Participatory Budgeting + transparency

Lesson 1: Barnard’s growth over the last decade–Plans vs. Reality

On March 26 at 6pm, accounting guru Howard Bunsis will detail Barnard’s growth over the last decade. To help you get ready, today we want to focus on a key decision: the College’s choice to grow student enrollment by over 25% in the last decade! 

This was a deliberate pre-COVID plan made by College management to advance:

1. Financial Strength–Through economies of scale, growing enrollment more than expenses was supposed to produce budget surpluses.

2. Accessibility of a Barnard Education– Budget surpluses from economies of scale were supposed to enhance our ability to discount tuition and offer more financial aid, making Barnard more accessible economically.

How did the college’s plan to grow student enrollment work out?

In short, expense growth has outstripped revenue growth–the opposite of the goal of capturing economies of scale. So, the plan did not work as promised. And this has seriously affected our finances!

In tomorrow’s lesson, we’ll dig into the details of how this happened! 

Lesson 2: The Reality of Student Enrollment Growth: Veering from Our Values

The sine qua non of the College’s plan to advance both financial strength and accessibility by growing enrollment was that revenue growth would outpace expense growth. In reality, though, since 2018, while the College’s revenues have grown by 61%, its expenses have grown by 66%.  

Part of the failure of this plan is due to how the College went about growing revenues. The College did not raise more money from donations–in fact, private gifts fell by 19%. Instead, revenue grew mainly because the College charged more students more money to attend Barnard.  

• Contrary to our values, we now have the most expensive “term bill” (tuition, fees, room and board) of any school in the country. This happened because Barnard raised our prices at a rate not only higher than inflation but also higher than our peers.

• At the same time, we slashed the “discount rate” from 32.6% in 2016 to 24.5% today. In other words, our students now on average pay 75.5% of our current, higher list price, rather than 67.4% of the former, lower list price. For comparison, our peers offer discount rates around 50%, meaning that our list price is higher than than our peers AND our discount rate is half theirs. 

• Barnard shifted our student body toward full-fee students and away from both middle-income students who need discounts and low-income students who need financial aid.

Credit raters have actually praised Barnard’s stinginess in financial aid and cited it as a reason for not downgrading our relatively poor bond rating further! But we have probably reached the limit of our ability to prop up revenues by raising the cost of attendance and reducing discounts and financial aid–in fact, President Rosenbury suggested as much at a faculty meeting in Spring 2026.

What about the 66% growth in expenses that outstripped the 61% growth in revenues? Recent cuts to support staff, salary and benefits, and food and travel might have you thinking that these spending areas were the culprits driving cost growth, but the growth in expenses in fact comes from a surprising set of sources. 

More on that tomorrow in Lesson 3. 

Lesson 3: The reality of growth in expenses: Debt and management bloat; Not faculty hiring, employee benefits, or Finance office

Recall from Lessons 1 and 2 that the College’s plan when increasing enrollment was to increase revenues by more than expenses.  Instead, revenues grew by less than expenses (61% vs. 66%).  Let’s unpack the growth in Barnard’s expenses since 2018. 

• Cost of debt service up 231%

  • The amount of money we spent on interest payments in 2025 was more than three times what we paid in 2018. 

  • If the College had pursued strategies to maintain stable debt service costs, it would have saved $5 million in interest payments in 2025 alone.   

  • The 231% increase is calculated on data from before the College issued an additional $90 million of debt in June 2025, which will dramatically increase the costs of our debt service. Stay tuned for more on Barnard’s projected debt in Lesson 5.

• Disproportionate growth in number of managers and their salaries  

  • While the College increased student enrollment by 27% since 2017, it increased the number of employees in management positions by almost twice that, 49%! 

  • Total spending on management salaries has increased by 80% since 2017, disproportionately driving the 66% growth in total expenses.

  • The proportion of salaries that go to management is now higher at Barnard than at all but one of our peers!

What were not the culprits driving growth in Barnard’s expenses?

• A less secure faculty that’s getting paid less

  • Since 2017, tenure-line faculty grew by 24%, less than student enrollment.

