ANNUAL REPORT FY2020 01 UNIVERSITY FACTS UNIVERSITY FACTS COLLEGES AND SCHOOLS Helen Way Klingler College 02 FROM MARQUETTE’S LEADERSHIP of Arts and Sciences 04 MISSION College of Business Administration 06 BEYOND BOUNDARIES AND MASTER PLAN UPDATES J. William and Mary Diederich College of Communication 10 DIVERSITY AND INCLUSION College of Education 12 COVID-19 RESPONSE Opus College of Engineering 14 STUDENTS AND CAMPUS LIFE Marquette University is a Catholic, Jesuit university College of Health Sciences College of Nursing 16 ACADEMICS AND RESEARCH located near the heart of downtown Milwaukee, School of Dentistry 18 LEADERSHIP Wisconsin, that offers a comprehensive range of Graduate School 20 PHILANTHROPY AND ECONOMIC ENGAGEMENT Graduate School of majors in 11 nationally and internationally Management 24 FINANCIALS recognized colleges and schools. Law School 50 UNIVERSITY OFFICIALS STUDENTS A Marquette education offers students a virtually 11,819 total enrollment unlimited number of paths and destinations, and 8,515 undergraduate prepares them for the world by asking them 3,304 graduate and professional

to think critically about it. ACADEMICS Undergraduate programs: Along the way, we ask one thing 83 majors and 80 minors and pre-professional programs in of every student: dentistry, law and medicine Postgraduate programs: BE THE DIFFERENCE. 74 doctoral and master’s degree programs, It’s not just a tagline — it’s what Marquette 24 graduate certificate programs, and professional University asks of its community. It’s what our degrees in dentistry and law

students, faculty and staff aspire to do every day. FACULTY AND STAFF 1,297 faculty and academic positions 1,635 exempt and non-exempt staff

ATHLETICS 16 NCAA Division I athletics teams Competes in the Big East Conference

MARQUETTEMARQUETTE UNIVERSITY UNIVERSITY FINANCIAL ANNUAL REPORT REPORT FY2020 FY2020 22 FROM MARQUETTE’S LEADERSHIP

A MESSAGE FROM A MESSAGE FROM Dr. Michael R. Lovell, Joel Pogodzinski, President Senior Vice President and Chief Operating Officer There’s no question that responding to the coronavirus pandemic occupies a majority of the waking hours for many Like so many institutions across the nation, Marquette University faces in the Marquette University community. Fortunately, it doesn’t unprecedented challenges brought on by a global pandemic, shifting demographics and an industry business model that is no longer sustainable. Dr. Michael R. Lovell occupy every hour of every day for every individual. In fact, Joel Pogodzinski At the same time, these very challenges present a watershed moment for Senior Vice President and President as you will read elsewhere in this annual report, our faculty, Marquette University our great university, as we have the opportunity to leverage our tradition Chief Operating Officer staff, students, alumni and community partners continue to of excellence and use our position of overall financial strength to ensure selflessly step forward to Be The Difference in the lives and a strong, bright future for generations of Marquette students to come. “To everyone who has work of others. Though the financial impacts of COVID-19 were unexpected and disruptive, “ Every day I am honored and supported Marquette they were not insurmountable. Precisely because Marquette has been privileged to see excellence University in the past year, Together we continue to plan for and create a better future for proactive in its strategic and economic planning, the university is respond- in how our faculty teach whether in ways small Marquette University. We have opened a new facility for our ing swiftly and nimbly to address the near-term budget shortfalls. and engage with students; or large, thank you for growing Physician Assistant Studies program and are refining The longer-term economic impacts are without a doubt challenging. We as how our students serve one your faith. Your belief in plans for a new College of Business Administration building. a university are prepared for the difficult decisions in front of us. Neverthe- another and the communities Marquette helps us.” Outstanding partners — many from the community and even less, our financial strength, confirmed by Moody’s affirmation of our A2 around us; and how our staff more from among our alumni — are standing alongside us to rating and stable outlook, and the proactive planning in which we have work to support the many already been engaged position us well to thoughtfully discern and make possible scholarship programs and research efforts. Our ways in which we provide strategically prepare for Marquette’s future. Cura apostolica — the care for students continue to inspire us by earning national recognition the institution — drives us forward. a transformative Catholic, and calling on their university to do more to become Jesuit education.” What will truly make all the difference in how Marquette begins to chart its increasingly diverse. next 139 years is — as it has always been — the people. To everyone who has supported Marquette University in the past Every day I am honored and privileged to see excellence in how our faculty year, whether in ways small or large, thank you for your faith. Your teach and engage with students; how our students serve one another and belief in Marquette helps us, as stated in our vision statement, the communities around us; and how our staff work to support the many ways in which we provide a transformative Catholic, Jesuit education. to “reach beyond traditional academic boundaries and embrace new and collaborative methods of teaching, learning, research The Marquette of the future will look different. What will never change is our mission and the foundational pillars of excellence, faith, leadership and and service in an inclusive environment that supports all of our service that guide us in all we do. members in reaching their fullest potential.”

3 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 4 MISSION

MISSION MATTERS

CAMPus IMPACT PEACE AND JUSTICE The Center for Peacemaking’s The Center for Peacemaking CAMPus Impact experience hosted “A Jesuit Approach won the International Town to Peace and Justice.” The and Gown Association’s Intern event featured a presentation Challenge, which highlights by Rev. Owen Chourappa, A REFLECTION student-led community S.J., about how peacemak- ON RESILIENCY projects in collaboration with ing plays a role in his work nonprofits or local government. protecting migrants and Healing and resiliency when the marginalized in India. CARE OF OUR all is in turmoil? They seem COMMON HOME SHARING HOPE unattainable. Turbulent uncertainty can cast us into a spiraling inner The university began using Marquette University a new type of brine to melt Neighborhood Kitchen darkness. How do we escape? snow and ice. The method retrieved unused food from is more economical and campus dining halls and Oddly, the remedy is what feels most remote: hope! environmentally sustainable, catered events to feed those and safer for campus. in need. Staff and volunteers Hope orients us to something beyond our present despair. It does not kicked efforts into overdrive FAITH-BASED GRADUATE to keep the program going escape into fantasy, but provides meaning and the promise of a better STUDENT GROUP amid the COVID-19 pandemic. The weekly group is designed future. Hope restores purpose. It guides us as we navigate the chaos. to be a supportive community SOCIAL JUSTICE SUMMIT It opens the door to healing and gives strength to carry on. where students are encouraged Marquette hosted to reflect on their lives in light “Art Activated” with Such is the wisdom of Ignatius of Loyola in his counsel to those in deso- of faith, especially amid NO STUDIOS to address struggles like the pandemic. social justice issues. lation. He challenges us to remember past moments of consolation with MISSION EXAMEN VIRTUAL FAITH EVENTS the admonition that the present darkness will pass. Trusting in God’s Marquette participated in Campus Ministry offered two the Association of Jesuit virtual retreat experiences: goodness, we look to the future with hope. Colleges and Universities a senior retreat — which Mission Priority Examen gave the Class of 2020 In these times, when so much has been upended in our lives, let us feed process to reaffirm the the opportunity to reflect our hearts and souls by remembering those places that stir our hope. university’s mission and on their Marquette journey establish goals for the future. and consider how they would From Rev. James Voiss, S.J., like to go forward — and a MISSION WEEK QuaranTeams Extravaganza, Vice President for Mission and Ministry The theme of Mission Week during which students 2020, “Open to Gratitude,” connected with others encouraged all to make space through games, activities to feel the presence of God. and conversation.

Mission Week 2020

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 6 5 BEYOND BOUNDARIES AND MASTER PLAN UPDATES

WE PLANT THE SEEDS THAT ONE DAY WILL GROW.

St. Óscar Romero

Planned new facility will transform Marquette business education

With high demand for ming within the Women’s MARQUETTE RETAINS A2 RATING FROM INFLUENTIAL Innovation Network, the Athletic its offerings — including the CREDIT-RATING AGENCY MOODY’S In April 2020, the MARQUETTE and Human Performance 12th-ranked real estate and Marquette Board of Trustees unanimously approved a public debt issuance MOVES UP IN 2020 Research Center, the Kohler 17th-ranked supply chain manage- of $150 million to provide the university with additional financial flexibility. U.S. NEWS RANKINGS ment programs* — the Marquette Center for Entrepreneurship in Credit-rating agency Moody’s assigned Marquette an A2 rating, considered “investment the 707 Hub and many colleges. University College of Business grade.” Moody’s also affirmed the A2 rating on the university’s outstanding rated unsecured U.S. News & World Administration is well-positioned to Unique components of the new general obligation debt. Report’s 2020 build a critical talent pipeline for the building aim to transform According to Moody’s, the A2 rating reflects Marquette’s very good market position with regional business community. In business education at Marquette, Best Colleges listed late January, President Michael such as wrap-around advising and sizable operating revenue of $453 million in fiscal 2019. Moody’s added that although the Marquette at No. 84 — Lovell announced that a new home career guidance, including centers university faces operational challenges from the effects of the COVID-19 pandemic, manage- for Marquette Business would rise for student success and career ment is taking strong action to respond. Marquette’s stable outlook is more favorable than tied with six other schools on the site of the now-demolished development; a multifunctional the industry as a whole — as a whole Moody’s had recently downgraded the outlook for the — among the nation’s McCormick Hall at 16th Street and special event space where top higher education industry to negative. Wisconsin Avenue. executives and recruiters can meet ranked colleges. The the next generation of leaders; and As an anchor for the west ranking is up from upgraded signature labs and gateway to the heart of Mar- IDEATION REVIEW COUNCIL FORMED In December 2019, the Office of Research and quette’s urban campus, the new classrooms, including a stage 89 in 2019. Marquette Innovation began recruiting creative campus thinkers — students, faculty and staff — to serve building will convene world-class where business students can pitch on a new Ideation Review Council. The council’s charge: to also made the top 100 faculty, students and industry and share their ideas with industry, review and analyze more than 1,600 ideas and suggestions leaders. Its innovative features investors and the larger community. in the publication’s lists of generated in response to Marquette’s “Think Different, and flexible learning spaces will Vice President for Planning and Best Colleges for Veterans be intentionally designed to help Facilities Management Lora Act Different to go Beyond Boundaries” event in November, (No. 52), Best Value foster creative thinking in Strigens says Marquette Business which convened the university community to discuss ways students of all disciplines. faculty, staff, students and alumni to address multiple headwinds in higher education. Schools (No. 55), Best will take part in an inclusive Dedicated space for interdisciplin- The 25-member council worked with Dr. Jeanne Hossenlopp, Undergraduate Teaching ary innovation leadership design process to ensure the new vice president for research and innovation, to categorize and building addresses the needs of (No. 76), and was included programs — including the evaluate submissions based on their potential to move Mar- tomorrow’s students, educators nationally acclaimed Excellence quette forward and sustain its position as a leading Catholic, in its list of “A-Plus and businesses. in Leadership program, developed Jesuit university. by Dr. Kristina Ropella, Opus Dean Vice President for University Schools for B Students.” of the Opus College of Engineer- Advancement Tim McMahon and Recognizing the profound effect of COVID-19 on Marquette’s ing — advances a university-wide Acting Keyes Dean Tim Hanley have needs and opportunities, the council shifted focus this spring. initiative to develop an inclusive led a strong fundraising campaign Along with the university’s COVID-19 Response Team leaders, the IRC solicited further input from culture of innovation across with the support of alumni, parents the campus community on improving the near-term Marquette experience for specific stakehold- campus. This initiative has and friends. They continue to seek ers and on long-term strategic planning solutions that account for the pandemic’s impact. supported research and program- additional philanthropic support.

*U.S. News & World Report, America’s Best Colleges 2020

7 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 8 BEYOND BOUNDARIES AND MASTER PLAN UPDATES

TEACH US TO GIVE AND NOT COUNT THE COST.

St. Ignatius of Loyola

New building, expanded program will prepare more Jesuit-trained PAs

NEW WOMEN OF MARQUETTE EMPLOYEE RESOURCE MARQUETTE EMPLOYEE With approximately have had a 100 percent pass rate GROUP Marquette last fall launched its seventh employee RESOURCE GROUPS on their national board exams, vying resource group, its third dedicated to female faculty and staff. 1,400 applicants and all graduates secured jobs All Marquette Employee annually for just 55 spots, within six months. ERGs are supported by the Office of Institutional Diversity and Inclusion and help advance the Culture Resource Groups have Marquette University’s Physician of Inclusion goal theme outlined in the university’s strategic plan, Beyond Boundaries. Such groups have Assistant Studies program — one The facility at the northwest been formed over the past few years to help support, retain and attract the best employees — each ERG a University Leadership of the top such programs in the corner of West Clybourn and North 17th streets is a modern, aims to promote a sense of community and build personal and professional networks to foster a diverse Council liaison, and while nation — had long been ripe for and inclusive community. growth. In fall 2019, the College gleaming, 44,000-square-foot the ERG model is based of Health Sciences opened a new building both beautiful and Specifically, the Women of Marquette ERG seeks to foster professional, personal and spiritual on common backgrounds $18.5 million dedicated facility practical, intentionally designed growth through career development and educational workshops, volunteer opportunities, networking, to house the program, which to prepare students to excel in or interests, in the spirit information sharing, mentoring and speaker panels. The ERG also aims to serve as an umbrella group welcomed its first expanded today’s health care settings. to help support and promote all the initiatives on campus for women. of inclusivity and allyship, cohort of 75 students. Classrooms are designed to any employee can join any The need to train more PAs enable collaborative learning, POPULAR, GROWING MENTOR PROGRAM EARNS and the full simulation center — ERG including: is of national urgency, as NATIONAL AWARD The university’s Alumni Association the Association of American complete with an emergency room, operating room, intensive Mentor Program last fall was awarded the “Silver Level • Latinx Faculty and Medical Colleges has predicted care area and inpatient hospital Circle of Excellence” from the Council of Advancement and Staff Association a substantial shortage of room — is equipped with high- Support of Education. primary care physicians by 2032. • LGBTQ Employee “The PA profession has been fidelity technology and For the typical college student, career discernment is Resource Group identified as one to fill this gap,” mannequins to simulate real often a difficult and complicated subject. Sponsored by says Mary Jo Wiemiller, clinical patients and scenarios that the • Marquette Black the Marquette University Alumni Association, the Mentor associate professor and chair of students will see in real life, Faculty and Staff Program aims to bring clarity and inspiration to students Wiemiller says. In the full Network the Physician Assistant Studies across all academic areas. Department. “That was one of medical suite with 19 clinical exam • Marquette Moms the driving forces for us to take a rooms, actors can also come in to Launched in 2013, the program, which pairs student look at our program, to see if we role-play patient scenarios with mentees with alumni mentors in a one-on-one model based • Marquette Social had the capacity to expand it and students. All simulation and exam Professionals on area of study and career interest, has more than tripled help meet the health care need rooms offer one-way viewing in size since its inception. Not only is the program in high windows for peer observation • Womxn of Color in this country.” demand, but 100 percent of participants would recommend without distraction. Resource Group In the most recent U.S. News the program to fellow students and alumni — and more & World Report rankings, The expanded program also • Women of Marquette than 90 percent of mentors and mentees complete their Marquette’s PA program ranked added 65 new partner clinical established goals by the end of the year. 26th in the country. For the past training sites. Alumni mentors reside in more than 25 states, many of whom travel to Milwaukee at some 10 years, the program’s students point during the year for program events or just to connect face-to-face with their mentee.

