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2022 Financial Update

Dear members of the Northwestern community,

Each January, we offer an update on the University’s finances, as well as information on our commitments and priorities for the future.

Despite a worldwide pandemic that continues to impact individuals, society and the global economy, Northwestern begins 2022 in a stable financial position. We believe this will allow us to address the unpredictable challenges of the pandemic while making crucial investments in our people and infrastructure.

The University’s expenditures for Fiscal Year 2021 totaled roughly $2.47 billion, against revenues of $2.56 billion. A surplus of $87.8 million, representing a small operating margin, was the result of several factors, including: the shared sacrifice of many faculty and staff in adapting to financial constraints; a pandemic-driven reduction in non-personnel expenditures (such as travel, supplies and events); a pause in capital projects that were mainly in early planning stages; and a successful stabilization of revenues. All this helped to offset pandemic-related revenue declines and new expenses that were required to ensure the safety of our community.

We believe that by maintaining an appropriate degree of prudence within an environment that remains uncertain, we can leverage our financial position to place the University again on a path to growth. The one-time bonus payments to nearly all employees last August represented a first step in that process. As noted previously, one of our highest priorities is to provide a merit compensation pool for next fiscal year that is robust enough to reward and retain our dedicated faculty and staff and to attract new talent to our campuses.

We acknowledge that the pandemic has fundamentally impacted the way we work, and we will examine the implications for salary grades, worksites and related issues. As an example, we plan to return to a one-year waiting period for new employees to receive a retirement match rather than the current two-year timeframe and will share further details soon about this change. We also look forward to welcoming Lorraine Goffe, our new vice president for human resources and chief human resource officer, on Feb. 1. She will be a key leader in our ongoing efforts to best position our faculty and staff for success.

We are resuming planning and activity on a number of capital projects essential to Northwestern’s future. These projects, which had been paused for nearly two years, include a full renovation of the Jacobs Center in support of the social sciences; additional buildout of Mudd Hall for the sciences; the establishment of a new start-up accelerator in Evanston; and further work on the Tarry Building on the Chicago campus. We also are beginning the planning and design for the redevelopment of Ryan Field.

Our work has been galvanized by one of the most successful fundraising campaigns in the history of American higher education — the recently concluded "We Will" Campaign, which raised $6.1 billion from more than 174,000 individual donors.

The success of the campaign will allow us to continue to recruit scholars of global eminence; pursue new opportunities for further growth in research; build sustainability into our entire enterprise; advance diversity, equity and inclusion; support the overall student experience, with a particular emphasis on well-being; maximize the in-person experiences that make a Northwestern education distinctive; preserve our commitment to meeting the full financial need of a student body in which Pell Grant recipients now comprise more than 20% of first-year classes; and enhance our information technology infrastructure.

In another sign of the University’s fiscal strength, our endowment recorded a gain of 37% during the past fiscal year, reaching $14.9 billion. Given that the value fluctuates, we should not take on additional expenses based solely on one year’s outsized returns. However, as the endowment grows over time, the payout amount also will grow to benefit future generations at least as much as this one. These funds remain the essential fiscal foundation upon which we can build enduring academic excellence, with much of it directed toward funding scholarships, research and other programs in perpetuity. 

Given the University’s fiscal strength, this truly world-class community is positioned to reach new levels of excellence in teaching, research, artistic creation and public service. Even as we enter a moment of transition, preparing to welcome Northwestern’s 17th president in September, we can continue to turn our academic ambitions into reality. We are grateful to all of you — students, staff and faculty — for your tireless work and your dedication to Northwestern’s mission.