  • But non-tenure-line faculty, who are paid less and have less employment security, grew by 60%. 

    • Among its peers, Barnard now has the smallest percentage of its faculty who are tenured, the highest percentage who are non-tenure-line, and the highest percentage of part-time faculty.

  • Average faculty salaries have only increased 23.4% since 2017; that’s less than inflation (28.2%)!

• A smaller share of the budget going to employee benefits

  • Is Management spending too much on benefits, as implied by their justification for ongoing cuts? In fact, they now spend 5% less of the budget on benefits than in 2018!

  • More faculty and staff were hired as enrollment grew. So benefit expenses grew, of course. But only by 57% – less than growth in overall expenses (66%). And less than revenue growth (61%)! 

• The ever-shrinking finance department

  • It is the job of finance employees to model the likely growth of future revenue and expenses to ensure the College makes ends meet. Did this essential group grow with the rest of the college? No…in fact, employees in finance shrank by 22% since 2017. No wonder we’re having trouble making things add up!

Contrary to what recent cuts – to finance, support staff, employee benefits, food and travel – imply about expense growth, it is management salaries and debt service that have grown most out of proportion to other expenses. This is the reality. 

There are other heretofore obscured financial realities that the college needs to face – The real costs of its building spree, associated long-term debt, and the small and neglected endowment. We will cover these issues in the coming lessons. 

Lesson 4: The Reality of Barnard’s Building Spree: What These Spaces Really Cost Us 

Barnard has been on a building spree for the last 20 years, as have many colleges. Unlike our peers, however, Barnard has borrowed an amount equal to almost half its current endowment ($273.6 million) to help pay for its space (see Lesson 6 on the endowment). This massive borrowing results from the College’s repeated failure to adequately fundraise to fill in the gaps left by initial gifts for namesake buildings from a handful of long-term trustees and benefactors–and management’s repeated decisions to forge ahead with building anyway.  

Here is a brief recap of recent buildings and their (continuing) costs:

• The Diana Center (2010) replaced the Millicent McIntosh Student Center and cost $57 million to construct. The college issued $81 million in bonds in part to help pay for Diana. 

• The Milstein Center (2018) replaced the Lehman Library, a project that cost $152 million. The Milsteins ($25 million), Tows ($25 million), and Vageloses ($20 million) provided less than half the total cost of the Milstein Center (i.e., $70 million). The college issued a $109 million bond for which much of the purpose was to help cover the rest of the cost of building Milstein.  

• The LeFrak Wellness Center (2024) cost $36 million to build. Public tax reports show that the LeFrak Foundation has given only a small fraction of these costs, and management has reported that fundraising efforts to fully cover the Center’s costs are ongoing. 

• The Roy and Diana Vagelos Science Center (RDSC) cost $250 million to build. The Vagelos’s $55 million naming gift was supplemented by about $56 million in additional donations. The college issued bonds of $83.1 million (2022) and $155.5 million (2025) for which much of the purpose was to help pay the rest of the cost of building RDSC. 

According to the VP for Advancement’s presentation at a Spring 2026 faculty meeting: 

• To complete the RDSC, the College used $116 million of its recent bond issue. Thus, once again, less than half the ($250 million) cost of a building came from initial gifts and fundraising.

• The College is currently focusing its fundraising efforts on closing the $23 million gap in RDSC financing, along with the gap remaining for LeFrak. (And, thus, not focusing on fundraising for our mission.)

Do you see a pattern in Barnard’s financial planning and fundraising for building? We start – and actually complete – projects before adequate funds are raised. 

What are the real costs we face as a result?  

• Expensive (and seemingly unplanned) borrowing to finish building projects (see Lesson 5 on debt). This contributes to the tightening of our annual budget, as we pay more and more in annual debt service (see Lesson 7 on this vicious cycle).

• Deviation from our mission. The more we pay to service our sizable debt, the less management claims we can afford to spend annually in direct support of our values (e.g., financial aid outlays to make Barnard affordable and accessible, employee benefits to care for our community; see Lessons 6-7). 

• At a Spring 2026 faculty meeting, the VP for Advancement stated the obvious – prioritizing fundraising for recent building shortfalls interferes with other fundraising aims. 

