Letter from the President

Despite the extraordinary operational and financial challenges presented by the COVID-19 pandemic, Brown University closed Fiscal Year 2020 in continued strong financial health. Brown extended its impact and reach globally by further investing in key areas laid out in its strategic plan, Building on Distinction: A New Plan for Brown.

When the University moved to remote operations in March 2020, leadership took decisive action to protect the health and safety of our community. These early steps included ensuring that Brown students continued to have access to the high-quality education for which Brown is known, providing much-needed financial assistance to students and supporting the Providence community by providing meals to hard-hit families and housing to first responders. Since then, Brown has invested millions of dollars to make resumption of research and educational operations possible, including setting up a sophisticated COVID-19 testing program, training contact tracers, installing touchless devices and ensuring that the air quality of our buildings is safe. All of these actions, although essential, have resulted in meaningful increases in expenses that have carried over to the current fiscal year. At the same time, Brown has incurred significant losses in revenue due to providing partial room and board refunds and the need to cancel our residential summer programs.

Steps to protect the health of our community and ensure academic continuity were paired with decisive decisions to shore up the University’s finances. Brown leadership quickly imposed spending limits, instituted a hiring freeze, eliminated staff and faculty salary increases and accepted voluntary reductions in senior administrators’ salaries, all of which will offset tens of millions of dollars in expenses and lost revenues for FY21. With financial markets in freefall, the University made certain to ensure sufficient liquidity to sustain our mission of education and research. This resulted in the issuance of a new tranche of $300 million in debt in May, followed by another issuance of $400 million in September. These actions, and others, will ensure that Brown emerges from the pandemic in a strong position financially.

As challenging as this time has been, as of the fiscal year ended June 30, 2020, Brown’s net assets grew to $5.5 billion, an increase of $405 million over the prior year, and up 8% from the FY19 result. Total debt at the end of FY20 stood at just over $1 billion. The current portfolio of debt has an average maturity of 22.5 years and carries a 2.79% blended cost of capital, one of the lowest in higher education. Even with the new issuance of debt, Brown’s credit rating remained at AA+/Aa1 with S&P and Moody’s respectively, which is a testament to the ever-strengthening financial health of the University.  

The endowment continues to play a vital role in supporting the University’s operations. The Brown University endowment and other managed assets generated a remarkable $504 million in investment gains in FY20, equating to a 12.1% return, and bringing the endowment and other managed assets to an all-time high of $4.7 billion. Spending totaled 4.9% of the endowment’s value. In light of the significant financial impact of the pandemic, the University will temporarily increase its draw from the endowment in FY21. Fundraising has also been critically important to the University’s financial health, and last year Brown experienced a record year for contributions from its generous donors and alumni.

As we look toward the future with optimism, we have to acknowledge there is uncertainty ahead. With significant declines in University revenues and the increase in costs related to operating during the pandemic, Brown is expecting a substantial deficit in FY21 that will carry over into FY22. Even with the actions already taken, we anticipate a FY21 deficit ranging from $100 to $165 million, representing roughly 8% to 13% of the total operating budget. University leadership has developed a plan for FY21 that proportionately shares the deficit across the institution. With the use of newly acquired debt, philanthropy and temporarily increasing endowment distributions, as well as a host of other cost savings and revenue-generating measures, Brown will without a doubt weather this difficult period.

I invite you to explore the FY20 results that follow regarding the financial health of the University.

Michael White
Chief Financial Officer, Brown University

Review of 2020 Financial Statements

The following sections outline the Fiscal Year 2020 financial performance of Brown University. The University’s financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and audited by our independent outside auditors from the firm KPMG LLP. The GAAP financials have been summarized for presentation purposes in the charts and tables presented below.

GAAP financials summarized for presentation purposes.

Net Assets

The University ended Fiscal Year 2020 with net assets of $5.5 billion, an increase of $405 million (8%) despite recording a modest operating loss of $8.9 million. This marks the fourth straight year of substantial growth in net assets with the cumulative change totaling approximately $1.3 billion over that period. Endowment performance and gifts were the most substantial contributors. Net investment returns, after the endowment appropriation, totaled $322 million, while gifts were $236 million.

