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Seton Hall University

Facts About Finances, Investments in the Academy, and Shared Governance

The University Administration, in consultation with the Faculty Senate leadership, provides the following information:

Shared Governance/Transparency

The Faculty Senate is the campus-wide vehicle of faculty governance.

As defined by the Faculty Guide, the Faculty Senate, composed only of faculty, represents the faculty of the College of Arts and Sciences, the College of Communication and the Arts, the W. Paul Stillman School of Business, the School of Diplomacy and International Relations, the College of Education and Human Services, the South Orange University Libraries, the College of Nursing, the School of Health and Medical Sciences and the School of Theology in matters of academic policies and procedures, as well as matters of faculty welfare. The Faculty Senate has the right and duty to make recommendations on academic policy and to represent the faculty in matters that affect such faculty as a whole and on matters of campus-wide importance.

The Faculty Senate is duly elected by the faculty of all represented Colleges and regularly communicates with the president, provost, and other University leaders.Of the 129 resolutions received since June 2020, the Office of the Provost has responded with detailed and often nuanced responses to resolutions that sometimes raise multiple issues and make fine points. The resolutions and our responses are available to faculty through the Faculty Senate blog. While we have not been able to agree to all proposals, in many instances, we have been able to reach common ground and we have found new steps forward. On occasion, there has been one response to multiple resolutions or a response that we have determined did not need a response. Eight resolution responses are currently outstanding.

Seton Hall is committed to shared governance in theory and practice.

Each of the University's many ad hoc committees features wide University participation, including faculty nominated by the Faculty Senate in accordance with the principles of shared governance and the terms of the Faculty Guide. Faculty serve on all planning and implementation committees (e.g., Harvest Our Treasures, Seeds of Innovation, the Implementation Steering Committee), health and safety committees (e.g., HICT) and the University Budget Committee.

The University Budget Committee, which includes Faculty Senate-nominated members and student representatives, serves in an advisory capacity on key matters involving the University budget.

While the Board of Regents has ultimate fiduciary responsibility for the University, the Budget Committee plays an integral  role in providing analysis, feedback and input on budget parameters and informing the annual budget development process. To fulfill this fiscal duty, the committee is provided key access to the University’s interim financial results, enrollment data, resource allocation, and other important updates on University financial operations.

University decisions are guided by our Catholic mission. Our religious identity is at the heart of all we do.

Soon after his arrival, President Nyre gave greater prominence to Catholic mission by creating an Executive Cabinet position dedicated solely to facilitating mission training and recruitment at the University and to working with students through initiatives that hold Catholicism at their core.

Catholic mission is further reinforced in Harvest Our Treasures, which states," As a Catholic institution of higher education with a strong intellectual and spiritual heritage, Seton Hall University is committed to certain principles whose purpose is the promotion of human flourishing in all its beauty, richness and depth."

Faculty are highly involved in health and safety decisions.

President Nyre formed the Health Intervention and Communication Team (HICT) in February 2020 to analyze and discuss health and safety measures and provide recommendations to the Executive Cabinet. Faculty, including those with healthcare backgrounds, have participated in the HICT since its inception. The University remains grateful to HICT members for their time and effort.

During the pandemic, the president and provost met regularly with the Executive Committee of the Faculty Senate and continue to do so.

Meeting with faculty representatives.
The president and provost meet regularly with the Executive Committee of the Faculty Senate. 

Discussions have included:

  • reviewing cashflow projections;
  • strategies to preserve liquidity;
  • shared guiding principles for the AY University Budget;
  • and matters of faculty welfare (i.e., providing choice to faculty members to pause their tenure clocks, if needed during the pandemic and since).

Together during the pandemic, they reviewed contingency budget forecasts depending on the path of the virus. Ultimately the AY2020-21 budget that was reviewed and recommended by the University Budget Committee contained more than $20 million in noninstructional expense reductions and still projected a $12 million deficit. The Board of Regents approved one year of deficit spending, noting the tremendous uncertainty from the pandemic and avoiding a level of expense reduction deleterious to future growth. Having effectively navigated together the threats of the pandemic, the president and provost have continued to meet with the Executive Committee of the Faculty Senate to work toward charting the future of the University amidst the historic financial and demographic challenges currently facing higher education. 

Instruction

The Board of Regents, University administration and Faculty Senate agree that increasing the percentage of the annual operating budget spent on instruction is a priority.

This priority was clearly stated in the Budget Parameters established each year by the Board of Regents for the University Budget Committee. These Budget Parameters also call for, among other improvements, investment in initiatives to benefit students such as the University "affordability agenda."

Provost Passerini reinforced the administration's commitment to further investments in the Academy in her December 15, 2021 memo to the Faculty Senate.

Rebalancing administrative and instructional expenses is a priority and actions are underway.

One in 10 staff and administrators (10 percent) were laid off in June 2020 and not rehired. No faculty were laid off. Moreover, the provost has approved 30 new and replacement faculty lines. Faculty searches are currently underway.