  • A concrete example of this tradeoff? This year there is no Gala–a signature Barnard event that traditionally raises money for our mission, especially financial aid. The Gala was canceled because Barnard doesn’t have the capacity to hold both a (fundraising!) grand opening to finish paying for the RDSC and a gala to fund our mission. Many alumni, families, and other donors are disappointed.

• Worse credit ratings and higher future interest rates. The rating agencies have emphasized that the debt accumulated by Barnard’s building spree is doing serious harm to our financial health, and this has consequences for the interest rates at which we can borrow in the future (see Lesson 5 on our credit ratings).

As we will discuss in the next two lessons, Barnard’s much greater indebtedness relative to our peers, and much smaller endowment, further compound the true costs of building on borrowed money.  Stay tuned!

Lesson 5: The Real Costs of Barnard’s Debt

At a Fall 2025 faculty meeting, Barnard’s CFO discussed the College’s Endowment-to-Debt ratio, an important metric of financial health. With an endowment of $557 million and debt of $313 million in 2025, Barnard’s ratio of 1.8 was described by our CFO as “concerning.” 

In fact, as you can see below, Barnard is dead last in a comparison to our peers on this key measure of financial health. Because our endowment is so low, and our debt is so high, Barnard’s Endowment-to-Debt ratio is half that of even its low-endowment peers. In tomorrow’s lesson, we will examine our endowment. For today, let’s turn to our debt.  

As explored in Lesson 4, the College has resorted to aggressive borrowing to fund its recent namesake building projects, with adverse consequences for our credit ratings and outlook. The table below shows the accumulation of our building-fueled debt and its link to our falling credit rating. As our debt goes up, our credit ratings go down–as you might expect. 

The 2020 Moody’s downgrade of Barnard’s bond rating from A1 with a stable outlook to A2 with a negative outlook was explicitly driven by Barnard’s “significant increase in debt.” The 2024 S&P downgrade of Barnard’s outlook from stable to negative cited “Barnard's ongoing full-accrual operating deficits, which have largely been driven by rapidly rising expenses” and “the issuance of additional debt and the undertaking of numerous capital projects.” Moody’s 2025 downgrade of Barnard’s outlook from stable to negative pointed to "forthcoming increases in already high leverage, which will significantly diminish affordability." The credit rating agencies have not been cryptic in their messaging–as Bunsis will share, it is in fact “unusual” for these agencies to be so explicit and pointed in their comments–yet the College has issued millions more in debt since these warnings.  

In Lessons 3 and 4, we laid out some of the costs of the College’s use of debt. Let’s add to that list:

1. As ratings agencies have downgraded our bond ratings and financial outlook, the interest rate on our borrowing increases. If we owed our 2025 bonds payable at A1 instead of A3 interest rates, we would save close to $1 million annually!1  

2. The consequences of the College’s most recent borrowing of $90 million in June 2025, will be fully felt by the Barnard community once full interest payments come due. 

As shown in the College’s 2025 Audited Financial Statement, annual interest payments on our long-term debt, which had a one-year reprieve in 2026 relative to other recent years, are scheduled to triple from 2026 to nearly $15 million in each year from 2027 to 2029, and then to rise again starting in 2030: 

By way of comparison, management's decision to lay off 77 people in the summer of 2025 was expected to save $5 million in salaries (as reported by the President) and $1.5 million in benefits (as reported by JFAB) - that’s less than half of $15 million! 

3. The college is now so indebted that it probably can’t borrow more–for example, for needed maintenance of our existing space or to strategically advance its mission in coming years–without risking a further credit downgrade that would bring us uncomfortably close to “speculative grade” (i.e. “junk bond”) status.  

How well has the college planned for the increased expense in our debt payments? For instance, how can our now-balanced budget–the one we have just achieved through painful layoffs and benefit reductions, along with that one-year reprieve in our interest payments–withstand the tripling of debt costs in 2027? Does management intend more layoffs? More cuts to benefits? To salaries? To financial aid?

