In accordance with the University Council Bylaws, the March 22 Council meeting included “extended reports by the President, the Provost and other administrators covering budgets and plans for the next academic year.” 
The remarks on these pages were adapted from the presentations given.
There was also a progress report on advancing faculty diversity and inclusion at Penn; see the recently published Action Plan for Faculty Diversity and Excellence (Almanac March 21, 2017).

Coverage of March 22 University Council Meeting

Report on the Budget

Bonnie Gibson, Vice President for Budget and Management Analysis

I will be reviewing the FY17 current year budget. The FY18 budget is still under development, and will be presented to the Trustees for approval in June. I will discuss our undergraduate total charges for FY18.

For FY17 we have budgeted $3.47 billion dollars in revenue (Below left). This chart shows the multiple components of revenue, but the easy way to think about our revenue sources is in thirds. The first slightly over-weighted third is tuition and fees. It represents over $1.25 billion or 36% of our operating revenue. This category includes undergraduate, graduate and professional and other tuition. The second slightly underweighted third is sponsored programs, or research, representing $928 million or 27%, of our revenue. The final third is everything else. It represents $1.3 billion or 37% including the income from our endowment, gifts, other income—which is mostly sales and services, transfers and support for the Vet School from the Commonwealth of Pennsylvania. So as you think of our revenue sources, remember thirds.

Our expenditures also total $3.47 billion (Below right). Fifty-three percent of that total is compensation, including salaries and benefits, totaling $1.8 billion. Current expense makes up 24% of our expenditures, with capital and student aid representing the final 22%. (Those of you who can add quickly in your heads will note that this totals 99%, due to rounding).

School spending represents almost $2.4 billion, or 68%, of our total expenditures, and our three largest schools make up 74% of that total. The next largest component, administrative centers, including Finance, HR, Public Safety, Information Systems and other administrative units, is $436 million or 13% of the total. The cost of our space is $177 million. But 75% of the space costs are actually for school space, so if we move those costs to the school segment, school expenditures would increase to 72% of the total.

Our total aid budget for FY17 is $471 million. That was a 4% increase over FY16. Graduate and professional aid, including stipends, is $256 million, while undergraduate aid is $215 million. These numbers represent direct financial aid to individual students, but in fact the cost of a Penn education is subsidized for all students.

Our audited financial statements show that tuition and fees cover 70% of the cost of a Penn education, with gifts and endowment income covering the balance.

For FY18 the Trustees have approved a 3.9% increase to undergraduate total charges, with tuition, fees, room and board at $68,600 next year. Room and board are based on the average standard room, and the freshman meal plan. Over the past 10 years Penn’s increase in total charges has been at the average for our peer group: it has never been the highest, and it has never been the lowest.

This is the ninth consecutive year that we have held the rate of increase below 4%. Only once in the last 38 years has the rate of increase been lower than it has been for the past nine.

This increase in total charges generates net incremental revenue of $14.9 million after the application of $9 million to the financial aid pool, with $9.7 million of that in net tuition revenue. Net tuition after aid grows by 2.9%.

The undergraduate aid budget is projected to increase to $224 million for FY18, and that is up 4% compared to FY17.

Since 2008 the financial aid budget has increased 122%, with an an average annual growth rate of 8.3% per year, which is more than twice the growth rate of total charges. Since 2004, when Dr. Gutmann became President, it has grown by 184%.

Now I’ll review our undergraduate financial aid program. We are keeping a Penn education affordable and accessible. The average aided freshman actually pays $2,224 less in constant 2007 dollars than that individual would have paid in FY07. This is 11% lower than it was in FY07, again in constant dollars.

Regarding the income distribution for the aided class that entered in the fall of 2016, 47% of our aided students come from families with incomes of under $100,000. It is also important to note that 30% of aided students come from families with incomes of over $150,000. So we are aiding the neediest of our students but we are also aiding students with families with middle incomes.

Reagarding the distribution of traditional undergraduate grants by size for both the freshman class and the overall aided population, 75% of our aided students received grants of $35,000 or more, 48% received grants of $50,000 or more, and 24% received grants of $60,000 or more. 46% of traditional undergraduate students actually receive aid, and the average freshman grant this year  is $45,368.