9 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 10 DIVERSITY AND INCLUSION

LOVE IS SHOWN MORE IN DEEDS THAN IN WORDS.

St. Ignatius of Loyola

EOP events celebrate 50th anniversary

ENROLLMENT SETS DIVERSITY RECORDS Fall 2019 The 2019–20 academic ondary education-focused enrollment saw Marquette’s most diverse freshman class in history, outreach programs and services year marked the 50th with nearly 30 percent of first-year enrollees being students of that identify and assist students anniversary of Mar- color. Twenty-four percent of freshmen are first-generation college from disadvantaged backgrounds. CONFERENCE quette’s Educational students, which is again the highest percentage in university history. Record percentages of the undergraduate, The steering committee also graduate and professional studies student bodies are also students of color and represent the most diverse student ADDRESSES POVERTY Opportunity Program, AND TRAUMA partnered with the Marquette body Marquette has ever enrolled. In addition, a record 20 percent of current Marquette faculty are people of color. a first-of-its-kind initiative to Forum to spotlight the issues In October, Marquette assist underrepresented and EOP was founded to address TOTAL STUDENTS STUDENTS OF COLOR co-hosted the joint Summit first-generation students with and invite reflection and discus- Undergraduates 8,515 28% on Poverty and SWIM admission to and success in sions around equitable access to Graduate and professional students 3,304 18% Conference. SWIM college. Launched in 1969 with educational opportunities. Forum First-year students 1,974 29% a 40-student cohort and a single programming was centered on (Scaling Wellness in staff member, EOP has since the theme of “pathways to Milwaukee) is a Marquette- assisted thousands of Marquette educational access and opportu- led, community-wide students and today serves about Dr. Howard Fuller, nity.” The Marquette Forum also ROUND OUT THE RACE, ETHNIC AND initiative to address the distinguished professor 500 students each year. offered $500 grants to faculty INDIGENOUS STUDIES PROGRAM Seven new of education and founder/ impacts of generational and staff, departments, academ- director of the Institute for To recognize EOP’s long and faculty members joined Marquette this year as part trauma in Milwaukee. the Transformation distinguished history and champi- ic units or student organizations of a third cluster hire to bolster the university’s Race, planning events associated with The conference theme of Learning on the work it does today, Ethnic and Indigenous Studies program. REIS, launched these issues. was “Self-Reflection, Hope Marquette assembled a sizable in 2017, is housed in Marquette’s Klingler College of steering committee co-chaired and Collective Impact.” Forum events last fall and winter Arts and Sciences and supports interdisciplinary majors by university leaders to plan featured LoveWalk founder and and minors in several fields. The cluster hire advances COUNSELOR HONORED EOP 50th anniversary celebrations nationally recognized speaker Saul two key university priorities: to achieve a more diverse AS INFLUENTIAL LATINA throughout the academic year. Flores sharing his story of persever- faculty mix, and to build a critical mass of specialists Dr. Marla Delgado-Guerrero, During the 2019 Reunion + ance during First Generation and in the racial and ethnic aspects of their academic Homecoming Weekend, more Latinx Heritage Month; radio/TV adjunct professor and disciplines. Departments in five university colleges will than 400 alumni, parents and personality and writer Charlamagne INCLUSIVE HIRING LEADS TO AWARD mental health counselor friends from 25 states gathered tha God and writer/film producer benefit from this latest cluster of scholars, who join In October 2019, Marquette received the first and diversity coordinator in on campus to pay tribute to the 14 other academics previously recruited in clusters to Chrishaunda Lee Perez on Black Employer of the Year Award from Creative Marquette’s Counseling university’s inaugural EOP class emotional wellness; Dr. Patricia support REIS. Employment Opportunities, a local career and EOP celebrations kicked Center, earned a spot on and its founding director, Devine on creating inclusion and workforce development organization that promotes off with a meeting at Dr. Arnold Mitchem, Grad ’81. THE 2019–2020 CLUSTER HIRE SCHOLARS Madison365’s annual list of Marquette Hall. reducing unintentional bias; inclusive hiring. The award specifically recognized • Dr. Javiera Perez Gomez, Philosophy Wisconsin’s most powerful Under Mitchem’s 17-year leader- award-winning educational leader Marquette for its commitment to hiring people with Latina and Latino individu- ship, Marquette’s EOP became a Dr. Freeman Hrabowski, president • Dr. Michelle Rodrigues, Social and Cultural Sciences intellectual and physical disabilities. model for many other universities of the University of Maryland, • Dr. Ethan Schmick, Economics als. The list recognizes and even for the U.S. Department Baltimore County, on creating • Dinesh Sabu, Digital Media and Performing Arts successful professionals of Education in the development educational access; and a panel • Dr. Larry Zhiming Xu, Strategic Communication and those who positively of its TRIO programs — postsec- discussion featuring EOP alumni. • Dr. Allison Murray, Mechanical Engineering impact their communities.

11 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 12 COVID-19 RESPONSE

GOD’S PURPOSE IN CREATING US IS TO DRAW FORTH FROM US A RESPONSE OF LOVE ... .

St. Ignatius of Loyola

February 27 University responds to COVID-19 pandemic MARQUETTE GOES VIRTUAL COVID-19 planning begins Classes moved online in one week for spring semester March 12 1,500 University announces Like universities across the in-person classes are suspended nation, Marquette was forced to take swift action in March 2020 Virtual town hall events with an average online Employees shift to 7 when the global COVID-19 remote work pandemic took hold. The Big East and NCAA attendance of people and more than university canceled all in-person basketball tournaments 908 are canceled classes and suspended on- campus residency, shifting its video views March 23 academic delivery to a fully 10,000 Remote teaching and learning are extended online modality. All but the through the end of most essential employees spring semester moved to a work-from-home 18 Masses held online for campus community March 25 environment. RETURNING TO CAMPUS Students move out of For the next several months, residence halls Marquette’s COVID-19 Response Fall 2020 semester courses that began March 26 Team — a broad group of subject in-person. (Of those, 82 percent had First live-stream campus matter experts from all areas of 61% fewer than 20 students.) Mass is celebrated campus — convened daily to plan 11,000 Welcome kits April 17 ahead and make real-time distributed for students returning Faculty, staff and student employees who University institutes staff to campus (kits included a mask, decisions to ensure continuity of completed virtual return-to-campus training and faculty furloughs, other instruction, research and vital thermometer and hand sanitizer) 2,190 cost-saving measures campus operations, such as June 2 information technology support and Students completed the SafeColleges New student SPARK online education module before the Marquette University Police Concurrently, the university enacted orientation sessions Department. 11,071 returning to campus go virtual financial risk mitigation measures to In late spring, the university formed a cover an approximately $15 million July 31 Milwaukee Health COVID-19 Recovery Team consisting near-term spring 2020 shortfall UPLIFTING INVESTMENTS Department approves of more than 100 people and charged caused by the pandemic. While university’s plans for it with creating a multi-phased and similarly mitigating FY21 impacts, $ Emergency funds raised for students pursuing fall semester flexible Recovery Plan aimed toward the university is engaging campus in health care careers through a university- 200,000 branded face mask fundraising campaign August 26 a return to in-person instruction and various workstreams to strategically Fall 2020 undergraduate on-campus residency for the fall and structurally position Marquette classes begin 2020 semester. for continued economic strength. $ Amount the university has been 11 million awarded for 14 projects related to COVID-19 since April 2020

$ Investment in technology to 2 million improve live and remote learning

13 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 14 STUDENTS AND CAMPUS LIFE

GO FORTH AND SET THE WORLD ON FIRE.

St. Ignatius of Loyola

COVID-19 no match for Marquette Pride CONTEST BREWS BIG IDEAS Innovation is always the name of the game in the Brewed Ideas Challenge, an annual student business and social venture competition from Marquette Univer- Despite having to are with you, ready to support you.” sity’s Kohler Center for Entrepreneurship and Social Innovation cancel traditional The university’s social media Initiative in partnership with Milwaukee-based Brady Corp. The 2020 competition required some creativity accounts helped this video from organizers to take the Shark Tank-style pitch competition virtual. Students from five states, Puerto Rico, ATHLETICS Commencement LEADERS RECOGNIZED and other initiatives reach broad Colombia and Peru were among 10 finalists competing to impress Brady’s judges and win $21,000 in seed with large celebrations audiences. Facebook featured funding. This year’s social innovation winners were The Color of English, which teaches students how to build gatherings of family and friends, Two outstanding Marquette a heartwarming 20-minute great sentences, and 4.0 Certification by Kratos, offering up-skilling for the so-called Fourth Industrial Revo- Marquette honored its spring video of graduates’ childhood lution. Traditional business track winners were JD BNB LLC–Short Term Rentals, providing short-term lodging Athletics leaders were 2020 graduates in creative ways and current photos. Relatives in Milwaukee, and Best Face Forward Retractable Badge Reel, with a no-twist component to keep ID badges honored this past spring. and warmly welcomed them as posted messages celebrating facing forward and visible. new alumni. their graduates on Twitter with Vice President and Director the hashtag #marq20, and an Graduating classes from every of Athletics Bill Scholl #MUGrad2020 Instagram photo program were dispersed this STUDENTS HONORED FOR SCIENCE AND mosaic spotlighted individual spring as the threat of COVID-19 SOCIAL JUSTICE Undergraduate women in two received an Under Armour graduates — many in caps prompted the university to Marquette colleges earned awards for exceptional Athletic Director of the Year move students off campus and gowns — with messages work in activities related to their fields of study. and shift instruction online. To reflecting their experiences as Award from the National Marquette students. Senior Alissa Wuorinen, a biomedical sciences help families celebrate their Association of Collegiate graduates individually, University Traditional, end-of-year scholarship major in the College of Health Sciences, won a Advancement partnered with dinners gave way to virtual, but Science Coalition award for her second-place Directors of Athletics — an alumni-owned business to more intimate, calls and web- finish in the national nonprofit’s he was one of just four create and deliver congratulatory based interactions between “Fund it Forward” video challenge. Wuo- directors in the Division yard signs that families could donors and recipients. The format rinen’s video made the case for research purchase. About 1,100 signs were enabled more personal advice funding and highlighted her work as part 1-AAA category. Women’s sold, raising more than $4,000 and encouragement for graduates of a prestigious National Institutes of for the university’s Bridge to the — particularly valuable amid a Basketball Head Coach Health R01 grant to study circadian Future Fund, which supports challenging time. rhythms’ impact on physical and Megan Duffy received the students with changing financial The 2020 graduates also were circumstances. TOWN-GOWN PROGRAM TAKES TOP mental health. 2020 Big East Coach of immediately welcomed as new HONORS A Marquette University Center for Marquette also created a video alumni, with virtual Marquette Junior Lelah Byron, studying journal- the Year award in her first Peacemaking initiative called CAMPus Impact addressed to 2020 graduates that Mixers that included breakout ism in the Diederich College of Communication, was won the inaugural International Town and Gown season with Marquette. featured inspiring messages from a rooms for alumni clubs in different named a Newman Civic Fellow by the Boston-based variety of prominent alumni. “Your cities or regions. Planning is Association Intern Challenge this year. The nonprofit group Campus Compact. The fellowship new stage is the world that awaits underway for a Circles networking challenge highlights and supports an effective, emphasizes personal, professional and civic growth you, the world that needs you,” the initiative to support cohorts student-led community project executed in for students who have demonstrated a capacity for alums proclaimed in individually of new alums in their career collaboration with a local government or nonprofit. leadership and an investment in solving public prob- filmed sections. “And you are not development and advancement The award includes an ITGA donation to CAMPus lems. Byron pursues social justice by encouraging alone: 115,000 Marquette alumni in a tough economy. Impact, which works with Near West Side Partners public discourse through her investigative reporting Inc. to involve students in neighborhood projects for the student newspaper, The Marquette Tribune. and foster strong student-resident relations.