The major reason that our peers can responsibly borrow and pay off as much, or more, debt than Barnard is that their much larger endowments do much more to offset annual expenses. Tomorrow, in lesson 6, we will discuss this – and other – reasons why our small and neglected endowment matters so much to our financial health and our financial planning.  

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1.Published credit spread data indicate that the difference between A1 and A3 ratings is approximately 30–40 basis points (NYU Stern credit spread tables). This aligns with municipal market pricing conventions, where two-notch differences within the A category typically translate to ~20–50 basis points in yield spread for long-term tax-exempt bonds. Using a the midpoint of 35 additional basis points for Barnard’s 2025 bond total generates the following Estimated Annual Interest Expense calculation:

Assuming a standard 30-year maturity for a higher education bond:

• A1 Rating (~4.40% yield):

o Annual Interest: $12,012,000

• A3 Rating (~4.75% yield):

o Annual Interest: $12,967,500

Annual Difference: $955,500 

Lesson 6: Why our Small & Neglected Endowment Matters

Barnard’s small endowment (see also Lesson 5: The Real Costs of Barnard’s Debt) generates little annual revenue – only enough to pay for about 8.5% of annual expenses. That is about ⅓ of what our worst off peers gain from their endowments (e.g, Wesleyan, Oberlin):

As a result of limited support from the endowment (shown in the Figure below as “Investment returns for operations”), Barnard is excessively dependent on annual revenue–the sum of “private gifts and grants”, room and board (aka “auxilliaries”), and especially “tuition and fees.” The figure below shows that the College’s dependence on “tuition and fees” continued to skyrocket under current management (see also Lesson 2: The Reality of Student Enrollment Growth). In contrast, “private gifts and grants” have fallen since 2024 (see also Lesson 4: The Reality of Barnard’s Building Spree). 

Barnard’s dependence on gifts and tuition tempts management to focus spending on donors’ and full-fee parents’ priorities (e.g., named physical spaces, pet programs, surveillance), rather than mission-driven priorities (e.g., increasing economic accessibility, unglamorous infrastructure).

In Lesson 7, we’ll discuss how fundraising to build our endowment (instead of for new construction) could have provided better funding for our mission. In today’s lesson, we ask: Is Barnard’s modest endowment invested wisely? Are we getting as much as we can out of what we have?

Many colleges and universities follow the fashion of investing their endowments in hedge funds and other actively managed investments that charge high annual fees (2% + plus a percentage of profits, often around 20%). These expensive investments rarely beat the market. Barnard has been better than many of our peers by recently reducing our investments in these actively managed funds from 90% to approximately 50%. But, still, Barnard investments rarely beat the market (as Howard Bunsis will detail for us on Thursday @ 6pm in 327 Mibank Hal). 

Others have done better with endowment growth by being brighter. And bolder. Embracing the ethos of “Less is More; Simple is Better”, the University of California has transitioned out of hedge funds altogether while also divesting from fossil fuels and tobacco. This approach has paid off handsomely for their $31+ billion endowment! 

If Barnard followed the University of California’s strategy, we would save approximately $4.7 million a year in fees alone.1 Barnard could well also achieve higher returns on our endowment by following UC’s shift to plain-vanilla investments. 

As we explained in previous lessons, Barnard could also really benefit from learning that “Less is More” in other ways as well. Unrealistic and unwise growth in expenses – combined with the minimal revenue generated by the meager endowment – has put the college in a vicious cycle of financial struggle.  

Tomorrow, in Lesson 7, we will explain the vicious cycle of Barnard’s “financial strategy” and how we can transform it into a virtuous cycle of financial health and mission-driven spending.

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1. This calculation is based on 2% annual management fees for the 50% of the endowment that is invested in these actively managed funds.  Such funds generally operate on the “2% and 20%” model, meaning 2% annual fee plus 20% of profits–so only focusing on the 2% is conservative. UC, which divested from hedge funds altogether in 2025 after reducing holdings beginning in 2017, pays a 0.05% management fee that is the industry’s lowest. This calculation takes 0.3% rather than .05% as a more typical fee for a passively managed fund: 

• Current fee of 2% on the 50% of our endowment that is actively managed:

  • $557 million*0.5*0.02 = $5.57 million 

• Potential fee of 0.3% on the same share of the endowment if it were passively managed:

  • $557 million*0.5*0.003 = $835,500

  • Savings=$5.57 million - $835,500 =  $4.73 million annually.

