University Financial Update
We are writing to share with you an update on Columbia’s financial position. We have posted our audited financial statements for the fiscal year that ended June 30, 2021, and are pleased to share results that are much better than were anticipated in the winter and spring of last fiscal year, both on an operating basis and for our endowment, which builds our financial base for the future.
Our financial results in any given year reflect the revenues and expenses of a complex research institution, with thousands of students, patients, and research projects in our care. Revenues from each of these activities were challenged in 2021—we estimate that the negative revenue impact from COVID-19 in fiscal year 2021 was a loss of over $400 million, even after substantial federal support, as we experienced international student deferrals, managed significant losses in housing as we purposefully reduced our on-campus student population and froze rent levels, and continued to see impacts on patient revenues at CUIMC. Additionally, to provide support to our education and research mission during this time, we made critical investments to keep our campus safe, conduct a robust testing program, and enhance our classroom technology to reach our students all over the world. With your help and the financial discipline of our deans and administrative heads, we collectively worked to offset revenue losses and additional expenses with substantial cost constraint in other areas, and brought the net financial impact due to COVID-19 to only $100 million of losses in FY21.
This collective effort enabled us to fulfill our mission as well as maintain full employment and end certain austerity measures earlier than planned. Our fiscal year 2021, perhaps more than any other year, reflects the hard work, generosity, and creativity of the Columbia community. Together we should share pride in having managed our institution through unprecedented operational and financial challenges, and celebrate that we have emerged a financially stable and a stronger institution in so many respects.
Our final results, available online, reflect an aggregate operating surplus of $150 million, which provides us with funds to maintain our physical plant and campus facilities, and also represents current year income in funds that are restricted for purposes where the activity and related expenditures will span multiple years. This is roughly $100 million below our typical level of operating surplus, but thankfully, it points us forward. We are also pleased to share our endowment results, which reflect an annual return of 32.3% in fiscal 2021, and an ending endowment value of $14.35 billion.
Unprecedented endowment gains and a solid outlook for the current fiscal year offer an opportunity to look forward with enthusiasm to accomplishing the goals and priorities we had pre-pandemic. Having emerged on solid financial footing, we have deepened our conviction that our course is true. We recognize that to deliver excellent education, research, and patient care, and to have a direct positive impact on our society through action—what we call our “fourth purpose”—we must continue to prioritize the recruitment and retention of the most talented faculty and staff, maintain access for students from all backgrounds, and invest in the programs, spaces, and technology that will foster a robust intellectual environment for our community.
As they do every fall, our deans are engaging in long-term planning efforts. This fall, with a view ahead that reflects a phasing in of 2021’s endowment gains over multiple years, our shared commitment to these priorities represent the core of each school’s future financial plan. Because the majority of investment gains eventually materialize as increases to individual school budgets, this allows each dean to best match the growth in financial aid endowments, professorships, and endowed programmatic funds to meet the needs of their students and faculty.
Overarching and interwoven with school planning are University mechanisms to facilitate these goals. Earlier this year, we announced the Student Support Initiative as our most significant fundraising campaign to date wholly focused on financial aid across every school. Today we announce a new investment of $60 million in endowment to create matching funds for gifts to financial aid, reflecting our institutional commitment to this campaign. President Bollinger is also making funds available through an Early Career Professorships Program to support the hiring of new faculty, which augments our schools’ recruiting efforts and strengthens our investment in tomorrow’s intellectual leaders. We will complement this with the launch of a Curriculum Innovation Initiative to foster new technological approaches and interdisciplinary project-based learning that will invigorate our foundational and capstone courses and have a far-reaching impact on the student experience.
With regards to space and facilities, we announced this spring an investment in renovations of physical space on the Morningside campus, and together with our recent commitment to sustainable construction on all campuses, we advance our commitment to improve University facilities while realizing our ambitious but essential climate goals. New investments to support the eventual electrification of the campus as part of that sustainability commitment, along with school-level investments in instructional and laboratory space, including a substantial investment in new research space at CUIMC, will further our momentum. A solid financial position will enable us to achieve these objectives with speed and impact.
Before we look too far ahead, we want take a moment in the present to underscore our appreciation to you, all of our faculty, researchers, and staff, for the commitment you have made across our University over the past 18 months. We are both grateful and excited to chart the course forward with you. Thank you for all you have done and do for Columbia.
With appreciation and warm regards,
Mary C. Boyce
Professor of Mechanical Engineering
Anne R. Sullivan
Executive Vice President for Finance and Information Technology