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TCU 360: TCU expects $90 million shortfall to budget

TopFrog

Lifelong Frog
TCU expects $90 million shortfall to budget

By Renee Umsted

The fallout from COVID-19 is causing a $90 million shortfall in TCU’s operating budget.

Chancellor Victor Boschini outlined the university’s position Wednesday in an email to faculty and staff.

The shortfall, about 16% of the university’s $558 million budget, results from a “slight decrease” in enrollment, increases in financial aid for online classes and need-based aid, and changes to athletic programs with lower anticipated revenues, Boschini wrote.

Read more at https://www.tcu360.com/2020/08/tcu-expects-90-million-shortfall-to-budget/
 

Big Frog II

Active Member
The endowment is invested and the school uses the funds along with tuition and other income to pay the bills. Revenue is going to be $90 million less this year, so the budget will have to be cut. When you start taking additional money out of your endowment, you decrease the amount to invest and decrease the amount you can make off the endowment for next year.
 

CryptoMiner

Active Member
I'm ignorant to how finances work, however isn't this where are $1.71 Billion endowment steps in to fill in some of the gaps?

No, the endowment funds are specifically designated funds for scholarships, faculty positions, etc. and are not unrestricted funds for operations.

However TCU has about a $1.8 billion unrestricted fund balance that does not include the endowed funds so they are good for now.
 
In 2019, TCU's endowment was listed at $1.71 billion. In the latter part of that year, TCU announced

their intention to open the 'Lead On Campaign' designed to raise an additional $1 billion dollars to

be added to the 2019 endowment. On October 24, 2019, 'TCU 360' reported that the 'Lead On Campaign'

had already raised $600 million of its $1 billion dollar goal. So, does anyone have the slightest clue as

to the current amount of the university's endowment?
 

HToady

Full Member
So my simple finance mind tells me that budget is the amount you have to spend.This comes from revenue from which the University determines it's spending ability.

Wouldn't it be correct to say that if you have less revenue you must cut cost, and wouldn't those cost include the already reductions to 401K matches and wage freeze already implemented. In addition, if no one (or less) is on campus, wouldn't you have lower utilities, less trash, less over all maintenance of the facilities?

I don't know seems like a half story to me....
 

stbrab

Full Member
I'm ignorant to how finances work, however isn't this where are $1.71 Billion endowment steps in to fill in some of the gaps?
Not necessarily. Most endowments are "permanently restricted" by the donors, meaning the corpus can't be touched. Generally the earnings are available to be used, but there may also be restrictions on how the earnings are used. I'm not knowledgeable about TCU's specifics. Maybe others that post are.
 

BABYFACE

Full Member
So my simple finance mind tells me that budget is the amount you have to spend.This comes from revenue from which the University determines it's spending ability.

Wouldn't it be correct to say that if you have less revenue you must cut cost, and wouldn't those cost include the already reductions to 401K matches and wage freeze already implemented. In addition, if no one (or less) is on campus, wouldn't you have lower utilities, less trash, less over all maintenance of the facilities?

I don't know seems like a half story to me....

No need to worry, a Hollywood accounting firm is on their way to sort it out.
 

Brog

Full Member
In 2019, TCU's endowment was listed at $1.71 billion. In the latter part of that year, TCU announced

their intention to open the 'Lead On Campaign' designed to raise an additional $1 billion dollars to

be added to the 2019 endowment. On October 24, 2019, 'TCU 360' reported that the 'Lead On Campaign'

had already raised $600 million of its $1 billion dollar goal. So, does anyone have the slightest clue as

to the current amount of the university's endowment?

I've always understood that to "raise"it doesn't mean you've got in in the bank. I bet that $600 million "raised" includes a lot of pledged money.
 

CryptoMiner

Active Member
Truth be told, TCU has been averaging close to this amount in net income every year for the past 5+, so they will be just fine I think at the end of the day.

Quick glance on the 990s available:

5-31-2018 $145,038,230
5-31-2017 $124,068,447
5-31-2016 $67,178,264
5-31-2015 $151,887,966
5-31-2014 $154,497,432
5-31-2013 $96,841,133

Fund balance (not endowment related) has grown from $1,642,967,777 to $2,377,737,294 over that period.
 
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