The percentage of total charges that are covered by our aid program looks at the median grant and the median grant as a percent of total charges. Not only has the median grant increased significantly over the past eight years, but as a percent of total charges it has grown from 67% and 69% to 74% and 76.5% respectively. This means that our aid is actually growing more than our total charges, covering a larger percentage of the costs.

I’m going to move on now to PhD & graduate & professional students.

In 2016, the last completed fiscal year, we had over 3,000 PhD students from nine different schools. Almost all of our PhD students are fully funded for four to five years. Full funding includes tuition, fees, health insurance and a stipend. Beginning in FY18 fees will include access to Penn’s fitness facilities. For an SAS Humanities PhD student entering in the fall of 2017, the standard five-year funding package is worth over $350,930 in constant FY18 dollars.

PhD tuition and the research master’s tuition will increase at the same rate as undergraduate tuition. Professional tuition is set by the schools based on their specific needs and markets. The distribution of PhD students and expense by school and category, shows Arts & Sciences has the largest number of PhD students and the largest expenditures: over $73 million in FY16.

This concludes my presentation. I would be happy to answer any questions.

For more info see: http://www.budget.upenn.edu/Operating_Budget/

Reports on Transforming the Arts at Penn

Anita Allen, Vice Provost for Faculty and Chair, Provost’s Arts Advisory Council

Our President and Provost have elevated the arts at Penn. Through the arts, we explore our cultures and histories, and confront the conflicts and struggles that characterize contemporary life. The arts train creativity, experimentation, perception and self-expression. They often celebrate the best of the human spirit. The arts are a crucial component of a liberal arts education.

Dr. Gutmann’s Compact 2020 includes the arts as a vehicle of innovation. The Provost has created an Interdisciplinary Arts Fund and a standing Provost’s Arts Advisory Council, established in 2015 following a successful three-year Arts Initiative. The Sachs Arts Innovation Program announced in 2016 will further advance the arts at Penn.

Penn invests more than $60 million annually in its libraries and another $14 million in subvention to its arts centers.  More than $80,000 was allocated in FY17 for Interdisciplinary Arts grants for Penn Faculty with projects that engage students.  The recent gift to the arts by alumni and noted art collectors and philanthropists Keith L. and Kathy Sachs will create the Sachs Arts Innovation Program, transforming the arts at Penn by providing additional grant support for student, faculty and arts center projects. The pillars of the grant program are: reimagining pedagogy, resourcing faculty artists and arts scholars, engaging new audiences for the arts, and creating the Sachs Arts Innovation Hub. To be located within the Annenberg Center, with its own executive director, the Sachs Arts Innovation Hub is the brand new way Penn will centrally communicate, coordinate, and catalyze arts innovation.

The arts are alive and thriving at Penn. Every genre is represented—the visual arts, music, theatre, dance, spoken word and literature, with many forms of each. There are more than 80 student performing arts groups and campus arts centers including the Annenberg Center for the Performing Arts, the Morris Arboretum, the Arthur Ross Gallery, WPXN, the Penn Museum, the Institute of Contemporary Arts and Kelly Writer’s House. New leadership from Executive and Artistic Director Chris Gruits heralds a revived program for Annenberg Live. Nearly every day, important arts events enhance our campus, such as the March 22 inaugural Susan Marx Lecture by Dr. Johnnetta Cole, director of the National Museum of African Art. The exhibitions on view at the ICA and the Arthur Ross Gallery today represent truly interdisciplinary curatorial work that bears visiting.

The Monument Lab, curated by Professor and Chair of Fine Arts Ken Lum and collaborators, is a splendid example of arts leadership at Penn and the kinds of projects the Sachs Arts Innovation Hub will seek to support. The Monument Lab involves the construction of temporary monuments around the city of Philadelphia by an international roster of artists that includes Penn Professors Sharon Hayes and David Hartt. The project will explore the theme of why certain people and events are memorialized and others are not.  Endorsed by Philadelphia Mayor Jim Kenney at a recent launch and significantly supported by the William Penn Foundation, the Monument Lab will employ and involve about two dozen Penn students who will help in the fabrication and interpretative work of this unique undertaking.

