teaching assistants and postdoctoral scholars will also increase.
  • Student mental health: Calling it the "single highest priority and most compelling need," Drell said the budget invests in increases in student mental health services and programs. They include adding four clinicians to Counseling and Psychological Services (CAPS) to improve student access and reduce wait times and expanding the range of services at CAPS to provide students with appropriate resources and specific interventions.
  • Housing: More than 50 percent of the capital budget is designated for housing, including the completion of the Escondido Village Graduate Residences, construction of faculty and staff housing at 500 El Camino Real in Menlo Park, and a planned new undergraduate housing and dining complex. In addition, the university will continue its budget for subsidies for off-campus housing for 1,270 Stanford graduate students while the Escondido Village project is completed.
  • Faculty: In alignment with goals of the long-range vision, Stanford will boost funding to the Faculty Incentive Fund, which was established to help increase the diversity of the faculty. The budget also allows for investments in shared platforms and resources to support cutting-edge research to accelerate the path to application.


Drell spent a significant portion of her presentation explaining how Stanford’s endowment operates, with special emphasis on how the payout rate is calculated each year.

The Budget Story 2019-20

o Stanford’s resources are significant, but so are our ambitions
Infrastructure for the future

Source: Stanford University Budget Plan 2019/20, Faculty Senate, May 9, 2019

Stanford has 8,600 separate endowment funds, of which 78 percent are restricted to funding specific programs such as endowed professorships and student scholarships. Income from non-restricted funds supports a wide variety of programs, services and activities at Stanford.

Drell said that there are two goals for the endowment fund: to maintain "intergenerational equity," which means ensuring that gifts to the fund keep the same "purchasing power" in perpetuity, and stability. In order to balance those goals with the reality of fluctuations in the market, the university employs a "smoothing formula" to calculate the endowment payout rate each year with a target payout goal of 5.5 percent.

Stanford sets a payout rate based on the share price on November 30 of the prior year, and the Board of Trustees approves the payout in February. For 2019-20, the payout to an individual endowment fund will increase 2.1 percent, which is below anticipated cost rise and is a contributor to the constrained funding environment facing the university.

Capital budget

Drell also presented a 2019-20 Capital Budget, which is part of a multi-year capital plan. She said that the university was in the process of completing a period of significant growth that included construction of the Science and Engineering Quad, Stanford Redwood City and the Escondido Village Graduate Residences. She emphasized that in addition to funds for expanding academic facilities, more than 50 percent of the capital plan was devoted to housing, which will address some of the affordability issues facing the campus community.

The Capital Budget calls for $900 million in expenditures in 2019-20, supporting several construction projects that, when fully completed, will total approximately $3.7 billion.

The budget plan will go to the Board of Trustees for approval at its June meeting. A formal budget document will be available on the  Stanford Bondholder Information website  following board approval.

Ways of Thinking, Ways of Doing

Aron Rodrigue, the Daniel E. Koshland Professor of Jewish Culture and History in the School of Humanities and Sciences and chair of the Breadth Governance Board, and Bruce Clemens, the Walter B. Reinhold Professor in the School of Engineering and chair of the Committee on Undergraduate Standards and Policy, gave a comprehensive report on the Ways of Thinking, Ways of Doing (Ways) general education breadth requirement system.

Launched in 2016, Ways courses are meant to expose undergraduate students to disciplinary breadth and essential capacities as recommended in the SUES report, a comprehensive review of undergraduate education completed in 2012. Undergraduate students must take 11 courses in eight Ways categories.

In preparing their report, Rodrigue and Clemens looked at a wide variety of data, including course-taking patterns by major, student satisfaction with the courses, the course certification process and ability of faculty and students to navigate the system.

Among their conclusions was that while students generally like Ways courses and have greater flexibility than under the previous system, general course-taking patterns did not change much after the introduction of Ways. Rodrigue said that, for the most part, students don’t take many Ways courses outside of their primary area of study beyond the minimum required. In addition, Rodrigue and Clemens had limited information about the extent of student learning of Ways skills and capacities.

During the discussion following the presentation, several senate members voiced their concern that Ways wasn’t meeting its goal to encourage breadth of study among undergraduate students.

Rodrigue encouraged the senate to consider the Ways report in the context of the two undergraduate initiatives currently underway as part of the long-range vision, First Year and the Future of the Major.

Senior Vice Provost for Education Harry Elam pointed out that when Ways launched in 2016, three new capacities "essential to a Stanford education" were addressed: diversity, creative expression and ethical reasoning. He suggested that improvements to academic advising and a renewed focus among faculty on pedagogy would strengthen the Ways system.

Other business

Drell announced that two Stanford committees have been established to conduct further review of the university’s policies related to foreign research engagements. A committee reporting to the vice provost and dean of research is reviewing all relevant policies and procedures. In addition, a subcommittee of the Committee on Research is considering how to balance national security concerns and regulations with university values such as academic freedom, openness in research and nondiscrimination in research agreements. She referred senate members to the Office of the Vice Provost and Dean of Research website for more information.

The senate also voted unanimously to approve a motion to amend the faculty discipline statement to update with the Office of Civil Rights resolution agreement.

The full minutes of the meeting, including the questions and answers that followed the presentations, will be available soon on the  Faculty Senate website .

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