Lesson 7: Breaking the Vicious Circle of Austerity Logic

The College’s apparent financial strategy – outlined in previous lessons – has put our finances in a vicious circle, whereby: 

In the last few years, management has accelerated this vicious circle by increasing the expenses of debt payment and management bloat. This led management to steeply raise the price of attendance (outpacing our peers). And, to make sizable cuts to other operating expenses – laying off employees and reducing college contributions to employee benefits. In the vicious circle of management’s financial strategy, their imprudent spending on the expenses they prefer (like their salaries) are offset by cuts to other spending of less concern to them (like our benefits and department budgets). Thus, austerity imposed on us is how they balance their budget.

Because management has now reached the limit of its ability to raise the price of attendance (see Lesson 2), management is now focused on increasing cuts to operating expenses other than their favored ones.  In this vicious circle, cuts to operating expenses must continue to grow to offset the growth in debt and other expenses fueled by management’s misguided spending.

As explained by endowment managers Cambridge Associates, colleges that get themselves into this vicious circle of austerity cuts to offset unwise spending and borrowing struggle to break free of it. This is especially true of colleges that also have small endowments, low endowment-to-debt ratios, and poor fundraising to grow the endowment. As explained in prior lessons, Barnard now faces all three of these obstacles to breaking the vicious circle of cutting expenses to offset growing debt + structural deficits.

What can be done to break the vicious circle of Barnard’s financial strategy?

Cut Truly Wasteful Spending Now!

Barnard can take immediate steps to stop imposing austerity cuts by cutting the expenses that management should have never incurred in the first place.  For example: 

• Eliminate management bloat by restoring Barnard’s 2017 ratio of 3 managers per 100 students.  This would save at least $2.7 million annually.  

  • This is almost exactly the amount that management is demanding JFAB help them slash from employee benefits this fall!

• Move our endowment fully out of high-fee actively-managed funds and into low-cost passively-managed funds (see Lesson 6). This would save at least $4.7 million annually. And, likely generate better returns on our modest endowment (see Lesson 6).

Approach Fundraising and Debt Differently

We do not believe that our most generous alumnae knew that their gifts for buildings would make Barnard less affordable and less financially healthy. In the future, capital projects must always be based on prudent financial planning for their full long-term cost. And, fundraising for capital projects must cover the bulk of their cost. No more expensive debt for things we can’t really afford!

Finance and fundraising must always focus on our longer-term financial health. Consider what we would have gained by fundraising for our endowment instead of buildings:

• Barnard raised approximately $20 million a year for buildings over the past decade. If the College had instead fundraised just $10 million annually for the endowment 1 : 

  • This would have added $100 million to the endowment principal. 

  • With Barnard’s 7.6% annual portfolio return, we would have $142 million in additional endowment. 

  • The extra $142 million could have provided $7 million more annually to spend on our priorities. 

• Taking on only debt needed for maintenance and smart upgrades could have saved us $10 million annually2 of the $15 million in debt payments we’ll be making from 2027 on.  

In sum, fundraising for the endowment instead of buildings could have given us $17 million more per year to spend on our mission.3 And, we would be free of the vicious circle of continual cutting to address structural deficits that management’s financial strategy fuels.

Is there a better financial strategy that creates a virtuous circle of financial health?

We can’t depend solely on our most generous donors to save us. Indeed, all of us working together for Barnard is the only way to get us on the right track. That’s why our next and last lesson, #8, is “There’s a better way: Participatory Budgeting Now!” 

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1.This is a conservative estimate. This figure is half of the roughly $20 million per year that was raised for new buildings, which was still insufficient to pay for them.

2. This figure assumes that issuing debt only for maintenance and cost-effective upgrades would have grown the debt at the same rate as the College grew as a whole–so by 60% instead of 231%.