Ken Lum, Chair & Professor of Fine Arts, School of Design

Thank you, Dr. Gutmann, Dr. Price and Dr. Allen. Thank you for the opportunity to present to you a project I’ve been working on now for over three years. Just to put that in perspective, I only arrived at Penn four years ago. It came out of being here a year, falling in love with Philadelphia, but being interested in the troubles I saw in the city, because I’m in the design field. I noticed near where I lived in South Philly at the time, a plaque to the great Billie Holiday.  I wondered where the statue for Billie Holiday was, and found out there’s no statue to her. In fact, soon there will be the first full-figure statue to an African American on the grounds of Philadelphia City Hall, to Octavius Catto—the first.

I don’t see this project as a kind of redress project, but I was interested in those kinds of questions. That same afternoon, after noticing the plaque about Billie Holiday, I walked to the City Hall and noticed a full-figure statue of John Wanamaker, and I wondered who he was. I found out he was a distinguished business person associated with a department store located where the Macy’s building is. Nothing against Mr. Wanamaker, but I thought, wow, you get a statue but Billie Holiday does not get a statue? So that led to my questioning the criteria. What are the stratifications relating to  why some people get remembered more officially than others and why other ones less so? So I came up with this question and I met some people in urban studies, especially Elaine Simon. Dr. Simon said I should meet Dr. Paul Farber, a Penn graduate who was asking the same questions.  So Paul and I have gotten together and worked very hard. We have tried not so much to answer this question but to lay this question out: why do certain people get monumentalized and others do not? We tried to think about it in terms of a city-wide public art project. City-wide public art projects are fairly common in the form of biennials. They recur over and over in many cities.

What distinguishes Monument Lab is that it retains a very important socially interactive as well as intellectually investigative component. Across 10 sites throughout the city, starting with the five squares, the courtyard, City Hall, representing the no longer existing Center Square, and five other sections of the city that represent Northeast, Southeast, West Philly and Southwest, we will be having major artists from around the world—most of them, if not all, having some historical affiliation or biographical affiliation with Philadelphia—ask the question of what is an appropriate monument for the current city of Philadelphia?

In addition to the public art component, which they will realize, there will be what we call a Monument Lab component. It’s basically a glorified container that’s being converted into a kind of office in which events will take place. We will have seating around this container, and we will have speakers that deal with problems that are city-wide or national, even. Particular questions relating to the particular precincts that that lab will represent geographically. There was a first iteration of Monument Lab, opened two years ago in the courtyard at City Hall, which we began with the work of the late Terry Atkins, who was a distinguished professor here in the PennDesign department of fine arts. His work was called a prototype monument for Center Square. It’s actually based on Joseph Lancaster’s hand drawn configuration for a model school room for poor children in the 19th century. The first iteration was extremely successful. Because of that success, the William Penn Foundation contacted us to come give a presentation. We were going to contact them, but they preempted us by contacting us and saying, “Hey, we’re really interested in this and possibly funding something if you have an idea for a city-wide one,” and we said, “Well, it just so happens we do.”

So my slides preview what will be taking place in the fall 2017. Some of these artists, like Tyree Guyton, have no affiliation with Philadelphia, but he’s a very distinguished, important figure in Detroit. He’s the progenitor of the Heisenberg Project. He basically transformed an entire decimated area of Detroit, where his mother actually still lives, and kind of turned it into a major art enterprise and has revived the entire area as a result. Now it is one of the most important tourist sites in Detroit. Most of the other artists—like Hans Haacke, who is a very distinguished German American artist—emigrated to the United States and moved to Philadelphia. All the artists generally have some relationship to the city. We are curating it with a focus on demanding that the artists deal with this question from the perspective of equity, difference and politics.

It will be the biggest outdoor art exhibition in the history of Philadelphia, with a budget at almost $2.25 million. That is the Monument Lab.

At each of these labs, we will be engaging with the local communities and asking them the same question: What is an appropriate monument for the current city of Philadelphia? And they fill out their drawings or even textual description of their proposed monument. All that data will be input into a large computer map, resulting in a book of the data but also including major essays by leading scholars on the state of Philadelphia today. I will also be contributing an essay.

Here are some of the proposals from the earlier Monument Lab, a prototypical one. My favorite was a monument of Robert Indiana: Not Love But Like.

At every lab there will be at least one to two students from Penn who will be associated with the lab. We are starting to hire them now, so there are summer employment opportunities for 22-23 Penn students of every level. Graduate MFA students and other architectural students will be helping with install, at the labs themselves; the input of data interpretations will involve students from pretty much all the schools.