Financial transparency series continues with conversation on University spending, housing
Mariah Rush | Tuesday, April 2, 2019
As a continuation of their financial transparency series, student government organized “Casual Conversations with Shannon and Lou,” where vice president of University Relations Lou Nanni and vice president for finance Shannon Cullinan delivered a presentation breaking down how the University allocates its funds in Carey Auditorium Monday evening.
The event was an effort to continue the goal put forth by the McGavick-Gayheart administration to “increase transparency,” outgoing student body vice president and senior Corey Gayheart, who facilitated the event, said.
“One of the focuses during my time as student body vice president has been to increase transparency on campus — whether it be student government or administrators or how the University operates,” he said.
Nanni said the years he and Cullinan spent working at the Center for the Homeless were crucial to their current goals of making the Notre Dame community more welcoming.
“I would say that’s been a really formative experience on us … looking at Notre Dame and how to make it a more inclusive place and to make Notre Dame inclusive on a number of different levels,” Nanni said.
Nanni began by addressing new construction on campus. He said the money used to build new buildings around campus does not come out the operating budget of the University, meaning it does not come out of student tuition.
“The money isn’t coming out of your tuition, room and board dollars — it’s rather being paid for by philanthropy,” he said. “That would be philanthropy for not only the physical construct, but for the ongoing maintenance.”
Cullinan and Nanni showed an overall breakdown of the University’s revenue, which showed net tuition revenue is only 32 percent — a statistic Cullinan said often “surprises people.” Endowments contribute to 38 percent, the largest source of revenue Notre Dame has.
“Over the next 10 years I would guess that [endowments] will make up around 50 percent of revenue,” Cullinan said.
Cullinan said setting money aside for undergraduate need-based aid is the University’s first concern when allocating funds.
“It’s the number one priority, and it will be the number one priority for the next five to ten years, and even beyond that,” Cullinan said.
Nanni said his department is trying to raise $1 billion for financial aid in their current budget campaign time frame, which goes from 2013 to 2020 — a large increase from the last campaign’s goal of $250 million.
“It’s the single-largest priority and right now we have about $800 million raised so far,” Nanni said.
“We need to redouble our efforts there,” Cullinan added.
Cullinan then broke down where all fundraised capital goes, noting 64 percent goes to labor.
“We’re a highly labor-intensive institution … it’s the biggest chunk of the expenses by a long shot,” Cullinan said.
The two turned to questions from the audience, some of which touched on housing policies, dorm inequality and the recent admissions scandal affecting multiple institutions of higher education across the country.
One student asked about the six semester housing policy and what considerations were taken into account concerning the financial constraints some students may be under.
“They didn’t actually invite me to that party when they were thinking of doing the six semester policy,” Cullinan said. “That was residential life-driven, I’ll just say that.”
Cullinan said since the new policy will require more people to pay for room and board, the Office of Residential Life is looking to offer seniors more incentives to stay on campus, including laundry discounts, different dining plans and reduced prices of single rooms.
“I think you’re going to get a decent announcement soon where that increment is going to be spent on incentives for seniors and others to stay,” Cullinan said. “I think student affairs and student life are trying pretty hard to show students they are going to use it in this way.”
Nanni added he thinks the dorm environment is a key part of Notre Dame’s community and dorms are a “melting pot” for diversity.
“The primary motive was — in conversations with [University President] Fr. John [Jenkins] — that residence life is one of Notre Dame’s distinctive qualities,” Nanni said. “Right now, each one of the dorms has been established to kind of be melting pots.”
Another student asked about dorm inequality, specifically concerning students living in dorms with not as many amenities as other dorms, although everyone is generally paying the same rate for room and board.
Nanni said their efforts to renovate dorms throughout the year and during the summer has been a response to this issue.
“It’s taking them offline for an entire year and it’s going in and replacing the whole HVAC system,” Nanni said. “It’s increasing social and exercise space in the dorms, adding kitchens, making some triples doubles and some doubles singles.”
Nanni said finding the money for renovations is often difficult because people often do not want to donate to a building already named for someone else.
“It’s a major cost center for us because it’s very difficult to raise the money for significant renovations for buildings that are already named for someone else,” Nanni said.
Senior and outgoing chief of staff for the McGavick-Gayheart administration Briana Tucker asked about adding air conditioning to older dorms being renovated.
“All the dorms who don’t have it, we are looking into it,” Cullinan said.
“It is definitely dependent on the size of the dorm and the age of the dorm,” Nanni added. “It’s at least a few million dollars per dorm.”
Gayheart asked the two what their top priorities are for the budget going forward.
Both agreed their top priority is financial aid and helping lower income students.
“Low-socioeconomic students are our top priority,” Cullinan said.
“I can tell you first hand how difficult it is to break cycles of poverty, dependency and violence,” Nanni added. “We need to increase the number of students we admit from these groups … but we don’t want Notre Dame to become a school that only focuses on admitting the very wealthy and the very poor, and squeeze out the middle class.”
Another student asked about the national admissions scandal and how Notre Dame can avoid a similar issue.
Nanni stressed admissions’ focus on putting together a “diverse cohort.” He added the process is complicated, especially concerning families who would like to give large monetary gifts.
“From a development perspective, we try to be very careful,” Nanni said. “If someone is from a family of means, and they’ve got a kid who is a senior and would like to make a gift to the University, and we know the kid will be applying … we just ask them to hold off on giving. It’s not like you want to assume that person’s motive is bad, but at the same time we don’t want there to be any kind of connection.”
Nanni also said legacy students have also been receiving attention following the admissions scandal.
“We get criticized a lot for legacy acceptances as well, yet our traditional underrepresented minorities are significantly higher now than the legacies,” Nanni said. “So you have to look at it all in tandem.”
Addressing rising tuition rates, Nanni said there is a “cost to excellence.”
“We could definitely decrease our costs and sacrifice excellence, but I don’t think that’s what people want,” Nanni said. “People still expect there to be a standard of excellence in all that we are doing — not just in the classroom but beyond, and that comes with a cost. Trying to figure out how to do both and keep those dollars down is a big challenge.”