GOAL 7: TO OBTAIN THE RESOURCES NEEDED TO SUPPORT THE UNIVERSITY'S STRATEGIC GOALS WHILE MAINTAINING PRUDENT, CLEAR FINANCIAL MANAGEMENT STRATEGIES CLEARLY ARTICULATED TO ALL CONSTITUENCIES OF THE UNIVERSITY.
Prudent financial management has been one of the hallmarks of Rice since its founding. Our endowment, now valued at approximately $1.9 billion, is an enormously valuable asset that sets us apart from most other institutions of higher education.[5] Wise stewardship of our investments and active cultivation of new contributions have been responsible for our favorable financial position, and both will continue to be necessary to maintain it in the future. We acknowledge and support the stewardship and fiduciary responsibility which have enabled successive Boards to manage Rice's resources so productively. The balance that needs to be maintained between continued investment of endowment earnings and current and future spending is a trust that our Boards of Governors have taken seriously. Students, faculty, staff and alumni have all benefited from these actions.
There is an ongoing need for all constituencies of the university to be as fully informed as possible about the state of the University's finances. Widely disseminated and timely information about the University's fiscal circumstances can only improve the quality of internal dialogue on matters of policy and institutional priorities. At the same time, faculty, staff, and students alike are more likely to embrace new initiatives when they can participate in an informed debate over associated costs and benefits. To address these issues we recommend the following:
Initiative 28. The University will accelerate its present policy of disclosure to the Rice community of appropriate financial information related to the budget and other resource allocations.
We believe that the University should now take a more active role in educating the faculty regarding the rates of return needed to continue our endowment growth and the rate at which it is feasible to spend earnings. Greater knowledge and understanding are also needed about the budget and about how development efforts function in support of the University's financial planning.
Initiative 29. Through a continuous planning process, the University will link its expanded fundraising initiatives to its strategic priorities.
We must determine our fundraising initiatives carefully, requiring a compelling case for each. Rice has a history of independent, rather than comprehensive, fundraising goals. Therefore, an important objective is to determine what our fundraising priorities are and how each effort relates to the university's comprehensive vision of its needs. Moreover, because the university has a relatively short history and small alumni base, it becomes even more important to establish avenues for communicating what Rice is about, so that academic and administrative perspectives remain at the center of advancement efforts, and constituents who wish to support Rice's initiatives are aware of the University's priorities. Only in this way can we match faculty and departmental aims with broader University goals, and these in turn with donor interests and capacities.
Changes in the economy and in federal funding also make it imperative that Rice establish a systematic, long-term, and inclusive advancement program. Given the relatively small number of Rice alumni, we must engage them as fully as possible in fundraising efforts. But we also need to develop a broader national and international constituency to support our educational, research and community activities. As we engage in these outreach efforts, we will need to understand and be responsive to Rice's constituents. Investments of time, money and personnel will have to be made to create an effective development framework. Success in fundraising is, after all, an extension of the ongoing clarification of the University's goals through active strategic planning. If the University pursues a plan that is consistent with its clear and lofty mission, the community will respond. If we form valuable partnerships with industry and other institutions, for the benefit of society, new friends will come forward to share our goals and to help achieve them. In turn, we must keep the community informed about campus activities and invite them to the campus on a regular basis.
William Marsh Rice wisely sought to ensure that qualified students "of slender means" would have access to high quality education at Rice. Although we now charge tuition, the spirit of Mr. Rice's original aim continues in our financial aid policies and our relatively low tuition fees. We are, in fact, one of the few remaining institutions in the nation to maintain a need-blind/full-need policy of financial assistance,[6] guaranteeing that students from less affluent backgrounds have access to a quality education. We have recently gained national recognition for the fact that our graduating seniors carry a smaller average debt burden than any other college or university, public or private. Low tuition is deeply rooted in the Rice culture. We affirm it and strongly recommend its continuation.
Initiative 30. Rice will continue a prudent approach to tuition pricing. We will carefully weigh the benefits of additional net revenues against the importance of our relatively low tuition in attracting outstanding students to Rice.
In determining the future of tuition policy, various considerations must be brought to bear in addition to Rice tradition. Many private institutions have had to introduce severe cost control measures in recent years, following a long period of steep tuition increases to levels that are high even for upper middle class families. These schools are now trying to hold tuition increases to a more moderate rate of growth.[7] At the same time they are finding that net revenue gain is dropping in spite of the rise in gross tuition income. This is largely because financial aid expenditures have increased even more rapidly than tuition charges in order to retain their institution's appeal for students from a wide spectrum of economic backgrounds.[8]
Rice is in the attractive position of being able to advertise a current student budget (i.e., tuition, fees, room and board, plus incidental expenses) of $19,800. This is only 70% of the median student budget at COFHE universities.[9] The Maguire Associates' market survey of prospective students and their parents found that among potential Rice students, the University's perceived value is established first and foremost by its high level of quality in instruction, research, and student life. Maguire further found that a second important factor that potential students and their families find appealing about Rice is our tuition. Rice's tuition indexing plan provides students and their families the assurance that, once enrolled, tuition increases will equal the inflation rate. In setting future tuition policy, we must carefully weigh the benefits of additional net revenues while at the same time, acknowledge the importance of consumer attitudes toward college costs.
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