Finances

Operating Budget

2005–06		$973,591,000
2006–07 (projected)		$1,020,474,000

The total operating budget for 2005–06 includes funding for sponsored research at the Princeton Plasma Physics Laboratory (PPPL), which totals $72 million. PPPL operates on a federal fiscal year that ends September 30, 2006.

Income and Expenditures, 2005–06

Income (in thousands)	%		Amount
Investment income	37%		$355,814
Sponsored research	21%		214,203
Student fees	22%		213,370
Gifts	11%		107,782
Auxiliary activities and service income	9%		82,422
Expenditures (in thousands)	%		Amount
Academic departments	37%		$361,703
Physical facilities	21%		207,224
Student aid	14%		136,510
Administration services	11%		101,299
Library and computing services	8%		76,660
PPPL	7%		72,000
Athletics	2%		18,195

The Endowment

Princeton’s endowment is the fifth largest in the country, with a value of more than $12.7 billion as of March 31, 2006 (Harvard University, Yale University, Stanford University, and the University of Texas have larger endowments). The endowment is invested in a diversified group of assets, including domestic and international stocks and bonds, independent return managers, private equity, venture capital, real estate, and other assets not traded on organized trading markets.

Princeton’s portfolio has historically experienced solid returns. The total return on Princeton’s endowment—defined as “dividends and interest on portfolio holdings, plus or minus capital appreciation or depreciation”—was equivalent to almost 15 percent per year over the 25-year period ending June 30, 2006.

Giving to Princeton

Gifts from undergraduate and graduate alumni, parents, and friends are vital to sustaining Princeton’s historic mission and keeping the University at the forefront of higher education. The generosity of Princetonians of all ages and from every part of the world supports excellence in teaching, innovation in research, and advancement of the University’s long traditions of service.

In recent years, Princeton has greatly expanded its programs of education and scholarship; enhanced the academic, residential, cultural, and athletic facilities of its landmark campus; and restructured its financial aid program to ensure that every student who is admitted to Princeton can attend, regardless of his or her economic circumstances. The undergraduate classes now on campus are among the first to benefit from sweeping new financial aid policies—including the replacement of all student loans with scholarships and grants—designed to make the University accessible to students of all backgrounds.

Many of the University’s current fund-raising priorities center on the need for new construction and programming to support a planned increase in the undergraduate population by some 500 students. In addition, there are significant new initiatives to advance Princeton’s engineering programs, extend the international reach of academic offerings, enhance the creative and performing arts on campus, and create an institute of neuroscience. New funding is essential to undergird Princeton’s groundbreaking financial aid program; endow professorships and freshman seminars; secure advanced library and computing resources; and support multidisciplinary academic programs in areas such as international studies, integrative genomics, environmental sciences, and law and public affairs. Major building projects include a new residential college; dormitory construction and renovation; new and renovated facilities for the humanities, the sciences, and engineering; and the University’s first unified science library.

Annual Giving. Critically important to Princeton’s continuing vitality, Annual Giving provides unrestricted funds that can be used to meet the University’s most important and pressing needs, including financial aid, faculty support, and library and computing resources. This yearly campaign provides approximately 10 percent of Princeton’s overall budget for education and general expenses.

In its 66-year history, Annual Giving has raised more than $700 million for Princeton. The 2005–06 Annual Giving drive produced $40.4 million in unrestricted funds, a record amount, with 58.2 percent of all undergraduate alumni participating. Annual Giving owes its success to an extraordinary volunteer effort that reaches out to Princetonians and friends from all over the world through class events, personal meetings, phone calls, the mail, and e-mail.

Endowment and Capital Giving. Expanding the University’s leadership in higher education requires significant gifts in support of specific projects, from professorships and scholarships to buildings and renovations. Princeton seeks designated gifts and bequests from undergraduate and graduate alumni, parents, and other friends of the University. Endowment funding is essential to support continuing needs such as professorships, library acquisitions, new and expanded academic initiatives, and undergraduate scholarships. Current capital priorities include major residential life and campus improvement projects. In addition, the University seeks funds for academic programs and research from corporations and foundations.