Operating Revenue

The University’s total operating revenues grew by 3.1% to $997.9 million in 2020, up from $967.6 million in 2019. The change in total revenue was driven by growth in net tuition and contributions, endowment appropriations and grants. However, there was a decline in auxiliary revenue related to COVID-19.

Gross tuition grew by 5.8% ($34 million) to $615.9 million in FY20, while University scholarships grew by 3.8% to $216.9 million. Scholarships grew at a slightly slower pace as a result of the allocation of scholarship to room and board revenue, an accounting requirement as a result of room and board refunds related to COVID-19. In aggregate, net tuition and fees grew by 7% year-over-year to $399 million.

Grants and contracts revenue from government and private sources increased $8.4 million to $209.3 million, a 4.2% increase over FY19. The percentage of revenue from federal funding sources, such as the National Institutes of Health, the National Science Foundation and the Department of Defense, decreased slightly by one percent to 88% in FY20. This decrease translated into a slight decline in the University’s effective indirect cost reimbursement rate from 34% in FY19 to 33% in FY20. Indirect cost reimbursement, which allows the University to recover certain overhead expenses related to grants, is a critical component of the operating budget as it broadly supports research at the University.

Operating revenue for current-use gifts increased by $8.2 million to $100.5 million in 2020. The strong increase in revenue is attributable to the generous cash and pledges received to support the President’s Response Fund, created as a result of the COVID-19 pandemic.

For 2020, the Corporation approved an endowment appropriation distribution reduction to 4.85% from 4.90% in 2019. This payout rate is applied to the average market value of Brown’s endowment over the most recent three-year period. This reduction was more than offset by investment gains and additional gifts, resulting in a $6.1 million increase in endowment returns appropriated in 2020 versus 2019. This appropriation of $159.9 million represents approximately 16.0% of the University’s Operating Revenue. 

Auxiliary revenue decreased significantly by 16.2%, to $86.0 million for 2020. Housing, dining and student health fees constitute just over 80% of these revenues. The decrease was driven primarily from room and board refunds to students due to the move to remote instruction in spring 2020 because of the pandemic. 

Operating Expenses

Total operating expenses for the University increased 1.4% to $1 billion in 2020, from $992.9 million in 2019. Salaries, wages and benefits expenses, which represent over 50% of the operating expenses of the University, grew by 3.9% to $537.2 million. Graduate student support, including scholarships and stipends, increased by 9.3% to $89.4 million. Non-compensation expenses declined by only 3.6% to $380.2 million as a result of a reduction in travel and discretionary expenses. 

Total salaries and wages increased by 4.8%. The growth in compensation expense was a result of modest increases in both additional faculty and staff positions as well as merit-based increases to compensation for existing employees. The University was able to reduce the cost of benefits per employee in 2020 as a result of a reduction in health insurance claims such that benefits expenses grew at a marginally low rate of 0.9%.

Depreciation grew 4.8% to $86.9 million as a result of approximately $120 million of new capital assets put into service in 2020. Despite the increase in the capital assets in service, utility expenses remained fairly consistent at approximately $35 million in 2020, due to favorable utility contracts.

Balance Sheet

Fiscal Year 2020 ended with increases to both assets and net assets when compared to Fiscal Year 2019.

Investments

During Fiscal Year 2020, Brown investments grew to $4.8 billion. The endowment and other managed assets generated a 12.1% return in FY20. Additional information on the endowment can be found elsewhere in this report, in the section prepared by the Brown University Investment Office.

Debt

Total bonds, loans and notes payable increased from $787.7 million in 2019 to nearly $1.1 billion in 2020. The $282 million increase was driven by the $300 million issuance of the Series 2020 taxable bonds offset by annual principal payments. The Series 2020 taxable bonds were issued at an effective interest rate of 2.59%, reducing the University’s average cost of debt to 2.73% for 2020. It also resulted in a 6.6% decrease in interest expense year-over-year. The University has maintained its current ratings of AA+ by S&P Global Ratings and Aa1 by Moody’s Investor Services. 

Capital Expenditures

Brown invested $152 million in capital projects, building and equipment in 2020, which is comparable to the $156 million spent in 2019. These investments have contributed to a number of significant projects, including completion of the new 22,500 square-foot Center for Lacrosse and Soccer, and continued construction efforts for the Performing Arts Center and the Wellness Center and Residence Hall. 