3. These estimates and projections are based on publicly available data and standard assumptions. If management thinks these numbers are incorrect or the assumptions unrealistic, they can always correct public misconceptions by sharing data with the community and by opening up the books–and the confidential forensic accounting report they commissioned–to the relevant faculty committees.

Lesson 8: There’s a better way: Participatory Budgeting Now! 

Today, we conclude our eight-day series by offering some concrete steps to turn “what-ifs” into “how-tos.” To move Barnard from the vicious circle described in Lesson 7 to a virtuous circle of sustainable finance and prioritizing our mission, the AAUP calls for Participatory Budgeting Now!  

Here are some examples to consider:

Elected representation on the Board of Trustees 

• Expand elected positions. Key constituencies directly affected by the Board’s decisions are conspicuously absent from the Board. Electing faculty, staff, and student members to the Board of Trustees will allow the Barnard community to together determine Barnard’s mission – and the means by which we pursue the mission – via the annual budget and prospective financial planning.

• Increase communication between faculty and board committees. Our current elected faculty committees and the Board’s committees are contending with intertwined issues with minimal, if any, communication with each other. Many of our peers follow the best practice of having faculty committees and their cognate Board committees meet jointly, and we should do the same (e.g. FGP with Governance & Nominations; COI with Academic Affairs, FBPC with Compensation, FFRC with Budget & Finance). 

• Create new elected faculty committees. Our mission will be better served with the creation of new elected faculty committees that collaborate with the remaining counterpart Board committees (Audits & Compliance; Buildings, Environment & Technology; Investments; and Strategic Communications). 

• Reform trustee selection. The Barnard community is currently locked out of the process of trustee selection. Moving to community determination of the standards for their recruitment and tenure will prioritize a Board with not only relevant expertise (in higher education and in nonprofit finance & management), but also with the values and fiduciary and ethical commitments that should define Barnard’s future.

Participatory financial stewardship 

• Create community-determined metrics of financial prudence.  Benchmarks for successful financial planning, fundraising, and alumni engagement will be reported publicly. That way, in the future, progress toward our goals–or, conversely, mission drift–will be visible to all. As a result, our community can quickly double down on what is working and course correct on what is not. 

• Reduce management bloat. By ratcheting back recent growth in the number of managers and their influence on the College’s priorities, Barnard can return to its 2017 ratio of 3 managers per 100 students. To facilitate participatory stewardship, some inflated Vice President roles, for example, can be converted into appointed faculty positions, similar to dean appointments. This can save money as well as improve transparency and communication between faculty and management. As a point of comparison, Williams College only has two VPs, whereas Barnard has nine.

• Publish comprehensive annual financial reports.  The college’s budget and finances, as well as its financial planning, should be made available to the community, and a forum for community discussion (e.g., a webinar) provided. This is already a best practice at many of our peers. It can improve transparency and trust, and showcases the improvements generated by the participatory processes listed here.

• Prohibit unchecked management spending. Large purchases and expensive initiatives (e.g. for Google Gemini licenses, new management systems like Workday, Millie the AI bot, turnstiles and security cameras) should not be undertaken without community oversight. This will improve accountability and avoid campus discord. The new elected faculty committees will facilitate this reform of current management practices.

Community-Driven Fundraising

• Redirect fundraising energies. The College must pursue our broad base of grassroots donors and re-engage with our global Barnard network. The College is currently ignoring alumnae emails about cutting us out of their wills while courting big windfalls from the few. But small donations–the kind our current big-fish strategy is neglecting–go toward annual financial aid and convert into unrestricted endowment funds. That means that they can always be used to fuel our mission, rather than being constrained by donors’ preferences. 

• Ensure community-wide opportunities for fundraising participation. Allowing our diverse campus community to help with outreach will aid the College in reconnecting with the parts of the alumnae and donor communities that are currently marginalized. This includes reinstating faculty-led events. It also means ending the current management practice of hand-picking a few favored faculty while circumventing participation by all others. 

• Remember: we can’t depend solely on our most generous donors to save us. All of us working together for Barnard is the only way to get us on the right track!

These lessons have been brought to you by the Finance and Budgeting subcommittee of Barnard AAUP, based mainly on a financial analysis by Prof. Bunsis.