Additional Investments in Faculty and Instruction

In alignment with its strategic plan, the University continues to invest in academics and faculty, with cost savings from administrative cuts and infrastructural synergies reallocated or in the process of reallocation to academics and faculty.  

  • As of April 2023, we have authorized searches for over 30 faculty.   
  • A faculty compensation study, which includes adjunct pay, is underway (See Below “Competitive compensation is a shared goal of the faculty, administration and Board of Regents”). 
  • The Office of the Provost proposed an upgraded full-time faculty position, Teaching Assistant/Associate/Full Professor of the Catholic Intellectual Tradition, which includes the possibility for promotion and increased faculty rights, responsibilities, and compensation, to the Faculty Senate for consideration in Fall 2022.  
  • In fall 2022, we proudly welcomed 40 new faculty members, who bring diverse backgrounds from many academic disciplines, and most are full-time, tenure-track professors who will bring fresh ideas and research, enrich our conversations and engage our students in many ways.  
  • In September 2021 the Provost announced a reinvestment in academics, including faculty hiring and new tenure-track lines, totaling $500,000, which was over and above replacement funding into existing tenure-track lines. 
  • The provost approved 70% of the requested lines and 73% of those are tenure-track.  
  • This aligns with Goal 2 of the Strategic Plan, which "focuses on supporting faculty by strengthening academic quality, research and scholarship, and enhancing equity and inclusion."  
  • Improvements to the Faculty Merit Pay process have been implemented. 
  • We have since January 2022 invested an additional $150,000 per year in faculty-led Academies, which have already yielded approximately $500,000 in grants and a number of proposals for new academic programs, conferences, publications, and research experiences for graduate and undergraduate students.

Seton Hall's academic restructure, Seeds of Innovation, was launched in order to invest more resources in instruction and research, incentivize and reward innovation, and advance academic quality.

Seeds of Innovation is designed to enhance Seton Hall’s academic programs and reputation in an increasingly competitive higher education environment. It is not a cost-savings response to address budget gaps, nor was it ever presented as one.

Competitive compensation is a shared goal of the faculty, administration and Board of Regents.

In his November 12, 2021 State of the University address, President Nyre announced the launch of a faculty compensation study process to assess faculty salaries within the University and in relation to peer institutions. The University will rely on a faculty and administration committee to conduct the study, enlisting a third-party firm with higher education expertise.

We note that the Harvest Our Treasures strategic plan includes a goal to rebalance and increase investments in the academy. The University shares the concern regarding fair and just compensation and teaching loads. Therefore, as warranted by President Nyre, a compensation study, led by a duly appointed committee of faculty and staff and co-chaired by a Senate-appointed faculty member, is underway. We look forward to learning the results of the study. 

The Committee Charge may be found in this announcement by the provost on November 15, 2022 and this additional message from November 22, 2022.

Salary levels are set using peer data and other human resources compensation studies to ensure the University remains competitive in the market, which includes salary and non-salary benefits. In regard to any individual’s employment information, it is not Seton Hall’s practice to comment on — or disclose — any individual’s employment details, including salaries and teaching loads. This common and ethical approach precludes the University from directly responding to aspersions about any employee’s compensation. Additionally, Seton Hall’s executives do not set their own compensation. Rather, they are compensated in accordance with employment agreements that were approved by the Board of Regents. 

IPAD

In September 2020, the Board of Regents voted to initiate a three-pronged Accelerated Program Sustainability Assessment (APSA) process to review the University portfolio. IPAD stands for “interactive program analysis dashboard.” It describes a set of six basic data points provided annually to each department about its academic programs (majors and graduate programs). These data points, most of which are used by every major university, help keep faculty and deans aware of any issues that might warrant their attention. IPAD does not replace or displace any other faculty or administrative process.
 

Finances

Each year, an independent certified accounting firm audits the University finances.

The audit is conducted by Grant Thornton LLP in accordance with auditing standards generally accepted in the United States of America, in a process overseen by the Audit Committee of the Board of Regents. The audit information populates the University’s annual IRS 990 report.

The University's IRS 990 financial reports are available online.

The University's budget cuts in June 2020 were difficult, unavoidable and prudent.

In the spring of 2020 as the pandemic came ashore, the administration briefed Faculty Senate leadership on multiple sets of contingency budget forecasts for AY2020-21, with losses ranging from $33 million to $139.5 million, depending upon reopening variables that would not be clarified until well into the academic year.

Next, upholding shared governance, the University established contingency planning groups inclusive of faculty seated by the Faculty Senate. These groups were vital in developing contingency plans and related budget strategies.

The very difficult decision to make significant cuts — 10 percent of administrators and staff (no faculty members) and operating cuts, as well as salary and benefit reductions — was made when no one knew how long or severe the pandemic would be.

Revenues the University received from parking, room and board fees were refunded. Further, significant COVID relief from the federal government was not a certainty. COVID budget "guiding principles" were developed and reviewed with Faculty Senate leadership to guide contingency budgeting and ultimately the AY2020-21 budget. The guiding principles were shared with the entire University in the 2021 Budget Letter and were as follows:

  • promoting the health and well-being of the University community;
  • being sensitive to University affordability, especially for students with limited means, through enhanced student grants and scholarships;
  • investing in academic quality;
  • rebalancing instructional and non-instructional expense ratios by reducing non-instructional expenses and continuing our investments in faculty positions;
  • enhancing the student living and learning experience;
  • investing to ensure a successful return to campus; and,
  • engaging in transparent communication of carefully considered financial decisions.