Summary

The financial strength of the University continued to flourish this year through the many contributions of our community. The key to Brown’s success lies within that community, and is tangibly represented through the generosity of our donors and the University’s exceptional leaders, faculty and staff, and within the world-class academic and research programs that bind us together. It is our responsibility to protect and steward these people and programs that positively impact innumerable lives around the globe every day. These financial statements are a measure of that commitment and the desire to preserve the long-term financial health of Brown.

Financial Statement Overview contributed by Brown University’s Finance Division

During the fiscal year from July 1, 2019, to June 30, 2020, Brown University's endowment and other managed assets generated $504 million in investment gains, equating to a 12.1% return. It was a year of economic, political and social upheaval — much arising out of the global COVID-19 pandemic — that resulted in substantial volatility in the prices of financial assets. The endowment’s portfolio, managed by a group of superlative external investment managers, is diversified across asset classes, geographies and industries in order to survive and even thrive in unforeseen circumstances. The circumstances of Fiscal Year 2020 certainly qualify. After accounting for investment gains and gifts of $100 million to the endowment, and after adjusting for spending and expenses, the endowment and other managed assets totaled $4.7 billion for FY2020. This total is an increase of 9.9% over the prior year and represents a high-water mark for the endowment.

Supporting the University

The endowment is a financial resource for the University, and a fundamental measure of success is what it can sustainably contribute financially on an annual basis. This year, the endowment provided $171 million to the overall annual operating budget. This contribution represents approximately $17,000 per student in a diverse array of programs, many of which are supported by their specific endowed funds. Scholarships and prizes, endowed professorships, lecture programs, library resources and athletics facilities all received support. The largest portion of these funds constitutes financial aid. 

The endowment contributes between 4.5% and 5.5% of its value to the University each year. The specific percentage is determined by the Corporation of Brown University, and the value is calculated on a 12-quarter trailing basis, which serves to shield the budget from the volatility of financial markets. For FY20, spending totaled 4.9% of the endowment’s value.

The initial contribution to the University’s endowment was made in 1769, and its value and annual contribution have grown steadily since then, thanks primarily to gifts from benefactors that sought to shape the character of Brown and ensure its long-term financial security. When crisis occurs, as it has so often since 1769, but rarely so emergently as during the pandemic that emerged in 2020, a question invariably accompanies it: Why not spend more from the endowment to support Brown through this time of need?

The primary answer to this question is that most of the endowed funds are restricted to specific purposes, so an increase in spending would not necessarily provide increased flexibility in meeting the financial needs that are most pressing for Brown today. Endowed gifts are accepted with a solemn — and legally binding — obligation to steward and spend the funds for the intended goal and over the intended duration. The fulfillment of the goal may vary (e.g., a named scholarship or an endowed faculty chair in a specific area of study), but the duration is always the same: perpetuity.

A secondary but vital answer to this question is that the endowment is not a financial resource solely for today’s stakeholders in Brown’s mission. It is also a resource for all of tomorrow’s stakeholders. Future students, faculty, staff and alumni will face future emergencies and opportunities and will rely on the endowment as a critical financial resource, just as we do today. To represent their interests is the meaning of stewardship.

The draw on the endowment will, in fact, increase in the coming year to help alleviate the University’s current financial challenges resulting from decreased revenues and increased expenses associated with operating during the global pandemic. The decision of how much to increase spending from the endowment, which is made by the Corporation of Brown University, must balance today’s clear needs with tomorrow’s potential needs and opportunities.

Performance

In order to maintain the positive impact of the endowment on future stakeholders, the investments of the endowment must, over a long period of time, grow at a rate that exceeds the rate of spending. This growth must be in real terms, meaning it must be in excess of the rate of inflation, in order to maintain the purchasing power of the endowment. The inflation rate, as measured by Commonfund’s Higher Education Price Index, totaled 2.2% for FY20, bringing the combined hurdle of spending plus inflation to 7.1%. The endowment’s investment performance in FY20, as well as in all trailing time periods, exceeds this hurdle. The implication is that the impact of the endowment on Brown’s educational mission is growing in importance over time. 