15 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 16 ACADEMICS AND RESEARCH

THE PURSUIT OF EXCELLENCE IN ALL THINGS

A defining part of Marquette’s mission

$1 million grant supports a diverse STEM faculty STATE’S FIRST OCCUPATIONAL THERAPY PH.D. PRO- GRAM OPENS Toward the fiscal year’s end, Marquette’s College of Health Sciences prepared to welcome the inaugural “This grant is very Funded by a three-year, and coordinating meetings with class of Wisconsin’s first clinical doctorate of occupational faculty and department chairs to from the therapy degree program. The 40 students who began this fall will complete a three-year professional program exciting for us. In $1 million grant help align future programming with FORMER CREE CEO IS National Science Foundation focusing on occupational therapy theory, research and practice. Designed to prepare graduates for the ever-ex- their specific challenges. ADVANCE NOW INNOVATOR-IN- joining the ADVANCE ADVANCE program, Marquette panding role of OTs, the program offers interprofessional teaching and learning opportunities with other health research faculty also collaborated RESIDENCE leaders are making progress on an disciplines, as well as on-campus clinical education in the new Neuro Recovery Clinic, the Marquette Physical community, Marquette on the university-wide Assessment initiative to support career success will be a part of the of Climate for Learning, Living and Therapy Clinic, and the Speech and Hearing Clinic. To share a wealth of for STEM scholars from underrepre- Working survey, adding questions “Future occupational therapy practice needs leaders who can create and lead system change, engage in national dialogue for sented backgrounds. knowledge gained as to help gather data from faculty research to support the science of occupation and influence policy development,” says Dr. Lani R. Stockwell, longtime CEO of Cree diversity in STEM.” The project, Moving Beyond Bound- about their work experiences, de- department chair. With just 12 percent of OTs holding doctorates, she says, “Our graduates will be at the aries to Promote Inclusive Faculty partment perceptions and impres- Dr. Jeanne Hossenlopp forefront of the profession.” Inc., Chuck Swoboda, Success, is a partnership between sions of the climate for diversity the Office of Research and Innova- within their individual colleges and Eng ’89, began serving RESEARCHERS LAND R01 GRANTS Having tion and the Office of Institutional university wide. as Marquette’s first Diversity and Inclusion. The depart- received competitive R01 grants from the National The ADVANCE project also ben- ments’ respective vice presidents, Institutes of Health this year, two Marquette innovator-in-residence. efited from this year’s Marquette Dr. Jeanne Hossenlopp and Dr. professors are engaged in research that could lead Forum. Dr. Freeman Hrabowski, His “Innovators on Tap” William Welburn, work alongside an to better health outcomes. president of the University of Mary- interdisciplinary faculty team to lead podcast from Marquette’s land, Baltimore County, discussed Dr. Allison Hyngstrom’s $2.3 million grant supports the project. experiences and lessons learned her research on how ischemic conditioning and Innovation Alley shares NSF ADVANCE programs use inter- from UMBC’s ADVANCE program exercise training in stroke rehabilitation can be success stories from sectional approaches that recognize with the University Leadership used to help patients increase functional gains — how gender, race, ethnicity and Council during his visit to campus including walking speed, leg muscle strength and a variety of industries. other social identities interact to for the forum. respiratory fitness — more rapidly after a stroke. Generous Marquette affect workplace experiences. Mar- “This grant is very exciting for us,” Hyngstrom, chair and professor of physical therapy, quette’s initiative will focus on two Hossenlopp says. “In joining the supporters, Swoboda and pressing challenges in STEM fac- NSF GRANT EXPANDS MPS COMPUTER SCI- and colleagues will conduct patient rehab trials in ADVANCE community, Marquette his wife, Karen, Eng ’90, ulty equity, as revealed by campus ENCE EDUCATION Dr. Dennis Brylow, professor of partnership with Marquette’s Neuro Recovery Clinic. will be a part of the national dia- focus groups and a university-wide computer science in the Klingler College of Arts and logue for diversity in STEM.” A $1.8 million Maximizing Investigators’ Research this past year committed climate study: effective recruitment Sciences, has received a nearly $2 million National Award from NIH is enabling Dr. Serdar Bozdag, The Office of Research and Inno- $1 million to fund of diverse faculty and department Science Foundation collaborative research grant to assistant professor of computer science, to develop climates that create hurdles to vation also launched the Institute promote computer science education among Milwau- leadership development for Women’s Leadership with a an integrative computational model to advance his faculty success. kee Public Schools teachers. $5 million gift from the Thomas J. research on precision medicine. Over five years, within Innovation Alley. Progress on numerous grant Rolfs Family Foundation shortly Brylow and his team are exploring deeper questions Bozdag aims to develop a scalable computational projects in the first year has been before the start of the ADVANCE about how prior computer science exposure can method for analyzing existing biological and clinical strong, Hossenlopp reports. These grant. The IWL will continue to affect students later in their education, why the datasets to predict disease-associated genes and included piloting new faculty re- implement the project when the effectiveness of executed initiatives is so uneven patient-specific drug responses, integrating layers cruiting materials, launching a “Men grant concludes. in different parts of the city, and how to strengthen of already-captured datasets across millions of as Advocates and Allies” group, computer science education in MPS. individuals from different backgrounds.

17 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 18 LEADERSHIP

ACT AS IF EVERYTHING DEPENDED ON YOU; TRUST AS IF EVERYTHING DEPENDED ON GOD.

St. Ignatius of Loyola New provost emphasizes diversity, inclusion

After a nine-month istrator. During a 20-year tenure at California State University, national search and Sacramento, Ah Yun was a pro- MARQUETTE COMMUNITY MOURNS THE LOSS OF NEW LEADERSHIP dozens of candidate fessor of communication studies KEYES DEAN OF BUSINESS ADMINISTRATION JOE DANIELS interviews with multiple and chaired that department; he DEANS was also director of the Center for The Marquette University community faced tragedy in February 2020, as campus stakeholders, Marquette DR. HEIDI BOSTIC Teaching and Learning and asso- named Dr. Kimo Ah Yun its perma- the campus mourned the loss of Dr. Joe Daniels, Keyes Dean of Business Dean of the nent provost and executive vice ciate dean of the College of Arts Administration, who was fatally struck by a vehicle. Klingler College president for academic affairs in and Letters. He co-chaired the of Arts and Sciences December 2019. President’s Committee to Build “As a Marquette community, we struggle for Campus Unity, which planned and DR. SARAH FELDNER Ah Yun, the first person of color executed campuswide conversa- comfort as we each feel the impact of this loss to serve in the provost role, had Dean of the Diederich tions on discrimination, identity in different ways,” President Michael R. Lovell “Diversity isn’t a goal served as acting provost for and privilege. College of Communication approximately 14 months before wrote in a message to campus. “We are a family to be achieved or being named to the permanent As Marquette’s acting provost, and need to support each other the most during position. Previously, Ah Yun had Ah Yun developed task forces to VPs/CHIEFS a box to be checked. help faculty and graduate students times of immense sorrow.” served as dean of Marquette’s IAN GONZALEZ It’s an evolving pursuit improve their lived experiences, Diederich College of Communica- Daniels was a campus fixture for more than Vice President for Finance to make Marquette tion since 2016. increased collaboration with the University Academic Senate 30 years, inspiring students his entire career as President Michael R. Lovell says LAURIE PANELLA more reflective of the around university policies and a mentor and educator who made an indelible Ah Yun “demonstrated tremen- Chief Information Officer procedures, continued to invest in world around us.” dous leadership as acting provost impact on the field of economics as a master cluster hiring for the Race, Ethnic REV. JAMES VOISS, S.J. ... navigating some of Marquette’s Dr. Kimo Ah Yun and Indigenous Studies program, scholar. Ultimately, he helped take Marquette more difficult issues with a calm Vice President for advocated for increased diversity Business to new heights, instrumental in inspiring a new vision for the professionalism and an eye toward Mission and Ministry programming, and oversaw the what is best for our university.” college, which the university has carried forward in his memory. recruitment of a historically diverse Lovell also praised Ah Yun’s com- incoming first-year class. A devout Catholic, brilliant macroeconomist and an enthusiastic college BOARD OF TRUSTEES mitment to Marquette’s Catholic, NEW OFFICERS Jesuit mission and his keen under- While the Marquette community basketball fan, Daniels truly loved Marquette. His students and colleagues standing of how the university’s has made strides in the areas of likewise adored him — hundreds turned out for a campuswide prayer service ROBERT J. ECK, Arts ’80 Beyond Boundaries strategic plan diversity, equity and inclusion, Ah Chair in his honor the day following his death. anchors the university’s response Yun says there is more work to do. TODD ADAMS to industry challenges. “Diversity isn’t a goal to be Daniels’ family established a scholarship in his name to carry forward his Vice Chair Ah Yun is a first-generation college achieved or a box to be checked,” legacy and help future generations of Marquette students realize their student who became an accom- he says. “It’s an evolving pursuit educational dreams. To donate to the Dr. Joe Daniels Memorial Scholarship, plished communications scholar, to make Marquette more reflec- educator, researcher and admin- tive of the world around us.” visit give.marquette.edu/joe-daniels.

19 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 20 PHILANTHROPY AND ECONOMIC ENGAGEMENT

YOU HAVE GIVEN ALL TO ME. TO YOU, LORD, I RETURN IT.

St. Ignatius of Loyola

PATHWAYS TO JESUIT EDUCATION Graduates of Milwaukee’s Marquette University High School now have increased opportunity $7 million committed for service-driven scholarship to continue their Jesuit education at Marquette University, thanks to a new Pathway Program established with a $2.5 million gift from John Stollenwerk, MUHS ’58, Sp ’62, Grad ’66, and his wife, PLEDGE MAKES In its 25th year, Mar- are named as Burke Scholars JoEllen, Sp ’66, Grad ‘72. annually and receive four-year, INVESTMENT IN quette’s undergraduate full-tuition scholarships to With an academic mission closely aligned with Marquette’s, CAREGIVERS Burke Scholars Program Marquette. They participate in MUHS sends more students to the university than does any high school nationwide. The Pathway Program offers received a $7 million commitment program-sponsored extracurricular several individual scholarships, enhanced admissions counseling and the opportunity to take Marquette University To honor those who nursed from its namesake foundation to activities and special academic courses at a significantly reduced cost while in high school. him back from temporary continue the scholarship program programs that focus on the spirit A former member of the university’s and high school’s governing boards, John Stollenwerk described his educational and help fund the Trinity Fellows of Jesuit education and service paralysis after an accident experience as a “discipline of love.” He has said his family wanted to reduce the financial burden for MUHS program, which specifically benefits to others. They must maintain a students who desire future academic opportunities and encourage more students to stay in Milwaukee. and help develop future graduate students. Both programs 3.0 GPA and volunteer at least were started by the late Richard A. 300 hours of meaningful service caregivers, George Karnas Burke, Bus Ad ’56 (left), founder each academic year. The program CENTENNIAL CELEBRATION: MARQUETTE AND GIFTS OPEN DOORS TO TRAIN MORE and his wife, Nina, pledged “We are extremely grate- and leader of Trek Bicycle Corp. has produced 145 alumni who KOHLER CO. This spring marked 100 years of valued NURSES Amid growing nursing shortages in a $1 million estate gift for ful to the Burke Foun- Burke served as a Marquette have given a total of 177,000 partnership between Marquette and Kohler Co. Wisconsin and nationwide, the College of Nursing trustee from 1996 to 2005, hours of community service has received more than $6.3 million to strengthen the Karnas Giroux Endowed dation for helping us to to serve more than 90 Milwau- To commemorate the centennial, nearly 40 students, when he was elected trustee the pipeline of Marquette-trained nurses. faculty and staff visited Kohler headquarters for Scholarship Fund. It will live out our mission and emeritus for life. He dedicated kee-based organizations. “Marquette Day at Dorothy Krawczyk, Nurs ’47, donated $4.7 million for further investing in his life to investing in others, The Trinity Fellows program support students in the and the Burke Scholars and Kohler,” where they to student scholarships through her estate; develops Marquette graduate College of Nursing, the future leaders Trinity Fellows programs students into urban leaders toured the company’s Alice Stecker, Nurs ’59, Grad ’64, contributed of greater Milwaukee encourage service to others with a commitment to social and facilities, learned $1 million toward scholarship support; and the College of Health Sciences as well as academic success. about its products Helene Fuld Health Trust provided a $675,000 and our region.” economic justice. Trinity Fellows and Klingler College of “When we look at our model work in a variety of nonprofit and manufacturing grant to support the college’s direct-entry Arts and Sciences. President Michael R. Lovell, students who serve as women Milwaukee organizations for processes, and nursing program, which accommodates students referring to the late and men for and with others, 18 hours per week during the networked with who hold baccalaureate degrees in other disci- Through their estate gift, Richard A. Burke (above) we look no further than our Burke academic year and 40 hours per Kohler professionals plines and wish to become nurses. the Karnases are also and his Burke Foundation week during the summer. Prior Scholars and our Trinity Fellows,” and alumni. The combined support opens doors for future President Michael R. Lovell says. Peace Corps, Jesuit Volunteer recognized as members of A highlight of the caregivers at a time when a robust student-nurse “We are extremely grateful to the Corps, AmeriCorps or other centennial year pipeline is in high demand. Stecker, in fact, says Marquette’s St. Ignatius Burke Foundation for helping us post-college full-time volunteer celebration was the Redo the Loo: 707 Hub’s Restroom she was motivated to save money for her gift to live out our mission and for service is mandatory for eligibility. Legacy Society. further investing in the future Fellowships include a full-tuition Redesign Challenge, an engaging experience for because of the constant shortage of caregivers leaders of greater Milwaukee scholarship and a monthly stipend student teams and their Kohler mentors to redesign throughout her career. “When I think about what and our region.” for books, health insurance and the restrooms inside the campus innovation space — this might mean for future nurses and future other living expenses. and home of the Social Innovation Initiative and Kohler patients, it fills my heart,” she says. Up to 10 academically talented Wisconsin high school seniors Center for Entrepreneurship.

