MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 MARQUETTE UNIVERSITY This page has been intentionally left blank ANNUAL REPORT FY2019
BE THE DIFFERENCE.
It’s not just a tagline — it’s what Marquette University asks of its community. It’s what our students, faculty and staff aspire to do every day.
We also ask them to be bold. Be visionary. Be fearless. Be themselves.
These are demanding requests, but we’ve given them a map. Grounded in our Catholic, Jesuit mission, vision and values, and guided by our visionary strategic plan, Beyond Boundaries, the entire university community has been called on to think differently and act differently so that we may truly Be The Difference.
To do this successfully requires responsible fiscal stewardship through a culture of investment and innovative revenue growth.
This financial report provides not only a snapshot in time of Marquette’s financial health, but also a glimpse forward — how the university invests in itself today is the foundation for how it will Be The Difference in the future. CONTENTS UNIVERSITY FACTS
COLLEGES AND SCHOOLS Helen Way Klingler College of Arts and Sciences College of Business Administration J. William and Mary Diederich College of Communication College of Education Opus College of Engineering College of Health Sciences College of Nursing School of Dentistry Graduate School Marquette University is a Catholic, Jesuit university Graduate School of Management located near the heart of downtown Milwaukee, Law School Wisconsin, that offers a comprehensive range of STUDENTS 11,605 total enrollment 03 UNIVERSITY FACTS majors in 11 nationally and internationally recognized 8,435 undergraduate 04 FROM MARQUETTE’S LEADERSHIP colleges and schools. 3,170 graduate and professional 08 MISSION A Marquette education offers students a virtually ACADEMICS 14 STUDENTS unlimited number of paths and destinations, and Undergraduate programs: 80 majors and 78 minors and 20 ACADEMICS prepares them for the world by asking them to think pre-professional programs in dentistry, law and medicine 26 RESEARCH AND INNOVATION critically about it. Postgraduate programs: 32 ATHLETICS 66 doctoral and master’s Along the way, we ask one thing of every student: degree programs, 18 graduate 38 OUR PEOPLE certificate programs, and Be The Difference. professional degrees in 44 PARTNERSHIPS dentistry and law
50 FINANCES, OPERATIONS AND FACULTY AND STAFF ADMINISTRATION 1,246 faculty and 56 PHILANTHROPY academic positions 1,680 exempt and 62 FINANCIALS non-exempt staff 90 UNIVERSITY OFFICIALS ATHLETICS 16 NCAA Division I athletics teams Competes in the BIG EAST Conference
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A MESSAGE FROM Dr. Michael R. Lovell, President
Few responsibilities can be as invigorating — and at the times as overwhelming — as staying true to a tradition that dates back hundreds and hundreds of years. Marquette University has existed for 138 years
and our greater organization can trace a history back more than 450 Dr. Michael R. Lovell years, when Ignatius of Loyola and his colleagues founded the first of President several Jesuit institutions in Sicily. This is the challenge that Catholic, Marquette University Jesuit universities accept when they carry on their mission of producing men and women who live their lives in service to others. Marquette will always Specifically at Marquette, we are embracing the imperative to serve be committed to an others by going beyond classroom education and sharing with students emphasis on the liberal the knowledge and tools they need to improve the communities in which they live. As a result, we are constantly looking for new and innovative arts and humanities in ways to help address some of Milwaukee’s most pressing challenges and its teaching, a focus uniquely connect our talents and resources to benefit our community. on cura personalis You’ll see great progress in this annual report. We’re expanding E-Lead, and magis, a mission unlearning racism and rallying around the first-ever winner of the of service to and with President’s Challenge award. We’re also looking to a future of online others, and a desire to academic programs and better engaging with our corporate community. transform the broader All this progress we make because of our outstanding Marquette community — not just community. Faculty, staff and students — it’s also our alumni, community the acres within our partners and corporate friends. And as our mission states: “All this we campus boundaries. pursue for the greater glory of God and the common benefit of the human community.”