Having achieved the paramount objective of exceeding the rate of spending, the Investment Office applies other benchmarks to the performance of the portfolio. The aggregate benchmark is an internally maintained measure that combines the endowment’s asset allocation with the returns of market indexes. Outperformance by the endowment over the aggregate benchmark is effectively a way to test the extent to which Brown’s external investment managers have contributed additional value through active management. That favorable gap was substantial in FY20, and has been tremendous in recent years. The Investment Office estimates that the outperformance of the endowment over the aggregate benchmark over just the last five years amounts to approximately $882 million, nearly one-fifth of today’s total value.

The Aggregate Benchmark performance is preliminary as of October 8, 2020.

The endowment’s performance fares well against other relevant benchmarks. A traditional mix of 70% global stocks and 30% global bonds has underperformed Brown’s endowment in all trailing time periods, as has the most commonly used measure of global stock markets, the MSCI All-Country World Index. 

At the same time, a portfolio composed entirely of stocks would not be appropriate for the Brown endowment. Despite the fact that a long time horizon confers a competitive advantage in making investment decisions, the high historical return from stocks has come with accompanying volatility that is incompatible with the University’s need for a reasonably predictable stream of spending from the endowment. The endowment is invested in a portfolio that is diversified across asset classes and geographies in order to generate returns that are not only competitive, but sufficiently steady to avoid resulting in fluctuations in the University’s finances.

The Sharpe ratio is a measure of a return stream adjusted to reflect the accompanying volatility, a proxy for the risk of an investment portfolio. Investment consultancy Cambridge Associates maintains a database of the Sharpe ratios of college and university endowment portfolios. On a trailing 5-year basis, Brown’s Sharpe ratio now ranks first out of the 140 endowment portfolios that Cambridge monitors.  

The benchmarks for performance described adhere to a priority in terms of importance. Foremost is exceeding spending plus inflation, as that is imperative to the University. Second is exceeding the aggregate benchmark and other market measures, which addresses the question of whether the investment program is adding value over low-cost alternatives. Measurement against the results of peers should be considered a distant third, but a comparison is important nonetheless as an assessment of the stewardship of the endowment by the Investment Office with oversight from the Investment Committee. On this consideration the conclusion is also clearly positive: Brown’s investment returns now rank among the top 5% of college and university endowment results over trailing 1-, 3-, 5- and 10-year periods.

Asset Allocation

The Investment Office, with counsel from the Investment Committee, is primarily responsible for making two types of investment decisions. The first is asset allocation: the selection of a mix of productive and complementary assets in which to invest. The second is manager selection: partnering with active managers with specific expertise that can add value to the capital invested in a particular asset class. The vast majority of the endowment’s portfolio is managed by external investment managers.

In Brown’s portfolio construction, neither of these activities has priority over the other. Rather, assessments of the opportunities in asset classes interact with and inform the evaluation of investment managers that specialize in that asset class, and vice versa. An asset class that appears otherwise unattractive for investment may in fact be an ideal hunting ground for a manager that employs contrarian or innovative techniques. Likewise, an asset class that appears attractive but yields no managers that meet Brown’s qualifications for partnership may require a reassessment, or may be a candidate for investment through a low-cost alternative such as an index fund. Feedback from the interaction of asset allocation and manager selection encourages the investment staff to constantly examine its own assumptions.

Two features of Brown’s framework for asset allocation are critical to enabling this feedback loop. The first is that the investment team is composed of generalists who research investment opportunities across asset class categorizations. This enables the team to pursue attractive opportunities or exceptionally talented investment managers without asset class constraints that feel increasingly arbitrary in today’s environment. The second feature is the absence of a policy portfolio with target allocations by asset class. Brown’s Investment Committee sets intentionally wide ranges for asset allocation targets, empowering the investment team to focus on the fundamental merits of an investment opportunity and its context in the portfolio without excessive regard for what category it might fall into or what label might be applied. 

This framework for asset allocation is not superior to alternative frameworks. Outstanding results at other institutions have been achieved by utilizing asset class specialists and the risk-mitigating effects of rebalancing. The key to how effective Brown’s framework has been for the University is its integration from the Investment Committee through the chief investment officer to every member of the Investment Office.  

A critical product of the asset allocation process is a diversified portfolio. The endowment’s portfolio is not designed to take advantage of a particular set of future economic circumstances. Rather it is intended to fare well enough to meet the University’s long-term financial goals regardless of future economic conditions. For this to be the case, investments must complement one other in terms of correlation, with strong performers compensating for those that lag in a given circumstance.

