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Wine bar on 2200 Penn opens doors
By Ella Mitchell, Contributing News Editor • June 14, 2024

Trustees invest in strategic initiatives with more than $1 billion budget

Nelson Carbonell, the chairman of the Board, said trustees meet several times throughout the year to discuss how officials could allocate the budget.

University President Thomas LeBlanc’s five strategic initiatives will receive financial backing next fiscal year, officials announced at a Board of Trustees meeting Friday.

Trustees approved a more than $1 billion operating budget for the third consecutive year to fund LeBlanc’s main priorities – including research and philanthropy – build cash reserves and recruit faculty and staff. The Board will also allocate $53 million for its capital budget – which funds construction projects – to invest in initial plans for a new residence hall, classroom upgrades and sustainability initiatives, officials said.

The University’s operating budget has steadily grown over at least the past six years, while the capital budget has fallen significantly from the roughly $400 million officials allocated to the pool between 2012 and 2014. Officials have said the shrinking capital budget is reflective of the completion of major construction projects, like the Science and Engineering Hall.

Nelson Carbonell, the chairman of the Board, said trustees meet several times throughout the year to discuss how officials could allocate the budget to best reflect the University’s priorities. He said administrators suggest the most important areas to fund at the beginning of the year, and both trustees and officials decide how the budget breakdown can advance both parties’ priorities.

“There are priorities that are always going to be there, but then sometimes there may be new programs or new facilities that we need or different things like that that get woven into the project,” he said.

LeBlanc first announced his five strategic initiatives in April, focusing on the student experience, research, alumni engagement, medical enterprise and institutional culture. In his first year in office, LeBlanc has overseen major updates to each of these areas – including restructuring the student affairs division, changing the reporting structure of the Office of the Vice President for Research to answer to the provost and embarking on multi-city alumni event tours.

Carbonell said the trustees revisit the budget in February to finalize priorities and budget for financial aid. This year’s budget includes a $315 million financial aid pool – an $18 million increase from last fiscal year.

Carbonell added that while the Board decides where funds will be allocated, the budget is a broad guideline for how the Univeristy should spend its money and doesn’t dictate line items within each priority.

“We really take all of that and put a project together that reflects those priorities and an understanding of what’s going to happen in terms of revenues and what we need to do in terms of financial aid, and that really constructs the budget,” he said.

Higher education experts said budgets reflect the priorities of the institutions, which can change from year to year, especially following major leadership changes. LeBlanc, who started his tenure last summer, has spent his first year highlighting staff and student morale and research projects, whereas his predecessors have focused more on improving GW’s academic stature and bolstering philanthropy efforts.

Gabriel Serna, an assistant professor of higher education at Virginia Polytechnic Institute and State University, said the decrease in the capital budget could come from a common practice called deferred maintenance, in which universities only embark on maintenance project they can most easily afford – which usually includes classroom upgrades. He said the practice allows universities to maximize their funds to directly impact educational endeavors.

Serna said funneling parts of the budget into the University’s cash reserves better prepares GW for financial emergencies and can make the University appear financially sound to outsiders.

“It’s a good way to still leverage what you’re doing, but having both of these, it looks attractive to credit agencies, and you’re having a surplus,” he said.

He added that investing the capital budget in sustainable buildings is becoming more common at universities not only because of environmental perks but because sustainable energy makes facilities cheaper to run.

“Sustainability has become kind of a buzzword in higher education and particularly to do with the strategic planning process, and I think it’s a good thing, but it shouldn’t divert from the main idea of what is the goal of the institution, what is the goal of higher education in general – and that is to educate students,” he said.

Annie Dobler and Allison Kwon contributed reporting.

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