Thursday, December 6, 2012

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daily herald THE BROWN

INSIDE

Post

post-

U. sees drop in net assets, endowment value By MATHIAS HELLER

pre-apocalyptic, potlucking, psychoacoustic

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Sound policies Meropol ’13: U. has fair, effective assault standards Page 8

Going up? Students take home prizes at elevator pitch contest TODAY

TOMORROW

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49 / 42

since 1891

THURSDAY, DECEMBER 6, 2012

SENIOR STAFF WRITER

The University’s net assets decreased to $3.16 billion at the end of fiscal year 2012, a decrease of about 2 percent from last year’s total of $3.23 billion, according to financial statements released last month. Implying that the tough national economic climate is continuing to have an effect on elite universities’ finances, the market value of the University’s endowment dipped to $2.48 billion as of fiscal year 2012, down from $2.53 billion in 2011, according to a report released by the University Resources Committee last month. The dip in the value of the University’s investments coincides with a fall in net contributions to the University that are linked to the end of former president Ruth Simmons’ Campaign for Academic Enrichment fundraising initiative. Net contributions are counted as amounts of money that have been pledged by donors but have not yet been paid out to the University, said Beppie Huidekoper,

executive vice president for finance and administration. Simmons’ capital campaign, which began in 2002 and ended in 2010, raised $1.6 billion, the largest-ever haul for a Brown fundraising campaign. There have been decreases in net contributions received by the University in the two years since the end of Simmons’ campaign, according to the University’s financial statements. This year, the University received about $159 million in net contributions, an 18 percent fall from its 2010 total and a dip from last year’s $161 million. Huidekoper said she was not surprised by the fall in net contributions over the last couple years. The University collected many of its donors’ most recent fundraising pledges at the tail end of Simmons’ capital campaign, accounting for the recent falloff in collections, she said. The overall decrease in net assets is also affected by the persistently struggling U.S. economy. The University’s total investments declined in value from $2.88 billion at the end of fiscal year 2011 to

University Net Assets Per Fiscal Year

3.5 3.0

Billion Dollars

vol. cxxii, no. 117

2.5 2.0 1.5 1.0 0.5 0.0

2006 2007 2008 2009 2010 2011 2012

Fiscal Year

KYLE MCNAMARA / HERALD

The University’s net assets fell by about 2 percent this year. A principal cause was the end of the Campaign for Academic Enrichment, administrators said. $2.79 billion at the end of fiscal year 2012. value of the University’s investments, she “It’s a very challenging capital market,” emphasized that Brown is not alone in Huidekoper said. “We certainly hope to dealing with a difficult economic climate. do better this year.” The University’s dip in endowment Though Huidekoper said she was value and net assets comes on the heels of concerned about the dip in the market a report / / Endowment page 2

Report positions U. to aid Providence recovery Surging int’l By SONA MKRTTCHIAN SENIOR STAFF WRITER

Six months after the University settled negotiations with Providence Mayor Angel Taveras — through an agreement that increased Brown’s voluntary contributions to the city in lieu of taxes, amid criticism from both students and city residents — the administration released a comprehensive report last month describing the University’s “economic impact” on the city and state’s struggling economy. The report outlines Brown’s involvement and influence in the greater Rhode Island community, highlighting data on University spending and hiring and introducing the prospect of future development within Providence. Knowledge economy Providence has taken clear steps

toward becoming a less industry-dependent economy, initiating the drive toward a “knowledge economy,” which would shift the capital city’s focus to technological development and innovation. The report focuses on the University’s position in a state with poor financial prospects and suggests that the University could further promote economic activity. The University initiated the economic review process in the spring of this year, enlisting the services of Appleseed Economic Development Consultants, the same firm that drafted similar reports for the University in 2005 and 2009. The information presented in the report is a reflection of data submitted by Brown and independent research conducted by Appleseed, said Hugh O’Neill, president of the / / Report page 4 firm.

Brown’s economic impact (FY 2011) $159 million

paid to Rhode Island vendors and contractors

$68 million

paid towards purchases of goods and services

$171.8 million

spent on research

705

full-time construction jobs created

$61.1 million spent by students

$15.2 million spent by visitors

$22.9 million

contributed and paid in taxes to the city and state

4,459

non-student employees on campus

An “economic impact” report released last month describes the University’s contribution to the local economy through consumption and hiring.