For Fiscal Year 2020, the portfolio’s diversification functioned as intended, reducing overall risk. It was a difficult year for the public equity and real asset components of the portfolio, but the absolute return and private equity components generated outstanding results.

Public Equities: Brown’s public equity strategies produced a return of 2% for FY20. This trails slightly the MSCI ACWI, a benchmark of global stock markets, which generated a return of 2.1%. As has been the case frequently in recent years, U.S. markets outperformed global and emerging markets. Public equity strategies represent 14% of the endowment’s capital, a relatively low level compared to the endowment’s history.

Public equity is the asset class in which the case for utilizing low-cost index funds is the most compelling. Brown’s use of active managers is predicated on the existence of strategies that can add value, net of fees and expenses, in markets that are less than perfectly efficient. If there is not evidence that this is the case, the endowment will seek to achieve its exposure in the lowest-cost, most-liquid format.

The public equity markets, however, are diverse and complex. Indexes frequently do not capture all of the potential investment opportunities, particularly in more specialized arenas such as smaller capitalization stocks or international bourses. Capital invested in index funds, furthermore, may increasingly be contributing to distortions in pricing — though the evidence is not conclusive — which should expand the opportunity set for active managers. Brown’s active managers, for the most part, fared well. In both domestic and global developed markets managers exceeded their benchmarks in FY20, but trailed in emerging markets. 

Public equity will continue to be a cornerstone of Brown’s portfolio, and the investment team will continue to pursue partnerships with active managers that have demonstrated an ability to outperform. 

Absolute Return: Absolute return strategies, by contrast, cannot realistically be imitated by indexes. This is not because the returns generated by these strategies have been strong; indeed, industry-wide returns have been unremarkable. Rather it is because of the significant diversity of investment strategies that are grouped together in this asset class. Absolute return encompasses a broad array of investment pursuits with varying exposures to market forces and risk appetites.

Absolute return strategies comprise 33% of Brown’s portfolio. Approximately 1/3 of that exposure is employed in strategies that endeavor to take no market risk: so-called market-neutral strategies. A market-neutral approach is fundamentally a form of arbitrage. When executed properly, it employs relatively modest risk in order to achieve an outcome akin to a classic fixed-income portfolio: predictable returns with easy liquidity available for reinvestment in the event of a market decline.

The remainder of the absolute return asset class is predominantly in long/short equity strategies, which invest in public and — in some cases — private companies with collective risk exposures that result in modest correlations to the S&P 500. Brown’s long/short equity managers generated impressive performance, returning 24% during the year, net of all fees and expenses, more than tripling the 7.5% return from the S&P 500. Every single manager outperformed the index.

Overall, the absolute return asset class produced a return of 13%. This is the second consecutive year that this outstanding group of investment managers has exceeded the S&P 500’s return.  

The relative scale of public equity and absolute return in Brown’s portfolio is not a reflection of a preference for one at the expense of the other. The Investment Office seeks to generate high risk-adjusted returns by partnering with managers of exceptional skill that are focused on attractive, inefficient markets. Filters for high integrity and an alignment of incentives are also meticulously applied. The portfolio’s asset allocation is better understood as a product of this manager-focused search, rather than a roadmap for it. 

Private Equity: Private equity comprises 37% of the endowment portfolio. This category describes all of Brown’s partners that engage in the activity of buying or funding private companies. Here again, however, the asset class can disguise the diversity of activity taking place. Venture capital managers may provide capital to fledgling companies and continue to fund their growth for years as their scale and need for capital increases, while traditional buyout managers may buy mature companies in legacy industries in order to restructure them. Several more spheres of expertise exist between those extremes, in geographies all over the world. Brown partners with both venture and buyout managers as well as investors with more refined specialties who are often focused on a single industry. The criteria for partnership with the endowment — ability, integrity and the opportunity to create value — is the unifying thread.