21 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 22 PHILANTHROPY AND ECONOMIC ENGAGEMENT

FOR THE GREATER GLORY OF GOD

Translation of the phrase, Ad majórem Dei glóriam, the Latin motto of the Society of Jesus

ALUMNI COUPLE’S GIFT ADVANCES OPPORTUNITIES $5 million gift helps first-generation students A $1.5 million gift from alumni couple Jeff and Sarah Joerres, both Arts ’83, is uniquely directed to two critical univer- sity initiatives. As Marquette em- our ability to deliver a transforma- tional education and the need to FUND HELPS SECURE Half will support experiential learning for first-generation barked on a yearlong provide access all came together STUDENTS’ FUTURES minority students, removing financial barriers to high-impact celebration of the 50th in this incredibly generous gift,” AT MARQUETTE experiences such as study abroad programs in 41 countries. Increasing access can help anniversary of its nationally rec- President Michael R. Lovell says. retain and engage these underrepresented students, says Dr. William Welburn, vice president ognized Educational Opportunity “Scholarships are a top priority While the coronavirus pandemic for inclusive excellence. In addition, the Joerres’ gift will help enable first-generation Program for first-generation and of our strategic plan, Beyond upended every Marquette student’s minority students to take advantage of high-quality but often unpaid internships suited to underrepresented students, a Boundaries, and the Werners’ generous alumnus stepped for- plans, some felt the burden more their academic and career goals. commitment will forever benefit ward to support these students. the lives of future students and acutely as they or their family The Joerres’ gift also advances Marquette’s Neuro Recovery Clinic, launched in 2019 as Thomas Werner, Eng ’86, and their families.” the first of its kind in Wisconsin. The clinic serves patients who require complex care for members lost jobs or fell ill. With his wife, Suzanne, committed Tom Werner has served as a life-altering injuries and conditions, including intensive and long-term services not other- $5 million to launch The Thomas the sudden drop in income, many “Tom and Suzanne’s member of the Board of Trustees wise available. It also trains students in the delivery of cutting-edge therapies. and Suzanne Werner Endowed since 2012 and has led Silicon worried about how they would belief in the mission of Scholars Program for First-Gen- Valley-headquartered SunPower cover their tuition. Marquette University, eration Students. Their gift Corp., a leading global solar com- SPECIAL COVID-19 PRESIDENT’S CHALLENGE A special President’s Challenge in May solicited our ability to deliver also supports Ready to Inspire pany, as its chief executive officer Success and Excellence (RISE), Fortunately, the university had a ideas to address community needs that were created or magnified by the COVID-19 pandemic. since June of 2003. a transformational Marquette’s new award-winning “I was very lucky when I grew vehicle in place to help: The Bridge Since 2018 the President’s Challenge has funded pre-orientation program. education and the need up,” Werner says. “For me, a col- innovative proposals from interdisciplinary to the Future Fund, established More than 20 percent of current lege education was expected, and teams of Marquette faculty, students to provide access all during the 2008–09 recession to Marquette students are the first in even a given, but that isn’t true for and staff to address community needs. came together in this their family to attend college, and so many young people. support students with changing For this special initiative, Madison, the university also nearly doubled incredibly generous gift.” “As a Trustee of Marquette Univer- Wisconsin-based American Family its undergraduate student diver- financial situations. With a sity, this was a great opportunity Insurance joined ongoing President’s President Michael R. Lovell sity from 15 percent in 2008 to $100,000 gift to help students to give back and to open wider Challenge partner Johnson Controls 28 percent in 2019. The RISE pro- doors for higher education. We affected by COVID-19, alumni gram provides multicultural and to support solutions that “lead in the are proud that more first-gener- underrepresented students with couple Mary Ellen Stanek, Arts recovery and continued positive social ation and minority students will additional resources, connections and economic impact in our community,” now have the opportunity to make ’78, and Scott Stanek, D.D.S., and a stronger sense of belonging says American Family’s Leana Nakielski, a significant impact on the world on campus weeks before they Arts ’77, Dent ’82, invited alumni, strategic partnerships director. by attending a great institution begin classes. with tremendous leadership and parents and friends to join them Teams competed for $50,000 in grant funding for one year in three areas: mental health and wellness, “Tom and Suzanne’s belief in the a strong mission.” in supporting Bridge to the Future. economic revitalization and health services. Learning communities were launched in each focus area mission of Marquette University, to foster knowledge and ideas. More than 500 donors answered Challenge winners were announced in July and include a study on safer-at-home orders’ effect on the call, ultimately raising $500,000 intimate partner violence, an online toolkit for teachers to assist students from disproportionately for the fund in FY2020. COVID-affected populations, and solutions for public food service distribution to address increased needs.

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 2423 FINANCIALS

Marquette University assets, liabilities, and net assets. Net assets are separated into two classifications: without donor restrictions and with Marquette University is an independent, coeducational, donor restrictions. Additional information about net assets not-for-profit institution of higher learning and research can be found in Note 1(b) of the consolidated financial located in Milwaukee, Wisconsin, formally opened in 1881 statements. and conducted under the auspices of the Society of Jesus. Through its eleven nationally and internationally recognized The statement of financial position, along with related Management’s Discussion and Analysis separate colleges and schools, the University offers a footnote disclosures, has a two-fold purpose. First, the comprehensive range of bachelor’s degree programs, statement is meant to help assess the university’s ability master’s degree programs, doctoral degree programs, and to continue to provide services. Second, the statement post-baccalaureate first professional degree programs. A is meant to provide information about liquidity, financial Marquette education offers students a virtually unlimited flexibility, ability to meet obligations, and potential needs number of paths and destinations and prepares them for for external financing. The objective of management’s discussion and analysis (“MD&A”) the world by asking them to think critically about it. Changes in cash and cash equivalents are detailed in the is to give readers an overview of the financial position and operating statement of cash flows. activities of Marquette University for the year ended June 30, 2020, COVID-19 Pledges receivable consists of unconditional promises with selected comparative information for the year ended June 30, The results of operations for the fiscal year ending June 30, to give and is recorded as contribution revenue, at fair 2019. This discussion should be read in conjunction with the audited 2020 were directly affected by the impacts of the COVID-19 value, in the period the promise is made by a donor. The financial statements and the notes to the financial statements. public health crisis on the University. fair value of the pledge is estimated based on anticipated future cash payments discounted using a risk-adjusted rate The financial impacts on the University’s fiscal 2020 The statements are prepared in accordance with U.S. generally commensurate with the duration of the planned payments. accepted accounting principles (GAAP). The three primary statements operations were approximately $14.0 million, primarily due to a reduction of room and board revenue, as well as other Student repayments of federal program loans resulted in included in this report are the Statements of Financial Position, the lost revenues and additional expenses related to the public a lower student accounts and loans receivable balance. Statements of Activities, and the Statements of Cash Flows. Financial health crisis. To mitigate the adverse financial impacts of Under federal program guidelines, universities are no statement footnotes provide additional explanations for various COVID-19, the University significantly reduced discretionary longer allowed to award new Federal Perkins Loans. portions the financial statements. spending, suspended travel by University personnel, Additional information about student accounts and loans furloughed approximately 250 employees, and accepted receivable can be found in Note 1(f) of the consolidated approximately $3.3 million of emergency relief funds financial statements. from the federal Coronavirus Aid, Relief, and Economic Investments represent the largest university asset. Security Act (the “CARES Act”) which was used to partially Investments consist of long-term cash equivalents, offset institutional losses (the University also received an endowment, trust and other investments. The endowment additional $3.3 million of CARES Act funds that have been fund’s investment objective is to preserve purchasing disbursed to eligible students). In total, these mitigation power, while providing a continuing and stable funding efforts combined with CARES Act funding were able to source to support the overall mission of Marquette offset $14.0 million budgetary shortfall for fiscal 2020. University. To accomplish this objective, the fund seeks to Going forward, the pandemic could continue to adversely generate a total return that will exceed its annual spendable affect the university’s ability to conduct its operations and amount, all expenses associated with managing the fund impact financial results. The Board of Trustees along with and eroding effects of inflation. The fund is managed on a university’s management are monitoring the outbreak total return basis. and potential financial impact and are prepared to take To achieve this investment objective, the fund is allocated measures to protect the health of the campus community among several asset classes with a bias toward equity and and promote the continuity of the university mission. equity-like investments. The fund is diversified both by and within asset classes. Diversification provides reasonable Statement of Financial Position assurance that no single security or class of securities will have a disproportionate impact on the performance of the The statement of financial position provides information total fund. As a result, the risk level associated with the about an organization’s assets, liabilities, and net assets portfolio investment is reduced. The following chart displays at a specific moment in time. The statement reports total the endowment targeted asset allocation:

24 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 2524 Major contributions were received to support scholarships, Fixed Income Statement of Activities Inflation Hedging the St Norbert-MU Pathway, Endowed Professorship in 10% The Statement of Activities is the university’s operating 15% Psychology, Endowed Fellowship in Mental Health, the statement. It reflects financial transactions from the Nursing program, Athletics and future capital construction beginning to the end of the fiscal year which result in International Equity projects. The “Philanthropy” section details some of the increases or decreases in net assets. The statement of 17.5% large contributions received during the fiscal year. activities reflects changes for both types of net assets, without donor restrictions and with donor restrictions. Contribution revenue of $66.3 million reported within the statements of activities is calculated based on GAAP. As The statement of activities, along with the related footnote 30% Flexible Capital is widespread practice, University Advancement reports disclosures, are intended to provide the reader with fundraising according to the guidelines established by information that will evaluate the not-for-profit organization’s 17.5% the Council for Advancement and Support of Education Domestic Equity performance during the fiscal year; assess the university’s (CASE). CASE guidelines represent the philanthropy service efforts and its ability to continue to provide 10% reporting standard for colleges and universities. Under services; and assess how university’s management has CASE guidelines, philanthropic giving totaled $95.3 million Cash (0.0%) Private Equity discharged their stewardship responsibilities and other in fiscal year 2020. aspects of their performance. A normal bridging from GAAP to CASE totals displaying For fiscal year 2020, Marquette University’s operating customary adjustments is provided below: The 5-year Marquette endowment performance is summarized in the table below: income was $53.7 million. Operating results in the consolidated statement of activities reflect all transactions (dollars in thousands) that change net assets, except for activity associated with ENDOWMENT PERFORMANCE SUMMARY endowment investments and certain other nonrecurring Per GAAP $66.3 FISCAL YEAR ENDING transactions. Accrual basis adjustment (0.7) 5-YEAR The fiscal year 2020 operating revenue increase is primarily Priority point gifts 3.9 ANNUALIZED 2020 2019 2018 2017 2016 due to net student tuition and fees and contribution Grants 11.0 Market Value (in millions) $693.7 $698.0 $668.8 $626.2 $550.1 income. Revocable planned gifts 9.7 Endowment 4.9% 0.9% 5.3% 7.9% 11.8% –0.9% Net tuition and fees of $271.1 million represents a $14.5 Conditional Gifts/Other 5.1 Policy Index 4.3% 1.6% 4.2% 7.3% 10.6% –1.6% million increase over the prior year. This increase is primarily Per CASE $95.3 S&P 500 Index 10.7% 7.5% 10.4% 14.4% 17.9% 4.0% attributable to rate increases. MSCI AC World ex USA (Net) 2.3% –4.8% 1.3% 11.1% 20.5% –10.2% Total grant revenue increased $6.5 million over the prior University philanthropic efforts will continue to pursue Barclays Capital Agg. Bond Index 4.3% 8.7% 7.9% –0.4% –0.3% 6.0% year. The increase is primarily due to Coronavirus Aid, support for our students, programs, research and capital Relief, and Economic Security (CARES) Act. Fifty percent priorities. of the funding was used to cover costs associated with Additional information on GAAP reporting of contributions Additional information on endowments and endowment • The tax-exempt WHEFA Series 2019 was issued for significant changes to the delivery of instruction due to the revenue and pledges receivable is provided in Notes 1(e) income can be found in Note 4 of the consolidated financial the purpose of refunding the WHEFA series 2008 B1- coronavirus incurred on or after March 13, 2020. Marquette and 6 of the consolidated financial statements. statements. B3 and supporting the construction cost of the New used this $3.3M to partially cover refunded room and Physician Assistant Studies building. board. These funds were accounted for as grant revenue Auxiliary enterprise revenue of $46.9 million represents a Net property, buildings and equipment were lower as and grant expense. The remaining 50% of the funding $11.4 million or 20% decrease below the prior year. This depreciation exceeded new purchases of property, • The Fixed Rate Taxable Series 2020 was issued was used for the sole and exclusive purpose of providing decrease is primarily attributable to refunding room and buildings and equipment. The University opened a new to provide liquidity during the uncertain COVID-19 emergency financial aid grants to students for their board to students that vacated residence halls midway Physician Assistant Studies building in the Fall of 2019. pandemic, provide option for potential debt future debt expenses related to the disruption of campus operations. through the spring semester following the transition to Additional information about property, buildings and defeasance and support for capital expenditures to Marquette distributed these funds to students through remote learning due to COVID-19. equipment can be found in Note 1(h) of the consolidated maintain existing facilities and for potential construction financial aid based on student need. financial statements. projects. Endowment income used in operations of $30.1 million reflects a $1.7 million increase over the prior year. The $154.9 million increase in notes and bonds payable is Additional details regarding notes and bonds payable due to two debt issuances, partially offset by refunding of can be found in Note 7 of the consolidated financial existing debt and regularly scheduled debt payments. The statements. two new debt issuances that occurred in FY20 were:

26 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 27 The following chart shows total operating revenues by source: The following chart shows total operating expense by service:

Total Operating Revenues Total Operating Expenditures Other income: $31,367 Public service: $5,811 1% Investment and Endowment income: $31,918 6% Sales by educational departments: $8,388 6% Institutional support: $86,305 2% 20% 29% Instruction: $125,933 Auxiliary enterprises: $46,949 9%