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A MESSAGE FROM Joel Pogodzinski, Senior Vice President and Chief Operating Officer
To be successful, a modern university must be nimble. We need to adapt to new ways of teaching and delivering transformative learning Joel Pogodzinski experiences as our landscape — and the needs of our students — shift. Senior Vice President and We must be equally agile to ensure that the institution has a clear vision Chief Operating Officer and strategy and is properly resourced to deliver on its promise. In the Jesuit tradition, these focuses are known as cura personalis There is much (“care for the person”) and cura apostolica (“care for the enterprise”). the Marquette Though they may at times seem in opposition to one another, these are not competing forces — rather, joined together they make a Jesuit community should university like Marquette distinct. be proud of and In this, our FY2019 Annual Report, you will see clear examples of how excited about. This Marquette carefully balances our centuries’ old mission and tradition momentum marks with the realities of providing a higher education to an increasingly one of the most diverse student body amid an ever-shifting and challenging marketplace. pivotal times for You will read about alumnus Barry Cosgrove, who grew up “poorer than the university. poor,” only to give back to his alma mater with a generous gift to fund scholarships for first-generation students. You will be inspired by Malaina Moore, a remarkable student whose own experiences dealing with racial bigotry motivated her award-winning play, White Privilege. And you’ll learn about how Marquette’s commitments to community engagement and corporate engagement go hand-in-glove. Indeed, whether building a culture of philanthropy or fostering new partnerships on and off campus, we at Marquette University take great care to be responsive and innovative in our approach, while maintaining and promoting our Catholic, Jesuit identity. It is our great privilege to do all of this so that our entire university community — students, faculty, staff and alumni — can truly Be The Difference.
6 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 7 MISSION
CATHOLIC CONNECTIONS Milwaukee’s first archbishop, John Martin Henni, FOR helped establish Marquette as a Catholic, Jesuit university in 1881. Paying homage to the intertwined THE history of the city, Marquette and its Catholic GREATER community, Marquette President Michael R. Lovell GLORY gave the opening remarks at the archdiocese’s 175th OF GOD anniversary event in May 2019. President Lovell St. Ignatius of Loyola, founder of the Society of Jesus spoke of Archbishop Henni’s influence on the city, JESUIT SCHOOLS: Jesuit causes and the Marquette mission, as well as 27 STRONG Since 1548, Jesuit higher Catholicism’s important role in transforming education has remained committed to academic Milwaukee, past, present and future. excellence, service, leadership and caring for the whole person. Nearly 140 years later, Marquette remains an integral Marquette is one of 27 schools that compose the Association part of the city’s Catholic community. In a shared of Jesuit Colleges and Universities. Member mission with Milwaukee’s archdiocese, we are called institutions are committed to self-evaluation and peer to provide transformative higher education to our review to affirm the mission of Catholic, Jesuit education, and collaborate on initiatives students, and to serve the city and its residents for to support best practices, advocate at the national level, generations to come. and advance international education and global citizenship.
Milwaukee Archbishop Jerome Listecki and Marquette President Michael R. Lovell at the archdiocese’s 175th anniversary celebration.
