November 15, 2011

Where Do Universities Spend their Money?

The other day I asked Where Do Universities Get their Money From?   Today lets take a look at the other side and see where universities spend their money.

I once again got the data from he Delta Project  in their study on Trends in College Spending 1999 - 2009   The figures I used are all out of that study and represent average spending per full time equivalent student.   I am only looking at public research universities and private research universities.    The spending for smaller schools and community colleges is different.   I am also not looking at the costs for scholarships or for auxillary spending category.   If you want more data you can find it in the appendix of the Delta Project study.

The different spending categories are defined as :

Instruction: Activities directly related to instruction, including faculty salaries and benefits, office supplies, administration of academic departments, and the proportion of faculty salaries going to departmental research and public service.
Research: Sponsored or organized research, including research centers and project research. These costs are typically budgeted separately from other institutional spending, through special revenues restricted to these purposes.
Public service: Activities established to provide noninstructional services to external groups. These costs are also budgeted separately and include conferences, reference bureaus, cooperative extension services, and public broadcasting.
Student services: Noninstructional, student related activities such as admissions, registrar services, career counseling, financial aid administration, student organizations, and intramural athletics. Costs of recruitment, for instance, are typically embedded within student services.
Academic support: Activities that support instruction, research, and public service, including libraries, academic computing, museums, central academic administration (dean’s offices), and central personnel for curriculum and course development.
Institutional support: General administrative services, executive management, legal and fiscal operations, public relations, and central operations for physical operation.
Plant operation and maintenance: Service and maintenance of the physical plant, grounds and buildings maintenance, utilities, property insurance, and similar items.

First lets look at the public research universities.  

Spending totals per major category for 1999, 2004, 2008 and 2009 are as shown below:

Looking at just 2009 the spending as a percent of total for each category is:

Now lets look at the private research universities.

Spending for each year in the major categories:

Spending per category as a percent of total for 2009 :

Spending is higher almost across the board in private universities.   Private schools spend roughly double what public schools do per student.   The one notable exception is that public schools spend a lot more on public services.  Here is the side by side comparison of total dollar spending per student in 2009 with a column on the far right showing how much more the private schools spend versus public:

Public Private % more 
Research  $     5,799  $     11,262 94%
Student Services  $     1,365  $      3,390 148%
Public Services  $     1,975  $      1,305 -34%
Academic support  $     2,845  $      5,742 102%
Institutional support  $     2,495  $      7,038 182%
Operations and Maintenance  $     2,073  $      4,270 106%
Instruction  $     9,986  $     20,232 103%

While private universities spend a lot more money the amounts spent in each category are quite similar between the private and public schools.  

Public Private
Research 21.9% 21.2%
Student Services 5.1% 6.4%
Public Services 7.4% 2.5%
Academic support 10.7% 10.8%
Institutional support 9.4% 13.2%
Operations and Maintenance 7.8% 8.0%
Instruction 37.6% 38.0%

The rate of increase from 1999 to 2009 in each spending category wasn't very fast.   Figured as annual rate of growth, the annual percent increase per category is as follows:

Public Private
Research 0.9% 2.2%
Student Services 2.0% 2.6%
Public Services 1.8% 3.1%
Academic support 1.1% 0.0%
Institutional support 1.1% 2.7%
Operations and Maintenance 1.4% 2.8%
Instruction 1.8% 4.0%

This rate of growth is pretty close to inflationary increases over all.


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