56% Net tuition & fees: Auxiliary enterprises: $50,445 11% 13% $271,115 Contributions: $66,301 15% 14% 8% Academic support: $64,497 Student services: $62,937 Government and private grants: $39,101 10% Research and grants: $45,487 Total: $495,139 Total: $441,415

Expenditures were relatively flat compared to the prior fiscal year as investments to further the mission of the university Additional information on expenses is provided in Note 13 Cash and cash equivalents at fiscal year-end total $211.2 were offset by concerted efforts to reduce spending following the onset of COVID-19. Expenditures by function are of the consolidated financial statements. million. Cash equivalents with original maturities of three displayed in the following table. months or less are classified as cash and cash equivalents. Statement of Cash Flows Year over year operating cash increased mainly as a result of cash provided by the issuance of notes and bonds INCREASE/ The statement of cash flows provides information about payable. FY20 FY19 DECREASE cash receipts and cash payments of the university during Net cash provided from operations continues to be Instruction 125.9 124.5 1.4 the fiscal year. This statement also provides insight into positive. Academic support and libraries 64.5 63.9 0.6 university investing and financing activities. Net cash used in investing activity is a result of the Research and grants 45.5 42.5 3.0 The statement of cash flows shows how changes in university investing in the campus master plan through Student services 62.9 66.6 (3.7) balance sheet accounts and income affect cash and cash construction projects related to academic programming. Auxiliary enterprises 50.5 51.5 (1.0) equivalents. It breaks down the analysis into operating, investing and financing activities. The cash flow statement Net cash provided from financing activities was $186.9 Institutional support 86.3 87.4 (1.1) explains the flow of cash in and out of the university. million due primarily to the $202.1 million of notes and Public service 5.8 6.0 (0.2) The statement is intended to provide information on the bonds payable issued during the fiscal year. Approximately Total 441.4 442.4 (1.0) university’s liquidity and solvency. The statement also $47.1 million of cash was used to repay existing notes and provides information for evaluating changes in assets, bonds payable during the fiscal year. Cash flows provided liabilities and equity, while indicating the amount, timing by from financing activities also includes the generous and probability of future cash flows. support of university donors, including contributions for major capital projects of $5.1 million and contributions for endowments of $31.3 million.

28 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 29 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Position June 30, 2020 and 2019 | With Independent Auditors’ Report Thereon JUNE 30, 2020 AND 2019

(Dollars in thousands) 2020 2019 KPMG LLP INDEPENDENT AUDITORS’ REPORT ASSETS Suite 1050 Cash and cash equivalents $211,224 33,204 833 East Michigan Street Pledges receivable, net 59,363 50,435 Milwaukee, WI 53202-5337 Report on the Financial Statements Student accounts and loans receivable, net 44,038 47,485 September 4, 2020 We have audited the accompanying consolidated financial statements of Marquette Investments 711,823 733,108 University, which comprise the consolidated statements of financial position as of Other assets 8,393 10,031 June 30, 2020 and 2019, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to the consolidated financial Property, buildings, and equipment, net 640,969 643,191 statements. TOTAL ASSETS $1,675,810 1,517,454 LIABILITIES AND NET ASSETS Management’s Responsibility for the Financial Statements LIABILITIES: Management is responsible for the preparation and fair presentation of these con- Accounts payable and accrued liabilities $75,036 88,917 solidated financial statements in accordance with U.S. generally accepted accounting Deferred revenue and deposits 46,657 41,471 principles; this includes the design, implementation, and maintenance of internal Refundable federal loan grants 35,742 40,561 control relevant to the preparation and fair presentation of consolidated financial Notes and bonds payable, net 374,925 220,020 statements that are free from material misstatement, whether due to fraud or error. TOTAL LIABILITIES 532,360 390,969

Auditors’ Responsibility NET ASSETS: Without donor restrictions 407,836 416,803 Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards With donor restrictions 735,614 709,682 generally accepted in the United States of America. Those standards require that TOTAL NET ASSETS 1,143,450 1,126,485 we plan and perform the audit to obtain reasonable assurance about whether the TOTAL LIABILITIES AND NET ASSETS $1,675,810 1,517,454 consolidated financial statements are free from material misstatement. See accompanying notes to consolidated financial statements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of signifi- cant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Marquette University as of June 30, 2020 and 2019, and the changes in its net assets and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 3130 Consolidated Statement of Activities Consolidated Statement of Activities YEAR ENDED JUNE 30, 2020 YEAR ENDED JUNE 30, 2019

(Dollars in thousands) (Dollars in thousands) WITHOUT WITH WITHOUT WITH DONOR DONOR DONOR DONOR RESTRICTIONS RESTRICTIONS TOTAL RESTRICTIONS RESTRICTIONS TOTAL OPERATING REVENUES: OPERATING REVENUES: Student tuition and fees, net $271,115 — 271,115 Student tuition and fees, net $256,633 — 256,633 Government and private grants 39,101 — 39,101 Government and private grants 32,583 — 32,583 Contributions 5,106 61,195 66,301 Contributions 6,228 41,484 47,712 Auxiliary enterprises 46,949 — 46,949 Auxiliary enterprises 58,337 — 58,337 Sales by educational departments 8,388 — 8,388 Sales by educational departments 10,294 — 10,294 Investment income 630 1,142 1,772 Investment income 1,305 1,238 2,543 Endowment income used in operations 5,990 24,156 30,146 Endowment income used in operations 6,086 22,314 28,400 Other income 31,367 — 31,367 Other income 36,462 — 36,462 Net assets released from restrictions 35,058 (35,058) — Net assets released from restrictions 35,964 (35,964) — TOTAL OPERATING REVENUES 443,704 51,435 495,139 TOTAL OPERATING REVENUES 443,892 29,072 472,964 OPERATING EXPENSES: OPERATING EXPENSES: Instruction 125,933 — 125,933 Instruction 124,496 — 124,496 Academic support and libraries 64,497 — 64,497 Academic support and libraries 63,885 — 63,885 Research 45,487 — 45,487 Research 42,500 — 42,500 Student services 62,937 — 62,937 Student services 66,564 — 66,564 Auxiliary enterprises 50,445 — 50,445 Auxiliary enterprises 51,500 — 51,500 Institutional support 86,305 — 86,305 Institutional support 87,406 — 87,406 Public services 5,811 — 5,811 Public services 6,048 — 6,048 TOTAL OPERATING EXPENSES 441,415 — 441,415 TOTAL OPERATING EXPENSES 442,399 — 442,399 OPERATING INCOME 2,289 51,435 53,724 OPERATING INCOME 1,493 29,072 30,565 NONOPERATING ACTIVITIES: NONOPERATING ACTIVITIES: Endowment loss in excess of amounts (7,365) (19,599) (26,964) Endowment (loss) gain in excess of amounts (1,113) 6,279 5,166 designated for current operations, net designated for current operations, net Other, net (3,891) (5,904) (9,795) Other, net 14,139 (21,971) (7,832) TOTAL NONOPERATING ACTIVITIES, NET (11,256) (25,503) (36,759) TOTAL NONOPERATING ACTIVITIES, NET 13,026 (15,692) (2,666) CHANGE IN NET ASSETS (8,967) 25,932 16,965 CHANGE IN NET ASSETS 14,519 13,380 27,899 Net assets, beginning of year 416,803 709,682 1,126,485 Net assets, beginning of year 402,284 696,302 1,098,586 Net assets, end of year $407,836 735,614 1,143,450 Net assets, end of year $416,803 709,682 1,126,485

See accompanying notes to consolidated financial statements. See accompanying notes to consolidated financial statements.

32 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 33 Consolidated Statements of Cash Flows YEARS ENDED JUNE 30, 2020 AND 2019

(Dollars in thousands) 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $16,965 27,899 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 41,243 39,433 Notes to Consolidated Financial Statements Discount amortization (1,438) (983) JUNE 30, 2020 AND 2019 | (DOLLARS IN THOUSANDS) Net realized and unrealized appreciation on investments (2,045) (30,427) Bad debt expense 919 1,638 Contributions for major capital projects including gifts in kind (5,278) (5,468) Contributions restricted for long-term endowments (32,598) (20,805) (1) SUMMARY OF SIGNIFICANT The accompanying consolidated expenses during the reporting period financial statements present as well as the disclosure of contingent Endowment income used in operations from net assets to be maintained permanently (236) (241) ACCOUNTING POLICIES information regarding the university’s assets and liabilities. Actual results (Loss) gain on sale of property, buildings, and equipment (1,194) 1,645 (A) ORGANIZATION financial position and activities could differ from those estimates. Marquette University (the university) Changes in assets and liabilities: according to two classes of net is an independent, coeducational, not- (D) CASH AND CASH EQUIVALENTS Student accounts and loans receivable (1,421) 164 assets: without donor restrictions for-profit institution of higher learning Cash equivalents with original and with donor restrictions. Pledges receivable (7,643) (5,916) and research located in Milwaukee, maturities of three months or less Other assets, net 1,629 (1,615) Wisconsin, formally opened in 1881 (i) Without Donor Restrictions are classified as cash and cash equivalents, except those amounts Accounts payables and other liabilities 922 8,768 and conducted under the auspices of Net assets that are not subject held by investment managers, Deferred revenue and deposits 5,186 (305) the Society of Jesus. The university to donor-imposed restrictions. provides education and training which are classified as investments. NET CASH PROVIDED BY OPERATING ACTIVITIES 15,011 13,787 services, primarily for students (ii) With Donor Restrictions The fair value of cash equivalents is CASH FLOWS FROM INVESTING ACTIVITIES: estimated to be the same as book enrolled in undergraduate, graduate, Net assets that are subject to value due to the short maturity of Purchases of property, buildings, and equipment (38,853) (73,721) and professional degree programs donor restrictions that will be met these instruments. Proceeds from sale of property, buildings, and equipment 1,373 27 and performs research, training either by actions of the university Student loans repayments 7,477 7,964 and other services under grants, or the passage of time. Also (E) PLEDGES RECEIVABLE contracts and other agreements with Unconditional promises to give are Student loans issued (3,510) (2,705) included in this category are net sponsoring organizations, including assets subject to donor-imposed recognized initially at fair value as Purchase of investments (229,480) (149,846) both government agencies and private restrictions to be maintained contribution revenue in the period Proceeds from the sale of investments 239,106 151,357 enterprises. permanently by the university, the promise is made by a donor. The NET CASH USED IN INVESTING ACTIVITIES (23,887) (66,924) fair value of the pledge is estimated The consolidated financial statements wherein the donor stipulates that based on anticipated future cash CASH FLOWS FROM FINANCING ACTIVITIES: include Flora Real Properties LLC the corpus of the gift be held in payments discounted using a risk- Contributions received for major capital projects 5,115 5,192 (Flora). Flora is fully controlled by the perpetuity and the income from adjusted rate commensurate with the university through 100% ownership. those assets be made available Proceeds from contributions restricted for long-term endowments 31,305 27,600 duration of the planned payments. In Flora operates commercial real estate for scholarships or program Endowment income used in operations from net assets to be maintained permanently 236 241 subsequent periods, the discount rate activities in the university campus operations. Decrease in refundable federal loan grants (4,819) (421) is unchanged. Pledges receivable are area. (C) USE OF ESTIMATES net of an allowance for uncollectible Issuance of notes and bonds payable 202,143 — The preparation of consolidated (B) BASIS OF PRESENTATION amounts. Allowance for uncollectible Repayment of notes and bonds payable (47,084) (9,535) financial statements in conformity The consolidated financial statements pledges is calculated based upon the with GAAP requires management NET CASH PROVIDED BY FINANCING ACTIVITIES 186,896 23,077 of the university have been prepared university’s past collection experience. to make estimates and assumptions NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 178,020 (30,060) in conformity with U.S. generally The allowance is reassessed and that affect the reported amounts Cash, cash equivalents and restricted cash, beginning of year 33,204 63,264 accepted accounting principles adjusted as necessary. (GAAP). of assets, liabilities, revenues, and Cash, cash equivalents and restricted cash, end of year $211,224 33,204 Supplemental disclosure of cash flow information Cash paid for interest $9,619 9,782 Change in construction payables (958) 1,913 Capital gifts in kind 162 278

See accompanying notes to consolidated financial statements.