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“Small experiment” in peacemaking becomes a national model
The Center for knowledge and research to address Peacemaking at social realities in communities … all of our projects involve nonviolence, Marquette University research from students and serving started in 2008 as the vulnerable.” “a small experiment In addition to bringing the Peaceworks with a 1.5-person staff,” program to more than 500 Milwaukee says Director Patrick public and Catholic school students and studying nonviolence in other Sally and Dr. Terrence Rynne Kennelly. Today, it’s one at the 2019 James W. Foley countries, the center is part of Freedom Awards ceremony. of the largest research Near West Side Partners, a centers on campus, nonprofit comprising nearby private corporations. The organizations HUMANITARIAN with about one in five work together to revitalize the OF THE YEAR undergraduate students neighborhoods in which they are In April 2019, participating in its the James W. Foley Foundation located as safe, thriving business and honored Dr. Terrence Rynne with initiatives each year. residential areas. One NWSP project, the 2019 Humanitarian of the Year “Promoting Assets, Reducing Crime,” award for his work in conflict Founded by Marquette theology resolution and peacemaking. In instructor Dr. Terrence Rynne and launched in 2015; crime has since addition to making the initial gift to informed by the Jesuit mission been reduced by 25 percent and establish Marquette’s Center for of reconciliation and working for 26 new businesses have opened, Peacemaking, Rynne and his wife, offering 100 new full-time jobs. Sally, have together founded a peace, the center explores the namesake foundation dedicated to power of nonviolence by fostering A yearlong campaign celebrating peace and the empowerment research and action to promote of women. Rynne also helped pen the center’s 10th anniversary and the New Year’s Day 2019 peace social justice, human dignity and promoting its impact concluded message delivered by Pope Francis. peace in partnership with the in May 2019 and yielded some broader community. significant wins. In conjunction Kennelly points out that Marquette with the NWSP, the center secured is the only Catholic school in the a $1.3 million government grant to country with a major and a minor in transform public housing in the area peace studies, as well as an academic around Marquette. The campaign center focused on nonviolence. also helped grow the center’s “It’s one of the fastest-growing endowment to nearly $2 million this interdisciplinary majors and minors,” fiscal year. he says. “The center uses student The Center for Peacemaking offers week-long and semester-long travel programs for students to learn about and contribute to international peacemaking projects. Students on the center’s study abroad program in northeast India participate in a Jesuit peacemaking project that educates tea workers on their legal rights. 10 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 11 MISSION
Of humble beginnings, alumnus pays it forward New sacred space honors the Blessed Mother “Poor kid” Barry Cosgrove endows scholarship for first-generation students
A self-described “poorer than poor” The Marion Krug Cosgrove Endowed A May 1, 2019, dedication ceremony brought together students, faculty, kid from suburban Boston, Barry Scholarship is named in memory of staff, community members and Milwaukee Archbishop Jerome Listecki Cosgrove, Jour ’79, has achieved Cosgrove’s mother, the most to honor, welcome and bless Marquette’s new statue of the Virgin Mary. the kind of career success that in influential person in his life “because Visitors can find her sheltered in a new, free-standing grotto near the St. 2019 earned him an All-University of her decency, hard work, resilience, Joan of Arc Chapel that offers space for prayerful contemplation. Funded Alumni Award for Professional reliability and loyalty,” he says. by generous Marquette benefactors, the grotto was inspired by President Achievement. Though he worked Cosgrove, a founder of DaVita dialysis Michael R. Lovell’s capstone project in the Ignatian Colleagues Program, hard and was savvy about seizing centers and current president, CEO which cataloged sacred spaces on campus. opportunities, Cosgrove credits and chairman of Blackmore Partners, much of his upward trajectory to says the EOP program — which, at 50 “Those who most “the generosity of others.” years strong, was one of the nation’s The help he received — including from first — helped him develop both often get caught Marquette’s Educational Opportunity leadership skills and empathy. While in the struggle of Program, which provides mentoring visiting campus to accept his alumni and support for low-income, first- award, he recently drew additional higher education generation and minority students — inspiration from a banner adorning a inspired Cosgrove’s 2019 gift of campus building; it reads: “The Guts to costs are the same Marquette benefactor Geraldine “Nana” $1 million, which he and his wife, Try, the Heart to Care and the Resolve Fotsch seeing for the first time the Blessed Ingrid, directed toward scholarship to Be The Difference.” He remains Virgin Mary statue in the university’s new students who most Marian Grotto. Fotsch and her family donated support for first-generation students connected to Marquette as a founding to the project. need a fair chance in the College of Business member of the university’s new at the advantages Administration, as well as those President’s Advisory Council. of a Marquette majoring in journalism. education.”