The letter concluded with:

"These difficult yet prudent measures demonstrate that Seton Hall is committed to students, community members and the Academy. Rooted in the Catholic intellectual tradition, our balanced actions and continued commitment to excellence will ensure the University emerges from these challenging days as a stronger, more nimble institution that demonstrates the increasing value of a Seton Hall education."

As part of the University’s fiscal recovery actions, in May 2021, Seton Hall made a one-time payment equal to employees' salary reductions in AY2020-21 and resumed full 403(b) contributions. Thereafter, in October 2021, the University made a one-time, additional contribution to the 403(b) accounts of eligible employees in an amount equal to the amount that was previously eliminated. Furthermore, in November 2021, salaries were returned to pre-pandemic levels and the University made a one-time payment equal to each eligible employee's salary reduction during the current academic year. In February 2022, the University announced an AY2021-2022 cost-of-living adjustment for all employees and retroactive merit increases for approximately 40 faculty.

The University's reserves constitute a valuable asset, though their use is largely restricted.

The University reserves include (1) deposits with bond trustees, (which the University cannot access) and (2) investments, which are almost entirely endowment funds.

The purpose of the endowment is not to fix short-term budget shortfalls or manage crises like those that many institutions are facing now, but rather to support our Catholic mission and our commitment to academic and research excellence for current and future generations.

Further, approximately 65 percent of the endowment funds have been specifically designated by donors to support student scholarships, academic programs and professorships, so those spendable amounts from the endowment cannot be used at the discretion of the University.

While the endowment provides an ongoing stream of funding for our students, faculty and programs, the University is not free to dip into the principal of the fund without facing serious consequences or adversely affecting future generations.

The University is unanimous in recognizing the need to raise funds for the endowment to support student scholarships and faculty. This is a key component of current and future Board of Regents-approved fundraising efforts.

Seton Hall's endowment, under investment with our investment manager, was $256.5 million on June 30, 2019. In April 2020, when the pandemic caused the markets to retreat, Seton Hall’s endowment was $247.9 million.  As of December 31, 2022 Seton Hall’s endowment was valued at $308.4 million, which includes amounts committed for annual operating support. This reflects an increase since June 30, 2019 of more than 20 percent in the endowment and includes investment return for the fiscal year of 0.9 percent and for the trailing 12 months (2022) of -12.1 percent. 

Including the return from dividends, the S&P 500 returned -18.11 percent during 2022. 

Importance of Endowment

Seton Hall is ranked No. 137 among national universities by U.S. News & World Report. By contrast, there are more than 190 higher education institutions with endowments greater than $500 million. This means some institutions ranked lower on U.S. News’ list benefit from larger endowments (with larger annual draws for operating support) than Seton Hall’s. The endowment remains the purview of the Board of Regents as part of its fiduciary responsibilities to the University. And the Investment Committee of the Board of Regents regularly reviews its investment policy

Further increasing financial resources in totem and the endowment in particular is critical to the University successfully achieving its future academic goals and aspirations; it has actively if not aggressively sought and received additional funds through both gifts and grants, well surpassing previous records in the last two years with significant benefits accruing thereby to students, faculty and campus infrastructure.    

Seton Hall's endowment is managed to balance appropriate risk while securing short- and long-term returns.

The primary goal for endowment management is delivering steady and reliable growth, particularly during periods of significant market upheaval.

A common measure of risk is the standard deviation (volatility) of an investment. From May 2017 through December 2021, Seton Hall’s endowment had a standard deviation of 8.4 percent, while the S&P 500 had a standard deviation of 15.9 percent. In the first quarter of 2020 during the widespread market panic at the onset of COVID-19, the S&P 500 fell 19.6 percent.

Bond Rating Assessment of Seton Hall: Stable with ‘good financial practices and proactive management’

Through prudent stewardship, shared sacrifice and a series of difficult financial decisions, the University was able to weather the storm spurred by Covid and thus far, other wider economic pressures on higher education. The University has emerged stronger as a result of its actions (including the layoff of 10 percent of its administrative staff) as is evidenced by multiple bond rating assessments over the last several years including Standard & Poors (S&P) Global in July 2022 rating the University’s bonds as “stable” and “investment grade,” noting that:  

  • We consider SHU's budgeting conservative, including routine budgeting for depreciation expenses, which we view as a best practice. 
  • SHU's strategic plan remains focused on improving academic quality, increasing student engagement, and operating with excellence. 
  • SHU recognizes the need to continue to grow resources while maintaining operating surpluses. In our view, it has good financial practices and manages proactively. 
  • SHU has formal endowment and investment policies. It operates according to a five-year strategic plan and maintains a formal reserve and liquidity policy. SHU meets standard annual disclosure requirements.