Financial Highlights from Angela Blanton, Vice President for Finance and Chief Financial Officer
It is my honor to present Carnegie Mellon University’s Annual Financial Report for the fiscal year ended June 30, 2022 (FY22).
Our world is changing every day. Even before the pandemic caused numerous shifts in how we work and live, digital transformation was accelerating across industries and public life. Carnegie Mellon stands at the forefront of this change, as the birthplace of innovations that reshape society. This is a responsibility and opportunity that we take very seriously. The financial strength and sustainability of Carnegie Mellon is about so much more than dollars and cents — it is about creating and nurturing an environment where big ideas flourish. It is about ensuring that the university can fulfill its mission and pursue its vision of a better, more equitable future.
For big, world-altering ideas to take flight, it is imperative for the university to have the financial stability and foresight to prepare for various challenges, weather the unexpected and take action with confidence. Through difficulties such as pandemic disruptions and recent impacts from inflation, the university has stayed strong and nimble. Far from slowing down, Carnegie Mellon is thriving.
This year, a truly exceptional level of enrollment put the university in a very strong position. We also continue to monitor market fluctuations and elevate scenario planning to make data-informed decisions and strategic investments that further the university’s mission. We continue to prioritize engagement with our finance partners and stakeholders across Carnegie Mellon, fostering an ecosystem of creativity and shared knowledge that will elevate our work.
Below, stories of impact from FY22 highlight how our community continued to build a better world with relentless momentum.
Where “Possible” is Redefined
Carnegie Mellon continues to be a place where innovation meets humanity. Our faculty and students don’t merely imagine new technologies and concepts — they build them, test them and put them to work.
This year, a team of Carnegie Mellon design students worked with Bollinger Motors — the CEO of which is a CMU alum — to design a mobile water filtration system that can provide relief within the first 48 hours during a water crisis. It is an idea that could save lives in places that experience short- or long-term disruptions to their clean water supply.
In partnership with Emerald Cloud Lab, CMU is building the first-of-its-kind university cloud lab as part of a decade-long Future of Science Initiative that will accelerate the university's leadership in scientific discovery. Other components of this initiative include a new $210 million science futures building, made possible by a $75 million lead gift from the Richard King Mellon Foundation, and increased support for student scholarships and fellowships, professorships, and research funding. The CMU Cloud Lab is a game-changing automated laboratory that will use artificial intelligence (AI) to transform the way academic science research is done and dramatically speed the pace of discovery. The potential positive impacts to society are limitless.
Speaking of discovery without limits, Carnegie Mellon has always been known for its ability to make exciting discoveries where disciplines intersect and collide. True to that tradition, we officially opened the JPMorgan Chase & Co. AI Maker Space on campus, which provides a place where students from diverse disciplines and backgrounds can work together, using ingenuity and creativity to push the boundaries of AI in how we live, work and play.
As we stay relentlessly focused on improving the world of the future, we do not lose sight of the impact we can have on our region and community in the here and now. A report released by CMU this year illustrated the revolutionary impact of Carnegie Mellon’s National Robotics Engineering Center (NREC) over the last 25 years. In addition to forging the tech industry in Pittsburgh and Western Pennsylvania, NREC has transformed the robotics industry worldwide. Beginning with an initial investment of less than $10 million, NREC has raised more than 50 times that amount in total direct funding to date.
We consistently invest in the creation of new spaces, facilities and initiatives that encourage the brightest minds to ask questions, defy barriers and redefine what’s possible.
Where Big Ideas Are Launched
Carnegie Mellon continues to be a platform for big ideas to take flight.
President Biden visited our Mill 19 advanced manufacturing facility to meet with faculty and students, and delivered a major speech calling for new investments in American innovation. The decision to give his speech at Mill 19 underlined the importance of CMU’s investments in advanced manufacturing, 3D printing, AI and robotics, and our leadership role.
Mill 19 was also the site of a meeting of the U.S.-European Union Trade and Technology Council to discuss topics like supply chain resilience, workforce development, and information security — all areas where Carnegie Mellon leads the way.
The National Science Foundation announced 11 new National Artificial Intelligence Research Institutes this year, four of which involve CMU researchers. With those Institutes — each of which will receive $20 million in funding over five years — Carnegie Mellon will be advancing research and deployment of AI and robotics in caregiving, wireless networks, and agriculture.
The university also received a $20 million gift to establish the Hoskinson Center for Formal Mathematics. The center, housed in the Dietrich College of Humanities and Social Sciences, will promote mathematical research by enhancing collaboration and experimentation. The tools that will be developed here will unleash new possibilities in mathematics, as well as any discipline that applies mathematics.
These are just a few stories that emphasize the fact that CMU is a place that world leaders and innovators recognize as a launchpad for BIG ideas that will change society for the better.
Where the Future Shines Bright
Carnegie Mellon continues to be a place for next-generation talent to sharpen their vision and develop as leaders.
In cooperation with the Government of Rwanda, CMU and the Mastercard Foundation announced a historic partnership that will propel Carnegie Mellon University Africa to new heights. The Mastercard Foundation’s $275.7 million commitment will significantly expand advanced engineering and technology education at the Kigali location, establishing the Center for the Inclusive Digital Transformation of Africa and setting up a $175 million endowment for CMU-Africa. The perpetual funding afforded from that endowment gift will allow CMU-Africa to continue educating talented innovators to lead digital transformation across the African continent for many years to come.