Brown’s private equity portfolio produced a return of 25% for the fiscal year, led by its venture capital investments. This is a truly phenomenal performance that reflects two factors: first, the work and care of our managers, who are collectively executing their strategies at a superior level; and, second, that returns from private equity, and from venture capital in particular, tend to be cyclical. The venture capital industry enjoyed a strong year of initial public offerings of stock to markets eager to award high valuations. Although the returns may not be smooth, the groundwork required to generate those returns requires persistent effort over many years. For this reason, a long time horizon is imperative in private equity investing. Brown cannot realistically expect many years of returns to rival those of FY20, but Brown’s managers will be consistent in the exertion of energy that periodically culminates in an outstanding result.

The endowment also has investments in real estate, commodities and fixed income that in aggregate total 11% of the portfolio and on a combined basis delivered losses in FY20. The Investment Office has been investigating opportunities and potential partners in these asset classes, and the events of 2020 may result in new investment prospects. 

The endowment’s former investments in fossil fuel-based energy now round to zero. Beginning two years ago, the Investment Office undertook a review of the long-term opportunity set in fossil fuels. The conclusion of this review was that, as the world shifts to sustainable energy sources, the prospective returns from fossil fuel investments did not sufficiently compensate the endowment for the associated risks. The Investment Office began a liquidation of existing investments, which is now substantially complete, and subsequently has made no new investments in fossil fuels. 

The Great Acceleration

Good investing — good business in general — requires a focus on competitive advantage. Competitive advantage describes the basis upon which an entity can produce a consistently better result than its peers. Advantages are rare, valuable and often fleeting. Brown places competitive advantage at the center of its process in selecting investment managers. Brown is fortunate to have access to managers that possess an advantage, and the investment team works to deepen relationships with partners that deploy such an advantage skillfully, and work to extend its life.

The Brown endowment itself enjoys two such advantages, and Brown’s investment program is likewise optimized to maximize their impact. The first advantage is Brown itself: Talented and successful alumni and parents in diverse industries help Brown achieve its goals out of their love for the institution and a belief in its mission of education, scholarship and research. The investment team has benefitted from referrals, candid references and insight from the Brown network, and works to increase this engagement over time. In accounting terms, this is what would be called an “intangible asset,” and it is valuable.

The second advantage is the permanent nature of the endowment and the institution for which it serves as a financial resource. This permanence enables the endowment to make investment decisions with a horizon that extends beyond many other market participants. This advantage of duration has many manifestations, including the ability to make illiquid investments and accumulate out-of-favor assets without regard for near-term price appreciation.

The extraordinary events of 2020 have thrown a new light on the advantage of having a long investment horizon. The social and economic response to the COVID-19 health crisis stimulated demand and usage patterns for technology solutions, and the companies that are at the forefront of providing those solutions have seen their valuations soar in response, while legacy companies have lagged. The endowment’s exposure to this dynamic has proven to be a significant positive this year. While few anticipated the abominable impact of the public health crisis, Brown has steadily selected investment partners with a sufficiently long-term view in order to match and maximize Brown’s duration advantage. These managers disproportionately held shares of companies that were likely to be the leaders of tomorrow’s increasingly digitally-oriented world. This explains a component of the endowment’s strong performance and is directly attributable to Brown’s competitive advantage.

In Closing

In the 12 months that encompass Fiscal Year 2020, we witnessed significant social and economic turmoil. The pandemic has been profoundly inequitable in its impact, and long-standing inequities in our society have received renewed, overdue focus. In recent years the Investment Office and the Investment Committee have allocated significant time and energy to capturing and cataloguing data addressing the environmental, social and governance implications of the investment activities of our external managers. The events of 2020, however, have injected these projects with increased meaning and urgency, and our efforts have been redoubled.

The events of 2020 also serve to underscore the inherent unpredictability of future events. The endowment manages this uncertainty by creating a portfolio of investments that can endure a broad set of economic circumstances. Sufficient liquidity ensures both the ability to steadily provide resources to the University and the ability to adapt to a changing investment landscape. In this way, the endowment will continue to play its traditional role in supporting and shaping the character of Brown.

Endowment Report contributed by the Brown Investment Office

Report on Fundraising

Brown continued to build on the record-breaking fundraising success of the previous year during Fiscal Year 2020. Because of the strong ties it has built with alumni, parents and friends, and its unwavering emphasis on service to society through teaching, research and public outreach, the University was able to maintain an impressive level of philanthropy despite the economic downturn brought about by the global coronavirus pandemic. 

