Chancellor Carol Christ announced Monday in a campuswide email that UC Berkeley reached a balanced budget, ending the $150 million deficit and also raised $1.2 billion in revenue from “two consecutive, record-breaking years of fundraising.”
According to Vice Chancellor of Finance Rosemarie Rae, UC Berkeley began confronting the budget deficit about five years ago. So far, the most significant budget cut was the reduction of administrative staff by 500. Rae said her team was also able to revamp their current financial, student information, and contract and grant systems to better suit a new budget.
According to campus spokesperson Dan Mogulof, salary benefits make up the highest amount of expenses at about $1.7 billion. With a three percent increase in compensation for employees each year because of inflation, an extra $50 million is needed for the budget each year.
Alternative revenue streams have brought positive growth for the budget deficit.
“Really where we made our most remarkable improvements was in the growth of alternative revenues,” Rae said. “Alternative revenues for us means things like growing our student summer session programs and growing our concurrent enrollment. For instance, filling empty seats in a class where nonmatriculating students can earn executive education credit — that’s been a big game-changer for us.”
Over the last year, UC Berkeley witnessed an increase in first-time alumni donors and first-time donations from undergraduate students’ parents, according to José Rodríguez, editorial director of university development and alumni relations. Campus fundraisers are focusing on past successes to assess future fundraising efforts.
The number of gifts received and donor attendance exceeded UC Berkeley’s goal for Big Give, which aims to optimize participation from around the world rather than only focus on the revenue earned. Rodríguez said they will start to focus on this strategy for future fundraising campaigns.
In maintaining a balanced budget, Rae said it takes “an investment in a financial system that allows for full transparency of budget and operating costs” along with “a culture of accountability and transparency.”
Before achieving a balanced budget, ASUC Executive Vice President Andy Theocharous said the previous financial model was “not entirely rosy.”
“Now that we have a balanced budget, I would challenge the Chancellor to see how she develops a new model,” Theocharous said.
With this influx of fundraising, there is speculation about whether the university plans to create fundraising events to specifically address the current student housing crisis.
Currently, no fundraising events have been conducted to target student housing, however, funds have been allocated to address the issue, according to Rodríguez. Efforts are being made to improve the campus’ academic counseling and student community, according to the campuswide email.
“A balanced budget allows the campus to think more proactively on how it can better the classes and services it offers (to) it(s) students,” ASUC External Affairs Vice President and UC Student Association President Varsha Sarveshwar said in an email. “I look forward to being a part of that dialogue in the coming months.”
Christ also said in her email that she expects future tuition increases — as determined by the UC Board of Regents — will continue to be an incoming source of revenue for the university. Rae’s financial team is working closely alongside the UC Board of Regents, however, to formulate a cohort tuition model.
This “hypothetical” model would allow entering freshmen to pay the same tuition throughout their four years at Berkeley, according to Mogulof.
“We need a way to model the effects that that’s going to have on our financial health throughout the course of three or four years. We’re doing a lot of scenario modeling now that we weren’t doing five years ago,” Rae said. “Forecasting into the future has become very regimented and sophisticated for us.”
Contact Maxine Mouly and Olivia Buccieri at [email protected].
A previous version of this article may have implied that there have been no funds raised for student housing. In fact, there have been no fundraising events specifically targeting student housing, but funds have been raised for student housing.
A previous version of this article may have implied that Chancellor Carol Christ has the power to increase tuition. In fact, the UC Board of Regents determines tuition, not the campus.
The headline of this article incorrectly attributed fundraising to singlehandedly eliminating the campus budget. In fact, there were many tactics deployed to balance the campus budget.