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 3534 (F) STUDENT ACCOUNTS AND LOANS RECEIVABLE, NET Construction in progress includes the following as of June 30, 2020 and 2019: At June 30, student accounts and loans receivable consisted of the following: (dollars in thousands) (dollars in thousands) 2020 2019 2020 2019 Animal research center renovations $9,091 — Federal government loan programs $29,258 33,268 Electrical improvements 2,030 — Institutional loan programs 1,485 1,443 Facilities planning and management relocation 1,606 — Student receivables 8,358 7,020 Physician assistant building — 13,679 Grants receivables 4,983 4,939 Johnston Hall renovations — 1,119 Other receivables 3,367 3,852 Other renovation and construction projects 7,773 7,096 SUBTOTAL 47,451 50,522 TOTAL CONSTRUCTION IN PROGRESS $20,500 21,894 LESS ALLOWANCES FOR DOUBT ACCOUNTS (3,413) (3,037) STUDENT ACCOUNTS AND LOANS RECEIVABLE, NET $44,038 47,485

(I) CAPITAL GIFTS TO ACQUIRE OR sections of the changes in net assets (K) STUDENT TUITION AND FEES CONSTRUCT LONG-LIVED ASSETS without donor restrictions in the Student tuition revenue is recognized The university records an allowance exist, the net asset value is used as a donation including, where appropriate, Capital gifts to acquire or construct consolidated statement of activities. in the fiscal year in which the long-lived assets are recorded as a for uncollectible accounts when, practical expedient in estimating fair capitalized interest. Property and (J) REFUNDABLE FEDERAL LOAN academic programs are delivered. in management’s judgment, it is value, based on information provided equipment under capital leases are gift with donor restriction until the GRANTS Scholarships reduce the amount of probable a portion of the receivable or by fund managers or general partners. initially valued and recorded on the related asset is placed in service, The university participates in the revenue recognized. The university loan will not be collected. Allowances The estimated values are reviewed present value of minimum lease at which time the capital gift is Perkins, Health Professionals Student, provided student tuition discounts for doubtful accounts are established and evaluated by the university. Due payments. The university depreciates released from net assets with donor Nursing Student, Nurse Faculty, of $184,362 and $172,282 in 2020 based on prior collections. Balances to the inherent uncertainty of these buildings, building improvements, restrictions to net assets without ARRA-Nurse Faculty, and Loans and 2019, respectively. Students are written off when they are deemed estimates, these values may differ land improvements, equipment, donor restrictions as other non- for Disadvantaged Student federal who withdraw may receive a full to be permanently uncollectible. materially from the values that would library contents, and eBooks over the operating activity and subsequently revolving loan programs. The university or partial refund in accordance with amortized into operations over the (G) INVESTMENTS have been used had a ready market estimated useful lives of the assets holds certain amounts advanced from the university’s refund policy. for these investments existed. (25 to 50, 10 to 20, 10 to 20, 5 to 7, estimated useful life of the acquired or Investments are reported at fair the federal government to facilitate Deferred tuition revenue and deposits 20 and 20 years, respectively) using constructed asset. This amortization, value based on market quotes (H) PROPERTY, BUILDINGS, AND these loan programs. In the event represents payments for summer the straight-line method. Leasehold which amounted to $6,849 in fiscal with unrealized gains and losses EQUIPMENT, NET the university no longer participates, term courses conducted in July and improvements are amortized over the year 2020 and $6,568 in fiscal year thereon included in the consolidated Property, buildings, and equipment the amounts related to the program August along with deposits for the shorter of the expected useful life of 2019, is recorded as a reclassification statements of activities. When a ready are recorded at cost at date of are generally refundable to the fall academic term. between non-operating and operating market for the investments does not acquisition or fair value at date of the asset or term of the related lease. government.

Property, buildings, and equipment include the following at June 30, 2020 and 2019: The following tables depict activities for deferred revenue.

(dollars in thousands) (dollars in thousands) CASH ACCOUNTS 2020 2019 RECEIVED IN RECEIVABLE Land and improvements $61,646 60,336 BALANCE AT REVENUE ADVANCE OF FOR SUMMER BALANCE AT JUNE 30, 2019 RECOGNIZED PERFORMANCE COURSES JUNE 30, 2020 Buildings and improvements 830,504 807,806 $8,575 8,575 9,250 487 9,737 Construction in progress 20,500 21,894

Furniture, fixtures, and equipment 166,319 158,871 (dollars in thousands) Library contents 123,014 122,012 CASH ACCOUNTS RECEIVED IN RECEIVABLE eBooks and other intangibles 22,454 17,882 BALANCE AT REVENUE ADVANCE OF FOR SUMMER BALANCE AT Less accumulated depreciation (583,468) (545,610) JUNE 30, 2018 RECOGNIZED PERFORMANCE COURSES JUNE 30, 2019 PROPERTY, BUILDINGS, AND EQUIPMENT, NET $640,969 643,191 $8,612 8,612 8,146 429 8,575

36 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 37 The balance of deferred tuition all transactions that change net benefits when their years of for the university property and a Contributions Made. This guidance (2) AVAILABILITY OF FINANCIAL revenue at June 30, 2020, will be assets without donor restrictions, service plus age equal 70 with separate policy is also secured for includes specific criteria to consider ASSETS FOR GENERAL recognized as revenue in the year except for activity associated with a minimum age of 55. Qualified fine art of high value and where when determining whether a EXPENDITURES ending June 30, 2021 as services are endowment investments and certain retired employees under the age appraised values are listed. As of contract or agreement should be rendered. other nonrecurring transactions, of 65 are eligible to participate in June 30, 2020, the specific policy accounted for as a contribution or Resources available to the university including adjustments to allowance the university’s healthcare plan. covering highly valued works as an exchange transaction. It also to fund general expenditures, such The university applies the practical for uncollectible contributions, Retirees are expected to pay the full provides for insured coverage of provides a framework for determining as operating expenses, scheduled expedient in Accounting Standards changes due to adopting new cost of their premiums, based on $100,000 aggregate limit (subject whether a contribution is conditional principal payments on debt, and Codification (ASC) 606-10-50-14 accounting guidance, and other the claims experience associated to policy sublimit-including $3,000 or unconditional which will impact internally funded capital costs have and therefore does not disclose gains and losses. In accordance with that defined group of retired for the Joan of Arc Chapel) for any the timing of revenue recognition. seasonal variations related to the information about performance with the university’s endowment employees. The university also pays one loss or any one occurrence and As a result of this ASU, grants timing of tuition payments, receipts obligations that have an origination distribution policy as described in group life insurance premiums for includes some appraised items from are accounted for like conditional of gifts and pledge payments, and and expected duration within the note 4, only the portion of total active or future retired employees the library collections. contributions. The adoption of this transfers from the endowment. fiscal year. investment return distributed under hired prior to February 1, 1982 that (R) RECENT ACCOUNTING ASU did not have a material impact on The university actively manages its (L) AUXILIARY ENTERPRISES this policy to meet operating needs provide for limited death benefits. PRONOUNCEMENTS the university’s consolidated financial resources, utilizing a combination of Auxiliary enterprises include revenues is included in operating revenue. The premiums paid are based on the During 2020, the university adopted statements. short-term and long-term operating and expenses of the university for Operating investment income consists group community rate associated Accounting Standards Update (S) RECLASSIFICATION investment strategies to align cash room and board, parking services, of dividends, interest, and realized with death claims filed for the (ASU) No. 2018-08: Clarifying the Certain amounts in the 2019 financial inflows with anticipated outflows. commercial property rentals and gift gains and losses on unrestricted entire population of employees and Scope and the Accounting Guidance statements have been reclassified to At June 30, 2020, existing financial shops. nonendowed investments. retirees participating in the program. for Contributions Received and conform to the 2020 presentation. assets and liquidity resources available (M) CONTRIBUTIONS (O) INCOME TAXES As of June 30, 2020 and 2019, within one year were as follows: Contributions, including unconditional The university is exempt from federal the university had post-retirement promises to give (pledges), are benefits payable of $4,525 and income tax under Section 501(c)(3) (dollars in thousands) recorded as operating revenue. of the Internal Revenue Code and $4,481, respectively. Gifts, excluding artwork, are Financial assets: Section 71.26(1)(a) of the Wisconsin (Q) ART COLLECTION Cash and cash equivalents $211,224 recognized in the appropriate statutes and is generally not subject The university has various collections category of net assets in the period to federal and state income taxes. of fine arts and rare books in Accounts receivable and prepaid 16,368 received. Contributions are recorded However, the university is subject museums, libraries, and on loan. Pledges payments available for operations 5,617 at their estimated fair value at the to income taxes on any income that The university does not assign or Working capital investments 4 date the gift is received. Contributions is derived from a trade or business record a value to art works and Endowment spending payout 30,146 receivable due beyond one year regularly carried on, and not in other collections received as gifts TOTAL FINANCIAL ASSETS AVAILABLE WITHIN ONE YEAR 263,359 are stated at estimated net present furtherance of the purposes for or purchased with contributions value, net of an allowance, and which it was granted exemption. restricted for that purpose. Valuations Liquidity resources: recorded as net assets with donor for some collections are updated Bank line of credit 50,000 There was no provision for income restrictions until cash payments are periodically, and as such, the total of taxes due on unrelated business TOTAL FINANCIAL ASSETS AND LIQUID RESOURCES AVAILABLE WITHIN ONE YEAR $313,359 received and donor restrictions are all fine arts may vary with appraisals income and there are no uncertain fulfilled. Allowances and revisions and/or auction prices. Accordingly, tax positions considered to be to previous year contributions the values of fine art and other Additionally, the university has $118,538 in board-designated funds functioning as endowment of which $96,361 can be material. based on donor amendments or collections have been excluded from liquidated within one year with Board approval, however, no liquidation is anticipated as of June 30, 2020. clarifications of intent are reflected As of June 30, 2020, the university the consolidated statements of within the consolidated statements has a federal tax credit carryforward financial position. Proceeds, if any, (3) INVESTMENTS of activities as a nonoperating item. of $3,086, which expires between deaccessions or insurance recoveries A summary of the university’s investment return net of expenses is presented below for the years ended June 30, 2020 Contributions with donor-imposed fiscal years 2034 and 2039. are reflected as increases in the conditions are not recognized unless and 2019: (P) POSTRETIREMENT BENEFITS appropriate net asset classes. The it is reasonably expected that the The university provides retired art and other collections are subject conditions can be met. (dollars in thousands) employees access to certain to a requirement that proceeds from 2020 2019 (N) OPERATING INCOME healthcare and life insurance their sales be used to acquire other Operating results in the consolidated benefits. University employees items for the collections. Fine arts Interest and dividends $2,909 5,851 statement of activities reflect become eligible to access these are included in insurance coverage Gain on investments, net 2,045 30,258 RETURN ON INVESTMENTS $4,954 36,109

38 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 39 The fair value of the university’s bank. Unexpended bond proceeds quoted market prices provided by The following table presents the university’s financial instruments at fair value as of June 30, 2020. The categorization financial instruments is determined include cash equivalents and fixed the custodian bank. The custodian of financial instruments within the hierarchy is based on price transparency and does not necessarily correspond to the using the valuation methods and income securities where their fair banks use a variety of pricing sources perceived risk of the instruments. assumptions as set forth below. values are based on observable to determine market valuations. While the university believes that its market quotation prices. The trustee Observable market quoted prices and (dollars in thousands) valuation methods are appropriate bank uses a variety of pricing sources specific pricing services or indexes TOTAL LEVEL 1 LEVEL 2 LEVEL 3 and consistent with those of to determine market valuations of are used to value investments. The June 30, 2020: other market participants, the fixed maturity securities. The specific securities portfolio is highly liquid, ASSETS: use of different methodologies or pricing services or indexes for each generally allowing the portfolio to be Recurring: assumptions to determine the fair sector of the market are based upon priced through pricing services. value of certain financial instruments the provider’s expertise. The fixed Cash and cash equivalents $211,224 211,224 — — Accounting standards establish a could result in a different fair value maturity securities are highly liquid, Investments: fair value hierarchy that prioritizes at the reporting date. allowing the portfolio to be priced the inputs to valuation techniques Money funds and other 19,573 19,573 — — through pricing services. Fair values of cash and cash used to measure fair value. The Federal, state, and local agency securities 694 — 694 — equivalents are based on observable Investments include money hierarchy gives the highest priority Nongovernment bonds and notes 266 — 266 — market quotation prices provided funds, federal, state, local agency, to unadjusted quoted prices in Asset and mortgage-backed securities 318 — 318 — by investment managers and the nongovernment, asset and mortgage- active markets for identical assets Foreign bonds and notes 125 — 125 — custodian bank at the reporting date. backed and foreign fixed income or liabilities (Level 1 measurements) securities, stocks, mutual funds, and the lowest priority to Common and preferred stocks 51,698 51,698 — — Funds held in collateral under the commingled funds, real estate, measurements involving significant Mutual funds—bonds 66,773 66,773 — — securities lending agreement are multistrategy hedge funds and unobservable inputs (Level 3 recorded at fair market value based Mutual funds—equity 101,459 101,459 — — private equity partnership and measurements). The standard on quoted market prices provided by Receivables under securities lending agreement 9,430 — 9,430 — membership interests. Investments describes three levels of inputs that the custodian bank. The custodian Investments measured at net asset value 461,487 — — — are based on valuations provided may be used to measure fair value: banks use a variety of pricing sources by external investment managers TOTAL INVESTMENTS 711,823 239,503 10,833 — to determine market valuations. Level 1: Observable inputs such and the custodian banks. Valuations TOTAL ASSETS MEASURED AT FAIR VALUE ON RECURRING BASIS $923,047 450,727 10,833 — Observable market quoted prices and as quoted prices in active provided by external investment specific pricing services or indexes markets that the university LIABILITIES: managers and the custodian bank are used to value investments. The has the ability to access at Recurring: include observable market quotation securities portfolio is highly liquid, the measurement date. Payables under securities lending agreement $9,512 — 9,512 — prices, observable inputs other than generally allowing the portfolio to quoted prices such as price services Level 2: Inputs other than quoted TOTAL LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS $9,512 — 9,512 — be priced through pricing services. or indexes, estimates, appraisals, prices in active markets such As of June 30, 2020 and 2019, the assumptions and other methods that as quoted prices for similar university had loaned securities with Certain investment companies and partnerships in which the university has invested have imposed restriction as to the are reviewed by management. Real assets or liabilities; quoted a market value of $9,512 and $22,724, frequency at which the university might redeem, in part or whole, its investment. Redemption frequencies can vary estate, multi-strategy hedge funds, prices in markets that are respectively, that were secured by based on several criteria, including the liquidity of an investment company’s underlying investments or initial investment commingled funds and private equity not active; or other inputs collateral with a market value of lockup periods. Fair value measurements of investments in certain entities that calculate net asset value per share (or its partnerships are valued using net that are observable or can be approximately $9,300 and $23,216, equivalent) as of June 30, 2020 are as follows: asset value; however, it is possible corroborated by observable respectively. The collateral received that the redemption rights of certain market data for substantially in connection with the security (dollars in thousands) investments may be restricted by the full term of the assets lending program and the obligation NET ASSETS UNFUNDED REDEMPTION REDEMPTION the funds in the future in accordance or liabilities. FISCAL YEAR ENDED JUNE 30, 2020 VALUE COMMITMENTS FREQUENCY NOTICE PERIOD to return such collateral are reported with the underlying fund agreements. as investments and accounts payable, Level 3: Unobservable inputs where Commingled funds $93,701 — Weekly, Monthly, 10–30 days Changes in market conditions and the respectively, in the consolidated there is little or no market Annually economic environment may impact financial statements. data and requires the Multi-strategy hedge funds 242,275 1,840 Quarterly, 45–90 days the net asset value of the funds and reporting entity to develop Semi-annually, Unexpended bond proceeds are consequently the fair value of the its own assumptions and Annually, invested in various securities based 2 years, 3 years, university’s interests in the funds. includes funds held in trust on expected risk, returns and Liquidating Payables under the securities lending by others. maturities that mirror the anticipated Private equity partnerships 107,435 48,454 Illiquid agreement are included in accounts timing of construction project payment The university’s policy is to reflect Real estate limited partnership and 18,076 20,902 Illiquid payable and accrued liabilities on needs. Fair values of unexpended transfers between levels at the end membership interests the consolidated statements of bond proceeds securities are based of the year in which a change in $461,487 71,196 financial position and are based on on prices provided by the trustee circumstances results in the transfer.