More than 32,000 donors committed a total of $321.2 million in new gifts and pledges, making this the third-most successful fundraising year in the University’s history. This total included $68 million in planned gifts and realized bequests from more than 144 donors, as well as multimillion-dollar support for undergraduate financial aid, brain science, environmental science, and international and public affairs. Non-alumni parents contributed more than $75 million in FY20, and international alumni, parents and friends donated a total of $38 million across a range of priorities. As a result, Brown surpassed the mark of $2.5 billion raised toward the ultimate goal of $3 billion for the BrownTogether comprehensive fundraising campaign.   

With the shift to full remote instruction and telecommuting three quarters of the way through the fiscal year because of COVID-19, Brown experienced significant financial losses resulting from partial refunds of room and board and the cancellation of residential summer programs. At the same time, the University incurred the new costs of COVID testing programs, infrastructure changes to support public health, increases in financial aid and other expenses related to support for employees and students. 

Members of the Brown community contributed a total of $22.3 million for coronavirus-related funds, including the President’s Response Fund and the Student Emergency Support Fund, administered by the College. Many students faced unexpected financial challenges in their lives away from campus with their families. To help alleviate these burdens, the University established the Student Emergency Support Fund as a special initiative within the Brown Annual Fund. 

This exceptional generosity helped offset the costs of mid-semester travel for students, technology requirements for remote learning, enhancement of digital course delivery, and other unexpected student and faculty needs.

The following sections provide a snapshot of Fiscal Year 2020’s progress in the BrownTogether campaign’s key areas of focus: Our People, Education and Research, Campus and Community, and the Brown Annual Fund.

Our People

Goal: $1.05 billion
Raised as of June 30, 2020: $670 million

FY20 Highlights

Brown community members committed more than $55 million to undergraduate financial aid this fiscal year, which represents an increase of more than $10 million compared with FY19. The University focused on raising endowment funding to make The Brown Promise a permanent part of its financial aid program. Brown launched the Promise initiative in FY18 to remove packaged loans from all University undergraduate financial aid awards. With $23.5 million raised for the Promise in FY20, the University was able to help more than 1,500 students reduce or avoid loan debt. The University also kicked off an effort to provide more financial aid to student veterans this year as part of a plan to double the number of U.S. military veterans enrolled as undergraduates by 2024.

In addition, donors established four new endowed medical scholarships and contributed a total of $1.2 million to existing funds that support medical students. Taken together, FY20 gifts to financial aid have allowed the University to respond to the increased needs of students at the undergraduate, graduate and medical school levels due to national economic volatility. 

Faculty support was also a major area of growth in FY20. Generous alumni, parents and friends created 15 new endowed faculty positions this year, bringing the total established during the BrownTogether campaign to 90. These include two leadership positions — the directorship of the Institute at Brown for Environment and Society and the directorship of the Howard R. Swearer Center for Public Service — and professorships at various levels in brain science, physics, economics, medicine and international affairs. 

Endowed chairs give Brown the means to attract and retain the best teachers and scholars, strengthening teaching, research and community engagement. Broadening or deepening a department’s teaching and research capabilities in important areas expands opportunities for students.

Education and Research

Goal: $811 million
Raised as of June 30, 2020: $940 million

FY20 Highlights

One of the BrownTogether campaign’s major priorities is to build upon the University’s strengths in areas where the University can lead, and where research and scholarship can translate into meaningful solutions to society’s biggest challenges. This year, donor support expanded the University’s capacity for groundbreaking discovery and timely discussions in a variety of fields, including brain science, environmental science, race and ethnicity, public health, and medicine. 

The Robert J. and Nancy D. Carney Institute for Brain Science attracted more than $30 million in funding to foster innovation across its research programs. The Center for the Study of Race and Ethnicity in America received a Mellon Foundation grant to connect scholars studying social issues related to race and ethnicity, and also accepted a donor-established research fund to support its programmatic activities.

The Watson Institute for International and Public Affairs and the Institute at Brown for Environment and Society each eclipsed $10 million in fundraising, with a significant portion of their totals being dedicated to support of faculty and postdoctoral research, as well as graduate and undergraduate student engagement in their research agendas. The Pembroke Center for Teaching and Research on Women raised more than $800,000 in FY20.

