Annual Financial Update for 2025
Dear members of the Northwestern community,
Northwestern has entered the new year with strong momentum behind the research, teaching and creative work of our community. As our eminence grows around the world, we continue to pursue sustained excellence on our campuses, grounding our strategic decisions in the University priorities.
As we provide our annual financial update to the University community, we recognize that 2025 holds unknowns that may impact our financial operations. We are working proactively to prepare for various potential impacts and, if events dictate, we will provide updates to the University community.
Opportunities and challenges
We are proud of Northwestern’s accomplishments and the exciting work that is underway to further enhance our institution’s ability to create and disseminate knowledge. While we are optimistic about the opportunities that lie ahead, we also must remain mindful of new and evolving financial pressures on Northwestern, our peer institutions and, indeed, all of higher education.
Among the most important ways we support our students is by addressing the rising cost of attendance through the price of tuition and the amount of financial aid we disperse. This commitment is a direct investment in a core component of Northwestern’s guiding principles and University priorities, and we are actively exploring ways to slow the rising cost of attendance and ensure Northwestern is accessible to the best and brightest students regardless of their financial means.
The constraints on tuition and the endowment payout, our two primary sources of unrestricted revenue, compel us to carefully examine how we allocate our resources for maximum impact. While we face these constraints on revenue growth, the University also continues to see expense pressures related to labor contracts, employee benefits, federal legislation, potential changes in federal policy, compliance, research administration, security and litigation. With these compounding pressures, we will ensure financial stability and our ability to continue to support strategic priorities by exploring opportunities for operational efficiencies, responsibly reviewing our expenditures and carefully examining how we allocate our resources.
As part of these efforts, the University is undertaking a review of our budget model and related processes to make us more nimble as we seize opportunities and respond to the shifting landscape of higher education. Goals of this initiative include greater financial transparency, better alignment of resource allocation with the University’s mission and priorities, and incentives for innovation and entrepreneurship.
Positive performance, assets and endowment
Northwestern ended Fiscal Year 2024 (FY 2024) with positive operating performance of $54.6 million, a 1.6% margin compared with our $3.3 billion in operating expenses. Positive operating performance is required to support investments in our capital priorities and infrastructure. Most of the FY 2024 positive performance is retained by schools and units for specific uses and future investments and is not available for general use.
Another key indicator of Northwestern’s financial health is its assets. FY 2024 net assets increased $690.5 million, to $15.6 billion, through philanthropy and growth of the endowment. It was the second-most-successful fundraising year in the University’s history, with support from generous donors providing funds essential to fulfilling our education and research mission.
Northwestern’s investments grew 4.5% and provided 23% of operating revenue, supporting our commitments to financial aid, faculty, academics and research initiatives across our campuses. A majority of the endowment is restricted for specific uses, and the endowment as a whole is a vitally important tool to ensure the future success and sustainability of the University.
Investing in our people and priorities
Northwestern allocated significant FY 2024 resources toward total compensation for faculty and staff through annual increases, faculty recruitment and retention pools, and incremental resources to support the rising costs of employee benefits. Additional funding provided increases for graduate student stipends and benefits. Meanwhile, the University continued its investments in financial aid for students, awarding scholarships and fellowships that exceeded $618.3 million. Twenty-two percent of the incoming Class of 2028 was Federal Pell-eligible. Reflecting the exceptional quality of Northwestern’s research, the University again achieved record-breaking sponsored research funding with $1.05 billion in awards, a 5% increase compared with the prior year.
Northwestern also advanced its priorities through capital investments, underwritten by generous philanthropy from alumni and friends of the University. Capital projects started during the fiscal year included the renovation of the Jacobs Center to create a hub for the social sciences and global studies and the redevelopment of student spaces and athletic facilities — including Cohen Lawn, the new Ryan Field and Northwestern Medicine Field at Martin Stadium. In addition, the Kellogg School of Management announced construction of a state-of-the-art, technology-enhanced facility for its Executive MBA and Executive Education programs, and Deering Library began a major renovation project.
Maximizing future opportunities
Through careful planning, Northwestern has positioned itself to make targeted investments in our institutional priorities that strengthen the academic community and support our faculty, staff and students.
As we begin 2025, we are enthusiastic about what we can accomplish together in service of Northwestern’s mission.