Barry Cosgrove, Jour ’79
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BUILDING LEADERS
In January 2019, President Michael R. Lovell, THE Opus Dean of Engineering Kris Ropella and alumnus PURSUIT Chuck Swoboda, Eng ’89, invited regional leaders in OF the engineering industry to envision how Marquette’s EXCELLENCE burgeoning Innovation Alley might create the most IN ALL value for business and academia. The takeaway: THINGS develop the next generation of innovation leaders. A defining part of Marquette’s mission The Opus College of Engineering’s Engineers in the Lead program, or E-Lead, was already nationally SWOBODAS MAKE A SLAM-DUNK GIFT recognized and had garnered awards as a leadership The Swobodas, especially Chuck, are nearly unparalleled in development program for 20 engineering students their zeal for Marquette men’s basketball. As undergraduates, each year. Chuck, a trustee emeritus, along with his Karen and Chuck were both on the pep squad and Chuck had wife, Karen, Eng ’90, gave a $1 million gift to a super-fan alter ego known as the “Bleacher Creature.” immediately double the capacity of the program Simultaneously with their Innovation Alley gift, the couple and add 20 non-engineering majors to each incoming donated $1.5 million to support this iconic athletics program’s cohort. Says Chuck, “It is people who provide the continued growth. critical spark that drives innovative thinking.”
A co-op student in the Opus College of Engineering working at Milwaukee-based Harley-Davidson Motor Company.
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Theatre student pulls back curtain on racial tensions
WHITE PRIVILEGE Inspired by social her assistant director in a We Are IN THE SPOTLIGHT Marquette podcast. Marquette’s production of White media discussions Moore says everyone from her Privilege was selected to be about the meaning performed in January 2019 at the classmates to Chair of Digital Kennedy Center American College and impact of white Media and Performing Arts Stephen Theatre Festival, Region III, in privilege, Marquette Hudson-Mairet encouraged her Madison, Wisconsin. The festival to develop the idea. Hudson- is a national theatre program that theatre student Mairet even recruited two provides a catalyst to improve the quality of college theatre. Malaina Malaina Moore decided women influential in Milwaukee’s Moore also received the Citizen to tackle the topic in professional theatre scene to help Artist Award from the organization Moore expand and polish the script. “for insisting that theatrical a few scenes written production is central to the for a class project. The faculty’s willingness to help urgent community, national and students find opportunities and international conversations on the She ended up writing an entire make connections is one of her campuses of higher education.” play, White Privilege, which opened favorite aspects of Marquette’s Marquette’s 2018-19 theatre theatre program. She also likes its season, selling out all three nights intensity. “They expect a lot from and going on to win a prestigious you because they are preparing you Kennedy Center award. for what you will deal with in the The play explores, through a series real world,” Moore says, adding that of vignettes, the discrepancies her ultimate dream is to open her in life experience between white own theatre. people and people of color. The As part of President Michael R. characters interact in ways that Lovell’s January 2019 presidential illuminate advantages white people address, Moore was honored often don’t realize they have and with the Marquette Difference biases about other racial groups Maker Award for work that they have left unexamined. makes a positive impact on the “What made the play so important Marquette community. is that I can go through it and give The sold-out performances of her people themes now of where play, Moore says, are an example. they can see white privilege … “It shows that even in venues It’s not just in politics or in the that may cater more to white streets, but also school, where audiences, the black experience you can get treated differently by brings in the same money and the teachers when you’re supposed same attention, if not more.” to be treated equally,” Moore told Photo by A.J. Magoon (used with permission) Left to right: Cambryelle Getter, Rene Leech, Malaina Moore and Allie Brotz
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It's cooler in The Commons The Commons by the numbers Marquette’s newest residence hall elevates student living
The Commons, Marquette’s first with a mirrored wall; and multiple $108 million construction cost 25 seats in the Saint Thérèse of newly constructed student residence study lounges with fireplaces. Lisieux Chapel, part of a worship 292,000 total square footage hall in 50 years, upgraded college Windows are everywhere, providing space that caters to all faith traditions 625 seating capacity in the dining living for the 890 first- and second- sweeping city views as well as 3 fireplace lounges facility, which includes a barbecue year students who moved in on sightlines between common areas smokehouse, an allergen-free food 5 construction and design awards Aug. 23, 2018. to easily locate friends. station and wood-fired pizzas The Commons has won One of the facility’s two residential Rooms lend themselves to towers bears the name of the late customization: beds can be easily Ray and Kay Eckstein, recognizing bunked, lofted or remain low; desks “The Commons their generosity to their alma snap apart and can be snapped into mater, including a $10 million gift notched platforms; closets can has become a to help construct The Commons. accommodate dressers. new ‘living room’ Standout common areas include a The facility also features many smart classroom; a theatre sustainability elements. The green for campus. staircase with a floor-to-ceiling roof, underground stormwater We remain screen for viewing sporting events collection tank, low-flow water fixtures or movies; the Practice Room, a and energy-efficient LED lighting grateful for the performance and rehearsal space earned it LEED Silver certification. investment in the residential experience for our students.”
