Brown and Other Elite Colleges Are Facing Financial Problems

Brown and Other Elite Colleges Are Facing Financial Problems

Brown University executives have notified the campus that cuts are coming.

The provost's office wrote on its website that Brown has a $46 million budget hole this fiscal year.

“Without changes to the way Brown operates, the structural deficit is expected to continue to deepen significantly,” according to a December 17 campus message from Francis J. Doyle III, the provost, and Sarah Latham, executive vice president for finance and administration.

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Though the current hole is only 3% of the school’s operating budget, “increases in the deficit over time are not sustainable," they say. 

Brown expects the deficit to grow to $90 million in the following year.

 

Donations in Focus

One of the problems has been numerous major donors - especially Jewish donors —  have stopped giving due to the University’s position on the Israeli and Gaza war.

Brown is limiting faculty growth to 1% and has capped the campus staff — no additional growth.

The Wall Street Journal is reporting that two policies by incoming President Donald Trump may hit the elite schools financially.

“Two Trump administration policies could further weigh on Ivies’ finances. One is a 1.4% tax on income levied as part of the 2017 Tax Cuts and Jobs Act on endowments larger than $500,000 per student at schools with more than 500 students. A few dozen schools have had to pay it and there is talk of increasing the levy,” reported the Wall St. Journal.

“Far costlier would be rhetoric or visa rules that make it harder or less attractive for foreign students to attend U.S. universities. Foreign students, on average, receive much less assistance and, therefore, indirectly subsidize aid to domestic students. Their enrollment took a hit during Trump’s first term,” added the WSJ.

 

Mega-Salaries at the Top

And, while staffing freezes and cutbacks are planned, salaries of the top executives at Brown continue to be in the million range or more.

As GoLocal unveiled in September, Brown University’s top seven administrators all made more than $1 million in a year, and five more were paid more than $800,000, GoLocal unveiled in September.

The data come from the university’s IRS 990 form for 2023.

The average compensation package for the top seven at the not-for-profit Ivy League institution is more than $1.4 million a year.

The highest-paid administrator was Jane Dietze, the Vice President and Chief Investment Officer, who received a total of $2,882,923.

Dietze topped Brown President Christina Paxson, who received $1,831,198.

This number does not include Paxson’s free housing at the university-owned mansion on Power Street, which is worth $4 million.

The third highest-paid Brown administrator was Joshua Kennedy, Deputy Chief Investment Officer, who received a compensation package of $1,285,053.

Peter Levine of the investment office scored nearly $1.1 million, for a total package of $1,099,714.

 

Pay for Performance?

And Brown’s Athletic Director, Grace Calhoun, is paid $1,064,933.

Brown’s sports program has been less than high-performing.

In 2023-2024, on the men’s side, the top programs — football, soccer, basketball, hockey, lacrosse, and baseball combined  — were the worst in the Ivy League. None of the teams had an overall winning record last year.

Women’s soccer has been stellar, but nearly all other major women’s sports — soccer, field hockey, basketball, hockey, lacrosse and softball — finished in the middle of the conference or worse.

Calhoun's $1 million plus package was more than $400,000 more than Providence College's Robert Driscoll's comp and nearly $700,000 higher than the AD at URI, Thorr Bjorn.