School of Drama alumna Siân Heder won the Academy Award for Best Adapted Screenplay for "CODA," which also took home the Oscar for Best Picture. "CODA" is a groundbreaking film that won a number of major awards, and Heder’s Oscar is now the 13th Academy Award won by our CMU community.
Carnegie Mellon’s cultural impact also extends into politics and social change. Student organizations like Women in Politics at CMU; the Office of Student Leadership, Involvement, and Civic Engagement (SLICE); CMU Votes; Feminists Engaged in Multicultural Matters and Education (F.E.M.M.E.); and countless others have activated student leaders to improve student life, mobilize young voters, and prepare themselves for lives of service.
Investments and gifts have also unlocked new potential for student scholarship, personal growth, health and well-being. Our friends at the Posner Foundation made a $16 million gift to fund the Tartan Scholars program and University Libraries deanship, as well as support the construction of the Highmark Center for Health, Wellness and Athletics. The university broke ground on the new Highmark Center in FY22, a $105 million investment to completely revolutionize student health and well-being, enhancing the campus experience and bringing a holistic approach to student needs.
Of course, the reason we’re all here is to support the university’s mission — and there’s no better reflection of that mission than Commencement Weekend. Seeing young leaders don their caps and gowns and walk at graduation is always a powerful experience, but last spring’s 124th Commencement was truly historic. Degrees were conferred to the Class of 2022, and we welcomed undergraduates and graduates from the Classes of 2020 and 2021 as well. It was a weekend like no other as participants joined us here in Pittsburgh, as well as via livestream from around the globe.
Indeed, the future shines bright at Carnegie Mellon, and each year we send new rising stars out into the world to make their mark.
Financial Results
I now present you with an overview of our financial results, which highlight the university's performance for the fiscal year ended June 30, 2022.
Overall Results
The university’s operating revenues exceeded its operating expenses, yielding an operating gain of $126.8 million. Total university assets increased $210.3 million or 3.2% since the fiscal year ended June 30, 2021 to an ending value of $6.5 billion on June 30, 2022. The operating surplus and growth in donor restricted gifts drove the asset growth.
Investments
Carnegie Mellon’s investment portfolio represented 61.6 % of total assets and was valued at $4.0 billion on June 30, 2022. This portfolio increased by $123.6 million or 3.2% from June 30, 2021 and includes endowment assets totaling $3.0 billion. The university’s net investment return (loss) for FY22 was -3.1% due to market conditions.
Operating Revenues and Expenses
Operating revenues for Fiscal Year 2022 (FY22) were $1.47 billion, an increase of $191.1 million, or nearly 15%, from Fiscal Year 2021 (FY21). Through June 30, 2022, operating expenses totaled $1.35 billion, a 9.5% or $116.6 million increase from FY21.
Fiscal Year 2022 Operating Revenues
The increase in operating revenues was driven primarily by exceptional enrollment. Tuition and other educational fees, net of financial aid, increased $95.2 million or 16.7% to $663.9 million compared to FY21. The increase in net tuition and fees is primarily due to a large number of pandemic-related deferrals from the prior year, especially among international students.
The College of Engineering experienced strong growth of $7.5 million (8.0%) — continuing its trend of steady increases in recent years — due to increased research activity from key sponsors in the Mechanical Engineering department, as well as the Electrical and Computer Engineering department. The School of Computer Science also posted $6.2 million (4.4%) in year-over-year sponsored revenue growth, driven in large part by research activity in the Robotics Institute.
Auxiliary revenue increased 227.2%, from $20.7 million to $67.7 million, due to resumed on-campus activities and housing occupancy rates near pre-pandemic levels. During FY22, housing occupancy exceeded 92% capacity.
Fiscal Year 2022 Operating Expenses
Personnel costs, consisting of salaries, wages, and employee benefits, remain the university’s single largest category of expense at $918.2 million or 68.2% in FY22, representing an increase of $41.3 million or 4.7% from the prior fiscal year. These costs grew due to increased administrative and academic salaries following the easing of a pandemic-related hiring freeze, resumed merit increases, and growth in student salaries with the return to on-campus activities. Total expenses were up $116.6 million or 9.5% primarily due to resumed on-campus operations. The main drivers of increased expense include costs such as travel and meals, instructional supplies, dining service contracts, maintenance and utilities, and professional services.
Looking Ahead
These days, the energy on campus is invigorating. It is a reminder of the enduring vibrance and strength of our university. While Carnegie Mellon never stopped innovating, it is heartening that both our revenues and expenses increased for largely the same reason: a vigorous return to the on-campus experience.
As society weathers economic, social, cultural, geopolitical and technological disruptions, our university community's creativity, leadership and innovative spirit will play a critical role in solving the world’s most pressing problems and building a brighter future for all of humanity. Carnegie Mellon’s mission — and our relentlessness in supporting it — has never been more essential.
Sincerely,
Angela Blanton
Vice President for Finance and Chief Financial Officer
November 10, 2022