Dr. Xavier Cole Vice President for Student Affairs
A student group gathers on The Commons’ “theatre stairs.”
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EXPANDING ACCESS Marquette announced in May 2019 that enrollment GO was open for its first fully online undergraduate FORTH degree program, a bachelor of arts in strategic communication. The new course is part of a AND university-wide initiative to extend access to a SET THE Marquette education. WORLD “More than an enrollment strategy, expanding ON FIRE. the university’s offering of online degree programs St. Ignatius of Loyola removes barriers and provides opportunities for ONLINE OFFERINGS nontraditional students, including older and/or At the end of the fiscal year, Marquette’s fully online offerings working people who seek to fit school into their in the Marquette Graduate School and the Graduate School of lives,” says David Schejbal, who joined Marquette Management included master’s and/or Ph.D. programs in business in August 2018 as chief of digital learning. administration, Christian doctrine, computing, corporate communication and healthcare Marquette plans to add new online programs at data analytics. An online master of science in supply chain the graduate and undergraduate levels, expand management is also offered and includes three four-day residential offline locations and increase online course options workshops on campus. Marquette also offers an online certificate for current students. In keeping with Marquette’s program in data science. mission, online programs integrate Ignatian pedagogy to create transformative learning experiences that emphasize engagement and critical reflection.
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New student media space boasts transformational technology, fosters integration
STUDENT A game-changing natural light and attractive views that MEDIA LAUDED makeover of Johnston can accommodate dozens of students In March 2019, student from across media disciplines at any reporters from MUTV, MU Hall’s second floor is given time, encouraging collaboration. Radio and the Marquette Wire reenergizing and uniting There is also a new video-audio earned nearly 30 awards from the Wisconsin Broadcasters Marquette student media. control room with digital tools that Association and the Wisconsin rival industry standards and facilitate With support from a $3.5 million Newspaper Association for their live programming, incorporation gift to the Diederich College work covering news and events of musical performances and on and off campus. Marquette of Communication from the prerecorded bits, and more. students clinched first place Bernice Shanke Greiveldinger in categories including WBA Trust, the transformed space now Two new radio studios have upgraded Student Leadership Award, accommodates student audio, equipment, which students have said News Story Writing for Radio, demonstrates that Marquette values Air Check for Radio, Podcasting, visual and print media teams in Public Affairs Programming and one shared area that features open the work they are doing and inspires news website for Marquette space, plenty of windows and them to work harder. Wire, as well as top honors from cutting-edge technology. Finally, students now have a green the WNA in Collegiate Journalist of the Year, Infographic Design Before the renovation, even as audio, screen room with state-of-the-art and Feature Photography. video and print reporting had been virtual sets. The virtual set technology, integrated in the all-digital Marquette which includes tracked cameras, a Wire, student media teams remained high-capacity computer, software spatially divided. Radio offices and the and a number of custom-made virtual Marquette Tribune newsroom were sets, was funded through a gift in in the basement, while TV studios, memory of Jeannie Hayes, Comm control rooms and other offices were ’05, whose promising career in on the second floor. television was cut short by leukemia in 2012. “The renovation means we can bring everything together on one floor,” The renovations also led to a says Mark Zoromski, director of new first-floor office suite for student media. “We are teaching our the O’Brien Fellowship in Public students that to be successful, they Service Journalism program, which need to know every side of media. was created in 2013 to support Having them all together gives them professional journalists working that experience.” on long-form investigative projects around economic and social justice The Greiveldinger gift catalyzed the topics and solutions. project and funded elements like an impressive newsroom with plenty of
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Dental education rooted in mission Celebrating 25 years of excellence in literacy education Wisconsin’s only dental school is in service to the entire state