Landmark pension reform faces legal challenge By ADAM TOOBIN SENIOR STAFF WRITER

A lawsuit filed by several Rhode Island unions following state municipal pension reform last November goes before Superior Court Judge Sarah Taft-Carter tomorrow. The hearing provides TaftCarter an opportunity to rule on a state motion to dismiss the case, which, if upheld, would be a major step toward solidifying the pension reform as state law. But if the judge strikes down the state’s motion, as most analysts expect, litigation will continue until the parties have expended all their options, including a possible appeal to the State Supreme Court. The process may continue for several months or until the parties negotiate an acceptable alternative settlement. “It’s a nine-inning game,” said Scott Mackay, political analyst for Rhode Island Public Radio. “We’re in the second inning.”

Prospects for a negotiated settlement brightened Tuesday when Gov. Lincoln Chafee ’75 P’14 expressed willingness to return to the bargaining table with George Nee, president of the Rhode Island AFL-CIO and Robert Walsh, executive director of the National Education Association Rhode Island, a prominent teachers’ union, the Providence Journal reported. Walsh told the Journal he wanted “to leave it up to the judge to answer” the question of a settlement, while Nee said he supported negotiations with the state. Rhode Island General Treasurer Gina Raimondo, an architect of the pension reform and a possible contender for the governorship in 2014, criticized Chafee’s offer to negotiate with the unions. “It is not time for closeddoor meetings,” she wrote in a statement released yesterday. But Raimondo added that “if at some point the court asks the state to sit down to try and reach a

settlement, we will do so in good faith.” Chafee said Raimondo was displaying “a real venture capitalist attitude” — a criticism of her Wall Street background, the Journal reported. Speaker of the House Gordon Fox joined Raimondo in decrying the negotiations. “It is not appropriate for me to negotiate legislation that was passed by the General Assembly and signed by the governor,” he wrote in a statement released yesterday. “This law is critical to securing the state’s retirement system and placing Rhode Island on sound financial footing now and into the future.” “The matter is now in the hands of the judiciary, where it will be appropriately decided,” Fox wrote. Raimondo has also argued that the governor cannot engage the unions in negotiations without her, since state law excludes employees’ retirement systems from the collective bargaining process. Christine Hunsinger, Chafee’s press sec-

retary, said that while Raimondo was the “chief architect and cheerleader” for pension reform, the governor has the authority to submit a deal to the General Assembly for consideration. Like many states across the country over the past few decades, Rhode Island has neglected to fully fund its pension system, allowing a significant buildup of unfunded liability — the difference between the money the state has promised and the money it has on hand to fulfill its obligations. Before the pension reform legislation passed last year, reducing the unfunded liability by $3 billion, the state was behind by $7.3 billion. The smaller unfunded liability means the state pays about $200 million less in annual required contributions to the fund, according to the non-partisan Rhode Island Public Expenditure Council. The law achieves the cost reductions mostly by suspending the cost of living adjustments — / / Pensions page 2

enrollment increases revenue for R.I. schools By ALISON SILVER

SENIOR STAFF WRITER

Across the country, the number of international students has increased significantly in the last few years, contributing additional revenue to colleges and state economies, according to a November report by the National Association for Foreign Student Affairs. Rhode Island was no exception — in the 2011-12 academic year, international students and their families accounted for $191.2 million of the state’s economy, according to the report. Last year, the number of international students in the state rose to 5,054, marking an increase of 143 between 2010 and 2012, according to the Providence Business News. Since federal funding cuts have prompted public institutions to seek other sources of revenue, the rise in international students who pay outof-state tuition has sparked questions about whether these institutions’ international recruitment is financially driven. With decreasing public funding, “the revenue potential of international students takes on additional vigor,” according to the report. “International students for some institutions have become a means to broaden or diversify the institutions’ revenue,” said John Hudzik, who coauthored the NAFSA report and currently serves as vice president for global engagement and strategic projects at Michigan State University. But Hudzik said that for institutions that have historically admitted a large number of international students, increasing revenue is not the principal motivation, he added. / / Internationals page 4


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