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 4140 The following table presents the university’s financial instruments at fair value as of June 30, 2019. The categorization (4) ENDOWMENT (C) ENDOWMENT SPENDING POLICY total return that will exceed its annual of financial instruments within the hierarchy is based on price transparency and does not necessarily correspond to the The primary objective of the spendable amount, all expenses (A) INTERPRETATION OF RELEVANT perceived risk of the instruments. LAW GOVERNING ENDOWMENTS spending policy is to provide a associated with managing the The State of Wisconsin enacted steady cash flow stream while at the endowment fund, and the eroding (dollars in thousands) the Uniform Prudent Management same time protecting the purchasing effects of inflation. It is the intention TOTAL LEVEL 1 LEVEL 2 LEVEL 3 of Institutional Funds Act (UPMIFA) power of the endowment fund’s that any excess return (interest June 30, 2019: on July 20, 2009. This law provides, principal. Adopting the target rate income, dividends, realized gains, and approach provides the university ASSETS: among other things, expanded unrealized gains), above and beyond with a level-spending plan. Spending the amount approved for expenditure Recurring: spending flexibility by allowing, subject to a standard of prudence, allotments will begin with the flat or distribution, will be reinvested in Cash and cash equivalents $33,204 33,204 — — the university to spend from an amount allocated to each individual the endowment fund. The endowment Investments: endowment fund without regard endowment fund balance as of fund will be managed on a total return Money funds and other 36,083 36,083 — — to the book value of the corpus. June 30, 2004 that may grow each basis, consistent with the applicable year by an inflationary amount standard of conduct set forth in Federal, state, and local agency securities 3,979 — 3,979 — The university classifies as net assets with donor restrictions not to exceed 3%. Spending UPMIFA. Nongovernment bonds and notes 3,322 — 3,322 — allotments will be increased by (a) the original value of gifts donated The endowment fund has a long-term Asset and mortgage-backed securities 426 — 426 — new gift additions to the individual to the permanent endowment, investment horizon with relatively Foreign bonds and notes 738 — 738 — endowment funds receiving (b) the original value of subsequent low liquidity needs. For this reason, spending authority equal to 5% of Common and preferred stocks 50,281 50,281 — — gifts to the permanent endowment, the endowment fund can tolerate the new gift amount. Mutual funds—bonds 37,208 37,208 — — and (c) accumulations to the short- and intermediate-term volatility permanent endowment made in Mutual funds—equity 104,164 104,075 89 — Compliant with UPMIFA, the provided that long-term returns meet accordance with the direction of university will be allowed to prudently or exceed its investment objective. Receivables under securities lending agreement 23,216 — 23,216 — the applicable donor gift instrument. withdraw spendable funds even if Consequently, the endowment fund Investments measured at net asset value 473,691 — — — Also included in net assets with an endowment’s market value is may take advantage of less liquid TOTAL INVESTMENTS 733,108 227,647 31,770 — donor restrictions is accumulated less than its historical book value. investments, such as private equity, TOTAL ASSETS MEASURED AT FAIR VALUE ON RECURRING BASIS $766,312 260,851 31,770 — appreciation on endowment funds Any “return” that is not required to hedge funds, and other partnership LIABILITIES: which are available for expenditure in a meet spending shall be retained in vehicles, which typically offer manner consistent with the standard Recurring: the endowment funds and invested higher risk-adjusted return potential of prudence established by UPMIFA. in accordance with the investment as compensation for forfeiture of Payables under securities lending agreement $23,216 — 23,216 — (B) UNDERWATER ENDOWMENT FUNDS policy statement. liquidity. To ensure adequate liquidity TOTAL LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS $23,216 — 23,216 — From time to time, the value of A risk control mechanism will be for distributions and to facilitate assets associated with a permanently employed that keeps spending within rebalancing, the university will Certain investment companies and partnerships in which the university has invested have imposed restriction as to the restricted fund may fall below the a range of 4–6% of market value in conduct ongoing reviews of total frequency at which the university might redeem, in part or whole, its investment. Redemption frequencies can vary historical cost. Deficiencies of this order for the asset allocation policy to fund liquidity. nature are reported in net assets with based on several criteria, including the liquidity of an investment company’s underlying investments or initial investment work with a minimum target rate of Endowment net assets without donor restrictions. These deficiencies lockup periods. Fair value measurements of investments in certain entities that calculate net asset value per share (or its return of 8% (5% average spending donor restriction are “Investments resulted from unfavorable market equivalent) as of June 30, 2019 are as follows: and 3% inflation). functioning as endowment” that conditions that occurred after the (D) ENDOWMENT INVESTMENT are not permanently restricted by investment of endowed contributions (dollars in thousands) POLICY donors but are designated by the and from appropriations to certain NET ASSETS UNFUNDED REDEMPTION REDEMPTION The endowment fund’s investment university for endowment purposes. FISCAL YEAR ENDED JUNE 30, 2019 VALUE COMMITMENTS FREQUENCY NOTICE PERIOD programs. As of June 30, 2020 and objective is to preserve its purchasing 2019, funds with fair market value of The following represents the Commingled funds $84,528 — Weekly, Monthly 10–30 days power while providing a continuing $96,023 and $31,099, an original gift composition and changes in Multi-strategy hedge funds 271,606 — Quarterly, 45–90 days and stable funding source to support value of $101,100 and $32,358 were endowment net assets for the Semi-annually, the overall mission of the university. underwater by $5,077 and $1,259, year ended June 30, 2020: Annually, To accomplish this objective, the 2 years, 3 years, respectively. Liquidating endowment fund seeks to generate a Private equity partnerships 100,394 56,798 Illiquid Real estate limited partnership and 17,163 26,554 Illiquid membership interests $473,691 83,352

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 4342 (dollars in thousands) recognized for the present value of (6) PLEDGES RECEIVABLE amounts are computed using an the estimated future benefits due to appropriate risk-free rate of return WITHOUT DONOR WITH DONOR Pledges receivable expected to be RESTRICTIONS RESTRICTIONS TOTAL the university over the life of the trust on the date the promise to give is collected within one year are recorded and when the trust is distributed. received. Amortization of the discount Endowment net assets, beginning of year $123,360 582,116 705,476 at net realizable value. Pledges The present value calculation of the is included in contribution revenues. Investment return: receivable expected to be collected trust considers both the discount rate in future years are recorded at the As of June 30, 2020, and 2019, the Investment loss — (78) (78) and, if applicable, the estimated life present value of estimated future contributions receivable is due as Endowment income used for spending policy 5,990 24,156 30,146 expectancy of the trust originator. cash flows. The discounts on those follows: Net realized and unrealized losses (6,757) (17,605) (24,362) TOTAL INVESTMENT RETURN (767) 6,473 5,706 (dollars in thousands) Appropriation of endowment assets for expenditure (5,990) (23,920) (29,910) 2020 2019 Contributions 1,935 32,598 34,533 Less than one year $24,633 18,566 ENDOWMENT NET ASSETS, END OF YEAR $118,538 597,267 715,805 Two to five years 38,768 35,944 Over five years 5,265 5,116 Endowment net assets without donor restriction are “Investments functioning as endowment” that are not permanently SUBTOTAL 68,666 59,626 restricted by donors but are designated by the university for endowment purposes. The following represents the Less unamortized discount (4,060) (4,824) composition and changes in endowment net assets for the year ended June 30, 2019: Allowance for uncollectible accounts (5,243) (4,367)

(dollars in thousands) PLEDGES RECEIVABLE, NET $59,363 50,435 WITHOUT DONOR WITH DONOR RESTRICTIONS RESTRICTIONS TOTAL In addition, the university has received certain conditional promises to give that are in the form of revocable trusts, Endowment net assets, beginning of year $123,638 554,770 678,408 bequests and pledges. As of June 30, 2020 and 2019, the fair value of these conditional promises is approximately Investment return: $177,795 and $155,062, respectively. These amounts can be recognized as revenue in the periods in which the conditions Investment loss — (17) (17) are fulfilled. Endowment income used for spending policy 6,086 22,314 28,400 Net realized and unrealized (losses) gains (365) 6,316 5,951 (7) NOTES AND BONDS PAYABLE, NET TOTAL INVESTMENT RETURN 5,721 28,613 34,334 As of June 30, 2020, and 2019, notes and bonds payable consisted of the following: Appropriation of endowment assets for expenditure (6,087) (22,072) (28,159) Contributions 88 20,805 20,893 (dollars in thousands) ENDOWMENT NET ASSETS, END OF YEAR $123,360 582,116 705,476 2020 2019 Revenue Bonds, Series 2008B1, payable with fixed interest rates ranging from $ — 14,280 2.00% to 5.00%, maturing through 2030 Revenue Bonds, Series 2008B2, payable with fixed interest rates ranging from — 9,030 (5) IRREVOCABLE SPLIT- Assets associated with split- and maintained by separate trustees 2.25% to 5.00%, maturing through 2030 INTEREST AGREEMENTS interest agreements are included not affiliated with the university. Revenue Bonds, Series 2008B3, payable with fixed interest rates ranging from — 16,060 2.00% to 5.00%, maturing through 2030 AND FUNDS HELD IN TRUST in investments on the consolidated The university receives distributions statement of financial position. from the trusts. The fair value of the Revenue Bonds, Series 2011A, payable with fixed interest rates ranging from 2,895 5,680 BY OTHERS trusts was $27,203 and $27,269 at 2.00% to 5.00%, maturing through 2020 A liability for split-interest obligations June 30, 2020 and 2019, respectively, The university’s split-interest is recorded when the agreement Revenue Bonds, Series 2012, payable with fixed interest rates ranging from 73,645 75,045 and are included in investments 2.00% to 5.00%, maturing through 2032 agreements with donors consist is established at the estimated net on the consolidated statement of primarily of charitable gift annuities, present value of future cash flows Revenue Bonds, Series 2016, payable with fixed interest rates ranging from 78,600 80,275 financial position. 4.00% to 5.00%, maturing through 2047 pooled income funds, and charitable using a risk-adjusted discount rate remainder trusts for which the commensurate with the duration of For those agreements where the Revenue Bonds, Series 2019, payable with fixed interest rates ranging from 43,650 — 4.00% to 5.00%, maturing through 2033 university serves as trustee. Assets the estimated payments. university does not serve as trustee, are invested and payments are but is designated as an irrevocable Taxable Fixed Rate Bonds, Series 2020, payable with fixed interest rates ranging 150,000 — The university is the beneficiary of made to beneficiaries in accordance beneficiary of the trust, restricted from 1.00% to 4.00%, maturing through 2050 trusts that, in accordance with the with the respective agreements. funds held in trust and revenue are Other long-term payables with variable interest rate, maturing through 2024 1,067 — decedent’s instructions, are managed SUBTOTAL 349,857 200,370 Unamortized premiums, discount and issuance costs 25,068 19,650 NOTES AND BONDS PAYABLE, NET $374,925 220,020

44 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 45 Notes are issued under the Master Indenture and are equally and ratably secured by any lien created under the Master (9) RETIREMENT PLAN annual wages of participants, up to retired employees’ health, dental Indenture. defined limits. In addition, voluntary and vision costs. Under the plans, All eligible full-time and part-time contributions by participants may be the university’s losses are limited, The notes and bonds payable are subject to various covenants. Management confirms the university is in compliance personnel who meet the waiting made subject to Internal Revenue through the use of excess loss with all covenants as of and for the years ended June 30, 2020 and 2019. period criteria, may elect to participate Service limitations. Payments for insurance, to $350 per claim. Claims in a defined contribution individual Maturities of notes and bonds payable based on scheduled repayments at June 30, 2020 are as follows: contributions to this plan totaled paid under the plans for fiscal years retirement plan. Under the provisions $11,675 and $11,522 in fiscal years 2020 and 2019 totaled $26,065 and of the plan in order to receive the (dollars in thousands) 2020 and 2019, respectively. $27,766, respectively. The university university’s matching contribution, Fiscal year 2021 $9,006 has also contracted with third participants are required to contribute Fiscal year 2022 9,473 party administrators to provide 5% of their annual wages to the (10) SELF-FUNDED HEALTH, administrative services for the plans. Fiscal year 2023 10,054 plan. The university has neither DENTAL AND VISION BENEFIT Accrued liabilities include an estimate Fiscal year 2024 13,509 administrative responsibilities nor PLANS of the university’s liability for claims any financial liabilities under this Fiscal year 2025 14,040 incurred but not paid through June 30, plan except to make contributions, The university has self-funded benefit Thereafter 293,775 2020 and 2019. currently limited to 8% of the plans covering all active and certain TOTAL $349,857