At the Marquette University School of • The Dental School has seven clinical sites Students graduating from the College of Education are better Dentistry, service is built into the in Wisconsin — three in Milwaukee; four prepared, thanks to the hands-on experience and training they receive curriculum, championed and modeled in less urban or rural regions — where through the Hartman Literacy and Learning Center, which recently students gain experience. by faculty, and embraced by student celebrated its 25th anniversary. The center has provided literacy organizations. Every day, the faculty • In 2018, Marquette’s Milwaukee clinics services to children from more than 17 urban elementary schools provided dental services valued at more and students of Wisconsin’s only than $15.6 million to 17,778 patients. since the early 1990s, when James Hartman started his endowment dental school are in service to not Three of the four rural clinics served to support it in honor of his father, Ralph C. Hartman, Arts ’28, Law ’31. only the Milwaukee metro area, but 8,960 patients. In addition to training education students, the center fosters original the entire state, making a positive • Forty-three percent of the Dental research to inform the field of literacy. impact on public health, care for School’s Milwaukee-area patient underserved populations and the population is eligible for Medicaid strength of local economies. insurance, and the school is one of “The Dental School Wisconsin’s largest health care “The Dental School does the work providers to accept Medicaid. does the work of of a social service agency,” says • For Wisconsin children, students and Dr. William Lobb, dean of the dental faculty completed 4,638 dental a social service school. “What the Dental School screenings, applied 8,851 dental sealants agency. What the does in terms of service is a model and 8,179 fluoride varnishes. for the rest of the university.” • Students volunteered to help provide Dental School nearly 140 children with free screenings and treatment for acute pain and dental does in terms issues at Give Kids a Smile Day, hosted annually by the Dental School in of service is a partnership with the Greater Milwaukee model for the rest Dental Association. of the university.”
Dr. William Lobb Dean, Marquette University School of Dentistry
Milwaukee-area school children entering Schroeder Hall to attend the Hartman Literacy and Learning Center. 24 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 25 RESEARCH AND INNOVATION This page has been intentionally left blank
GOLD STANDARD WE PLANT THE SEEDS The National Institutes of Health (NIH) is Marquette’s largest single source of research THAT ONE funding, accounting for 27 percent of all grant DAY WILL dollars awarded to university researchers. Current GROW. St. Óscar Romero NIH grants fund 35 faculty research projects, and
13 of these are categorized as “R01” — the NIH’s ACTIVE R01 GRANTS $1.2 million to study proteins involved in gold standard. R01 grants are awarded only for DNA repair $1.7 million to study suprachiasmatic research proposals that demonstrate the strongest nucleus cells, the brain’s body clock $1.4 million to explore clearer science and potential health impact. CT diagnostic imaging $1.2 million to research causes of faster Currently, $20 million in R01 grant funding is muscle fatigue in older adults $2 million to examine neurobiological powering research at Marquette on health issues causes of relapse among cocaine addicts $1 million to study two enzymes involved from cancer care to addiction treatment to circadian in steroid biosynthesis rhythms. As the number of R01 grants expands, $1.5 million to study aortic changes that cause hypertension Marquette is investing in initiatives to further $2.6 million to study the role of stress, impulse control and decision-making in support faculty in competing for NIH dollars, addiction treatment $1.55 million to advance knowledge propelling the university along its strategic goal of RNA protein interactions for cancer treatments of rapidly expanding research funding. $1.6 million to understand cardiovascular system regulation in people with spinal cord injury $1.9 million to explore the effects of negative experiences on people with psychological disorder to inform pharmaceutical treatment $1.6 million and $1.9 million to advance understanding of gene delivery to stimulate regeneration and growth of spinal nerves
26 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 27 RESEARCHMISSION AND INNOVATION
Rooted in research, new clinic will address trauma in Milwaukee