New support for the Division of Biology and Medicine has allowed both clinical and research faculty to contribute new knowledge and approaches to the diagnosis and treatment of COVID-19, in addition to the division’s ongoing work with Alzheimer’s disease, cancer, reproductive health and addiction. The University recently established the Cancer Center at Brown University, which involves 150 investigators conducting basic, clinical and population research. Gifts and grants have provided the center’s affiliated faculty with more than $40 million to support research and clinical trials.    

Donors also provided funding this year to expand experiential learning opportunities. A $10 million fund was established to provide support for students on financial aid who wish to participate in summer internship and research opportunities. A second fund of $1 million was established at the Institute at Brown for Environment and Society to support undergraduate engaged learning related to climate change. Although many of these opportunities have shifted to remote experiences as a result of the pandemic, Brown is committed to expanding access to learning opportunities beyond the classroom.            

Campus and Community

Goal: $750 million
Raised as of June 30, 2020: $532 million

FY20 Highlights

Through the BrownTogether campaign, the University seeks to boost the competitive excellence of its athletic programs and enhance the overall student-athlete experience. This year, donors contributed more than $17 million to Brown Athletics, supporting a variety of teams and facilities upgrades. Approximately $4.8 million was raised for the renovation of Meehan Auditorium, home of the men’s and women’s ice hockey teams. Additional gifts were made to the Center for Lacrosse and Soccer, phase II of the Marston Boathouse renovation, and updates to the men’s and women’s basketball facilities in Pizzitola Memorial Sports Center.

The Brown University Sports Foundation (BUSF) held its first-ever giving day on Oct. 30, 2019, where it raised more than $1 million for the BUSF Athletics Annual Fund. Overall, Athletics received 34 gifts of $100,000 or more for capital projects, team endowments and current-use funding.

Fundraising continued this year for Brown’s new Performing Arts Center. Four major gifts to the project in FY20 brought the total raised to $179 million, representing 89.5% of the ultimate goal. Construction on the center has proceeded during the pandemic, although the completion of the building will be delayed somewhat.

Brown Annual Fund

Goal: $400 million
Raised as of June 30, 2020: $288 million

FY20 Highlights

In fall 2019, the Division of Advancement launched a re-imagined Brown Annual Fund, transforming it into a family of funds that encompasses all annual giving opportunities. This includes The Brown Fund, which supports financial aid and provides immediate-use funding where it is most needed across the University; the Brown University Sports Foundation (BUSF) Athletics Annual Fund; and annual funds to support the School of Engineering, School of Public Health and Warren Alpert Medical School. In addition, three impact funds have been established under the Brown Annual Fund umbrella: the Pathways to Diversity and Inclusion Fund, the Campus Sustainability Fund, and the BrownConnect Fund. Despite the global pandemic, BrownConnect continues to take advantage of a digital platform that connects students with alumni for mentoring, advice and internships.

Overall, the Brown Annual Fund family of funds raised $43.5 million from more than 30,000 donors in FY20. This total was boosted by a record-breaking Giving Tuesday on Dec. 3, 2019, during which members of the community donated more than $3.7 million in a 24-hour period. 

The Brown Fund finished at $32 million for the year, surpassing the FY19 total of $31.9 million. The Brown Medical Annual Fund raised more than $1.5 million, making it one of the top three fiscal years in the fund’s history, and the Athletics Annual Fund surpassed its goal of $3.6 million. The Parents Annual Fund also had a strong year, raising more than $7.6 million in current-use funding.

In addition, the Brown community raised $625,000 for the Inman Page Black Alumni Council Brown Annual Fund Scholarship, more than quadrupling the $131,000 raised for this purpose in FY19. This scholarship was established in June 2018 by the Inman Page Council to commemorate the 50th anniversary of the 1968 Black Student Walkout. This year, amid the backdrop of the pandemic, increased economic hardship, and protests worldwide against anti-Black racism, members of the Brown Class of 1995 stepped forward to substantially increase this fund. A Reunion honorary co-chair funded a $250,000 2:1 challenge, inspiring 181 additional members of the class to join in supporting the scholarship. As a result, the IPC BAF Scholarship is supporting seven students during the 2020-21 academic year.  

The generosity of Brown’s donors continues to fund the University’s investments in its people and its community during an unprecedented time. 

Fundraising Report contributed by Brown University’s Division of Advancement