As of June 30, 2020, the university has two secured letters of credit with banks under which it may borrow up to $3,101. (11) NET ASSETS There were no borrowings outstanding under these letters of credit as of June 30, 2020 and 2019. Net assets consist of the following as of June 30, 2020 and 2019: As of June 30, 2020, the university has a $50,000 line of credit with a bank. There were no borrowings outstanding under this line of credit as of June 30, 2020 and 2019. (dollars in thousands) 2020 2019 (8) RESTRICTED CASH AND INVESTMENTS Without donor restrictions: The composition of assets restricted to investment in land, buildings and equipment as of June 30, 2020 and 2019 is Board designated endowments $118,538 123,360 shown below. Other net assets without donor restrictions 289,298 293,443 TOTAL WITHOUT DONOR RESTRICTIONS 407,836 416,803 (dollars in thousands) With donor restrictions: 2020 2019 Amounts with time and purpose restrictions: Restricted cash $10,067 6,030 Academic support, instruction and student services 138,890 137,511 Contributions receivable 18,656 11,209 Pledges receivable, net 27,900 22,435 Investments 4 1,000 TOTAL ASSETS RESTRICTED FOR INVESTMENT IN LAND, BUILDING AND EQUIPMENT $28,727 18,239 Scholarships 58,836 71,498 Life income and annuity funds 4,472 5,148 Physical assets 6,848 8,595 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated TOTAL NET ASSETS WITH TIME AND PURPOSE RESTRICTIONS 236,946 245,187 statement of financial position that sum to the total of same amounts shown in the consolidated statement of cash flows. Amount with permanent restrictions: (dollars in thousands) Academic support, instruction and student services $183,582 173,735 2020 2019 Pledges receivable, net 26,807 24,002 Cash and cash equivalents $201,157 27,174 Scholarships 285,990 262,988 Restricted cash included in assets restricted to investment in land, 10,067 6,030 Life income and annuity funds 2,289 3,770 buildings and equipment TOTAL NET ASSETS WITH PERMANENT RESTRICTIONS 498,668 464,495 TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH SHOWN $211,224 33,204 IN THE STATEMENT OF CASH FLOWS TOTAL WITH DONOR RESTRICTIONS 735,614 709,682 TOTAL NET ASSETS $1,143,450 1,126,485

Assets restricted to investment in land, buildings and equipment include restricted cash equivalents received with a donor- imposed restriction that limits the use of that cash to long-term purposes.

MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 4746 (12) COMMITMENTS AND CONTINGENCIES (dollars in thousands) The university is involved in various litigation arising in the normal course of operations. On the basis of information 2019 presently available and the advice of legal counsel, management is of the opinion that any liability, to the extent not SUPPLIES, provided for through reserves or otherwise, for pending litigation is not expected to be material in relation to the REPAIRS, OPERATIONS UTILITIES AND university’s financial position or activities. COMPENSATION AND OTHER INTEREST DEPRECIATION MAINTENANCE TOTAL As of June 30, 2020, the university has outstanding commitments for the following construction projects: Instruction $98,581 11,029 2,023 — 12,863 124,496 Academic support and libraries 38,560 12,218 334 — 12,773 63,885 (dollars in thousands) Research 25,204 15,792 — 467 1,037 42,500 Animal research center renovations $881 Student services 33,029 24,822 440 — 8,273 66,564 Auxiliary enterprises 5,428 21,006 3,184 — 21,882 51,500 The university leases athletic and other facilities and equipment under noncancelable arrangements that are accounted Institutional support 57,724 20,590 1,198 246 7,648 87,406 for as operating leases. Total future commitments under these leases as of June 30, 2020 are as follows: Public services 4,878 1,059 4 — 107 6,048

(dollars in thousands) Operations and maintenance 9,585 15,889 389 38,720 (64,583) — FY21 $1,528 TOTAL OPERATING EXPENSES $272,989 122,405 7,572 39,433 — 442,399 FY22 1,301 FY23 1,338 FY24 1,275 (14) RESEARCH AND GRANT COSTS FY25 1,313 The university receives grant and contract revenue from various government agencies and private sources for the support Thereafter 12,030 of research, training, and other sponsored programs. Revenues associated with the direct costs of these programs are TOTAL FUTURE COMMITMENTS $18,785 recognized as the related costs are incurred. Indirect cost reimbursements from federal agencies are based on negotiated predetermined rates. Research and grant costs reported for fiscal years 2020 and 2019 comprise of the following:

(dollars in thousands) (13) EXPENSES 2020 2019 The university’s primary programs are instruction, research, and public service. Academic support and libraries, student Sponsored research $32,258 32,159 services, and auxiliary enterprises are considered integral to the delivery of these programs. Athletics expenses are Teaching and training 5,450 6,162 included in student services. Costs related to the operation and maintenance of physical plant, including depreciation of Development and others 7,779 4,179 plant assets, are allocated to operating programs and supporting activities based upon square footage. Interest expense TOTAL RESEARCH AND GRANTS $45,487 42,500 on external debt is allocated to the activities that have most directly benefited from the debt proceeds. Natural expenses allocated by function for the years ended June 30, 2020 and 2019 are as follows:

(dollars in thousands) (15) SUBSEQUENT EVENTS 2020 On March 11, 2020, the World Health Organization declared the novel coronavirus (COVID-19) outbreak a public health SUPPLIES, REPAIRS, OPERATIONS emergency. The pandemic could adversely affect the university’s ability to conduct its operations and impact financial UTILITIES AND results. The Board of Trustees and the university’s management are monitoring the outbreak and potential financial impact COMPENSATION AND OTHER INTEREST DEPRECIATION MAINTENANCE TOTAL and are prepared to take measures to protect the health of the campus community and promote the continuity of the Instruction $100,117 9,602 2,006 — 14,208 125,933 university mission. Academic support and libraries 39,649 11,012 321 — 13,515 64,497 Other than disclosed in the previous paragraph, subsequent events have been evaluated through September 4, 2020 Research 25,828 17,848 — 608 1,203 45,487 which is the date the consolidated financial statements were available to be issued. No other subsequent events were Student services 32,038 21,553 333 — 9,013 62,937 identified requiring recording or disclosure in the consolidated financial statements or related notes to the consolidated financial statements. Auxiliary enterprises 5,322 18,334 3,598 — 23,191 50,445 Institutional support 56,675 20,046 1,979 299 7,306 86,305 Public services 4,772 920 3 — 116 5,811 Operations and maintenance 9,738 18,220 258 40,336 (68,552) — TOTAL OPERATING EXPENSES $274,139 117,535 8,498 41,243 — 441,415

48 MARQUETTE UNIVERSITY ANNUAL REPORT FY2020 49 UNIVERSITY OFFICIALS

BOARD OF TRUSTEES UNIVERSITY LEADERSHIP

Todd A. Adams, Vice Chair; Kelly McShane, Arts ’68, EMERITI TRUSTEES Mary Ellen Stanek, Arts ’78 EXECUTIVE Tim McMahon, Timothy Hanley, Bus Ad ’78, President and Chief Executive Retired School Psychologist, LEADERSHIP Vice President, College of Business John A. Becker, Bus Ad ’63, John J. Stollenwerk, Sp ’62, Officer, Rexnord Corporation Special Education District of University Advancement Administration (Acting) Grad ’65 Grad ’66 Dr. Michael R. Lovell, Lake County Joanna M. Bauza, Bus Ad ’97, President Dr. Gary Meyer, Dr. William A. Henk, John F. Bergstrom, Bus Ad ’67 Charles M. Swoboda, Eng ’89 Senior Vice Provost, President, The Cervantes Group Micky S. Minhas, Eng ’89, Dr. Kimo Ah Yun, College of Education Senior Vice President, Marconi Natalie A. Black, Law ’78 Cherryl T. Thomas, Arts ’68 Faculty Affairs Tim M. Bergstrom, Bus Ad ’99, Provost and Executive Joseph D. Kearney, President and Chief Operating Rev. Thomas W. Neitzke, S.J., John F. Ferraro, Bus Ad ’77 Rev. L. John Topel, S.J., Arts ’73 Vice President for Academic Dave Murphy, Law School Officer, Bergstrom Automotive Dean, Arrupe College of Affairs and Corporate Vice President, Marketing Richard J. Fotsch, Eng ’77, Rhona Vogel, Bus Ad ’76 Dr. Janet Wessel Krejci, Loyola University Chicago Vice President and Communication Rick T. Dillon, Bus Ad ’93, Grad ’84 College of Nursing James M. Weiss, Arts ‘68 Executive Vice President and Janis M. Orlowski, M.D., Joel Pogodzinski, Bus Ad ’94, Rev. Gregory O’Meara, S.J., Rev. James G. Gartland, S.J. Dr. William K. Lobb, Chief Financial Officer, Eng ’78, Chief Health Care Rev. Robert A. Wild, S.J. Senior Vice President, Rector, Marquette University School of Dentistry Enerpac Tool Group Officer, Association of Rev. Michael J. Graham, S.J. Chief Operating Officer Jesuit Community, and Anne A. Zizzo, Jour ’87 American Medical Colleges and Corporate Treasurer Dr. Kristina M. Ropella, Eng ’85, Robert J. Eck, Arts ’80, Chair; Rev. James E. Grummer, S.J. Associate Professor of Law Retired Chief Executive Officer, Rev. Michael Rozier, S.J., Opus College of Engineering Mary E. Henke Claudia Paetsch, Anixter International Inc. Assistant Professor of Health SENIOR Vice President, Janice S. Welburn, Management and Policy, Hon. Janine P. Geske, Darren R. Jackson, Bus Ad ’86 LEADERSHIP Human Resources University Libraries Saint Louis University Law ’75, Retired Professor James F. Janz, Bus Ad ’62, Rana Altenburg, Arts ’88, Laurie Panella, Bus Ad ’87, Dr. Douglas W. Woods, of Law and Retired Justice Amy Ford Souders, Arts ’92, Law ’64 Vice President, Public Affairs Chief Information Officer Vice Provost for Graduate of the Wisconsin Supreme Court Principal and Director, Cornerstone and Professional Studies; Government Affairs, LLC Jeffrey A. Joerres, Bus Ad ’83 Dr. John Baworowsky, Bill Scholl, Jon D. Hammes, Managing Dean, Graduate School Vice President, Vice President and Partner, Hammes Company Owen J. Sullivan, Arts ’79, James H. Keyes, Bus Ad ’62 Enrollment Management Director of Athletics Chief Operating Officer, Nancy Hernandez, Grad ’02, Rev. Timothy R. Lannon, S.J. SENATE NCR Corporation Dr. Xavier Cole, Lora Strigens, President, Hispanic Collaborative Rev. Gregory F. Lucey, S.J. Vice President, Student Affairs Vice President, Planning Dr. Sumana Chattopadhyay, Christopher J. Swift, Bus Ad ’83, Rev. Thomas A. Lawler, S.J., Chair, Chairman of the Board of Directors John P. Lynch, Arts ’64 Dr. Maura Donovan, and Facilities Management Assistant Director, University Academic Senate and Chief Executive Officer, Vice President, Jesuit Retreat House John P. Madden, Bus Ad ’56 Dr. John Su, The Hartford Economic Engagement Vice Provost, Academic Affairs Dr. Allison Abbott, Patrick S. Lawton, Bus Ad ’78, Dr. Arnold L. Mitchem, Grad ’81 Vice Chair, Peggy Troy, Nurs ’74, Steven W. Frieder, Arts ’95, Grad ’80, Managing Director, Rev. James Voiss, S.J., University Academic Senate President and Chief Executive Rev. Joseph M. O’Keefe, S.J. Senior Advisor to the President Fixed Income Capital Markets Vice President, Officer, Children’s Wisconsin Cliona Draper, Group, Robert W. Baird & Co. James D. O’Rourke, Bus Ad ’87 and Corporate Secretary Mission and Ministry Joseph A. Walicki, Retired Chair, Rev. Brian F. Linnane, S.J., Rev. Ladislas M. Orsy, S.J. Ian Gonzalez, Bus Ad ’02 Dr. William Welburn, Chief Executive Officer and University Staff Senate President, Loyola University Vice President for Finance and Vice President, Vice Chairman, Clarios Ulice Payne, Jr., Bus Ad ’78, Corporate Assistant Treasurer Inclusive Excellence Carol Trecek, Maryland Law ’82 Thomas H. Werner, Eng ’86, Vice Chair, Dr. Michael R. Lovell, Dr. Jeanne Hossenlopp, Chief Executive Officer and Kristine A. Rappé University Staff Senate President, Marquette University Vice President, DEANS Chairman of the Board, Joseph J. Rauenhorst, Arts ’78 Research and Innovation Vincent P. Lyles, System Vice SunPower Corporation Dr. Heidi Bostic, President of Community Relations, Glenn A. Rivers, Arts ’85 Edith Hudson, Helen Way Klingler Chris Woleske, Law ’94, Advocate Aurora Health Care Chief, Marquette University College of Arts and Sciences President and Chief Executive James A. Runde, Eng ’69 Police Department Raymond J. Manista, Arts ’87, Officer, Bellin Health Dr. William E. Cullinan, PT ’81, Louis J. Rutigliano, Eng ’60, Law ’90, Executive Vice President, Jeff Kipfmueller, Law ’93, College of Health Sciences Hon. James A. Wynn, Jr., Grad ’65 Chief Legal Officer, Chief Acting Vice President Law ’79, Judge, U.S. Court of Dr. Sarah Feldner, Compliance Officer and Secretary, Hon. W. Greg Ryberg, Arts ‘68 and General Counsel Appeals for the Fourth Circuit J. William and Mary Diederich Northwestern Mutual Wayne R. Sanders, Grad ’72 Rev. Michael A. Zampelli, S.J., College of Communication Rev. Patrick McGrath, S.J., Associate Professor of Theatre, Mary Ladish Selander President, Loyola Academy Fordham University

Information current as of November 2020

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