IT TAKES A VILLAGE In unveiling the impacts mental health; not With its diverse on-campus and addressing that trauma in survivors off-campus partners, the Next Step President’s Challenge often perpetuates a trauma/poverty Clinic leverages an impressive array at his 2018 campuswide cycle. Developmental interventions of expertise to meet a critical community need. address, President are another area in which the Next Step Clinic can fill a gap, as families Dr. Iqbal Ahamed Michael R. Lovell without insurance have experienced Computer Sciences invited interdisciplinary, years-long wait times for services Dr. Abir Bekhet Nursing collaborative proposals and often have to leave Milwaukee Dr. Mary Carlson County to receive them. Educational Policy and Leadership to address one or more “When a child is developing, you Tim Coughlin areas of inequity in don’t want to wait a year to address Milwaukee SUCCEEDS and United Way Milwaukee’s most under- these problems,” Van Hecke says. Martina Gollin-Graves served neighborhoods. The Next Step Clinic opened Mental Health America of Wis. He sought ideas, he said, that in October 2019 inside the Leah Jepson Mental Health America of Wis. would change the trajectory of headquarters of the Next Door Foundation, in an empty space that Dr. Norah Johnson lives among vulnerable populations. Nursing was, serendipitously, designed as a The first-ever President’s Challenge Dr. Lynne Knobloch-Fedders health care clinic. The grant money award — a $250,000, two-year grant Counselor Education and will immediately fund qualified Counseling Psychology — went to Dr. Amy Van Hecke, professionals and staff. Wendy Krueger associate professor of psychology, Speech Pathology and Audiology and a team of faculty and Van Hecke points out that Next Rev. Walter Lanier community-based collaborators. Step provides short- and long-term MATC and MIRACLE Network Their idea: to open the Next Step solutions to the problems facing Dr. Dessie Levy Clinic, creating a resource in the children and families, providing General Baptist State Convention and True Love Outreach Center heart of a struggling, inner-city needed interventions quickly while also building the pipeline of Dr. Alexandre Martins neighborhood to address mental Theology and Nursing health and developmental issues of qualified professionals over time: Linda Menck children and families. “By involving students in this Communications clinic, we are training more and Such services are badly needed. Dr. Steve Saunders more professionals to work with Project partners point to the impact Psychology children and families … making it of trauma that people living in Troney Small easier for families to get the Psychology staff poverty or violent neighborhoods services that they need.” Dr. Tracey Sparrow experience and how it negatively Next Door Foundation Ida Winters Mental Health America of Wis.
Excerpted from Marquette Magazine, Spring+Summer 2019
Dr. Amy Van Hecke, shown at the new Next Step Clinic.
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Exploration is who we are Henke Terrace hosts outdoor inspiration Explorer Challenge seeds innovation with annual grants
The Explorer Challenge, formerly the more than $10.5 million in external Marquette students now have an outdoor space in which to innovate, Strategic Innovation Fund, invites grants and other revenue — earning create and connect. The Henke Terrace opened in October 2018, Marquette students, faculty and staff Marquette an impressive 45 percent activating formerly unused space just outside the 707 Hub, home of to submit proposals each year for up return on its investment. Perhaps as the Kohler Center for Entrepreneurship and the Social Innovation to $25,000 in seed money for impressive: 444 project pre-proposals Initiative. Complementing the 707 Hub’s resources that encourage innovative projects that reflect were submitted and 267 of these and help develop new business ideas, the Henke Terrace was Marquette’s Catholic, Jesuit mission were finalized, showing that designed by students and 707 Hub staffers. It was made possible and advance the university’s strategic innovation is alive and abundant in the through a generous grant from the Gordon Henke Family Foundation, plan, Beyond Boundaries. greater Marquette community, as is facilitated by Mary Henke, trustee emerita. the desire to make a difference in To be funded, proposals need to new ways, across many disciplines. clearly illustrate potential impact in one or more of the strategic plan’s To date, Explorer Challenge funding thematic areas, demonstrate has supported projects in a wide “At Marquette, innovation, leverage cross-campus range of topics, with many focusing collaboration and have viable goals on: student entrepreneurship and innovation is and financial sustainability. social innovation, water and the environment, advanced visualization a means to a In its first three years, $7 million in technologies, health and wellness, Explorer Challenge awards funded and community partnerships. greater end: 72 initiatives, which, in turn, garnered making a difference.”
Dr. Jeanne M. Hossenlopp Vice President for Research and Innovation
30 MARQUETTEMARQUETTE UNIVERSITY UNIVERSITY ANNUAL ANNUAL REPORT REPORT FY2019 FY2019 31 ATHLETICS
GOLDEN EAGLE PRIDE
Marquette University’s 16 Division I athletics IF WINNING programs grow the university’s brand awareness, WEREN’T foster alumni engagement and contribute to a IMPORTANT, richer collegiate experience for all students. With NOBODY conference revenue of $4.8 million, the program WOULD continues to be among the most efficient in its KEEP SCORE.
peer group, ranking in the 94th percentile among Al McGuire Division I non-football schools. Legendary Marquette men’s basketball coach
Marquette’s 320 student-athletes continue to BLUE & GOLD FUND perform well academically with a mean grade Marquette’s Blue & Gold Fund aims to cover all of the full athletic scholarships permitted each year by point average this academic year of 3.24. They the NCAA. This year, 5,346 donors provided more than $5.1 million in also continually demonstrate a growing commit- scholarship support to the Blue & Gold Fund for scholarships for Marquette ment to the Jesuit promise of being men and student-athletes. The 27th annual Blue & Gold Fund auction, with more than women for and with others through 6,481 complet- 400 attendees, raised a historic total of more than $900,000. ed hours of service (up from 5,222 hours last year).
Women’s lacrosse team players react to seeing their new home in the Athletic and Human Performance Research Center, which opened in spring 2019.
MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 3332 MISSIONATHLETICS
Lacrosse player draws on faith after bittersweet start
Playing four years positive experience. Despite having to redshirt his freshman year, “I of varsity lacrosse thought, ‘Maybe I can’t contribute for Wisconsin’s Kettle on the field this year, but I can Moraine High School, contribute in other ways,’” he says. Jordan Schmid always That year, Schmid managed the team’s Catapult system. The had his eye on software gathers data on player Marquette University. exertion during a given practice, “I loved the culture and what they week or game to help prevent injury “I grew a lot in my were building here,” he says. “I and promote recovery. He even went to their prospect camp every turned the role into an independent faith that year, with summer to see if I could earn a spot study for college credit. my injury. That is a in their recruiting class.” Recovered for the 2018-19 season, The dream finally came true, but Schmid contributed on the field as huge part of what not until the summer after Schmid a reserve midfielder, and in early keeps me calm — had graduated high school and was summer was elected president already committed to a Division II of the Student Athlete Advisory just understanding school in Colorado. Committee, both at Marquette and for the entire Big East Conference. that God has a Working closely with the Office of The SAAC gives student-athletes bigger plan for me, Undergraduate Admissions, Schmid a voice in NCAA initiatives and was able to enroll in fall 2017 as organizes service projects, such and if I work hard, an exercise physiology major. He as a recent trip Schmid and other began practicing with the team that Marquette athletes made to help I can achieve it.” fall, although he was still appealing rebuild homes in Puerto Rico. release from the Colorado school. Jordan Schmid “It’s a time commitment,” Right before practice one day, he got acknowledges Schmid, who says the good news: His release had gone he has always thrived on a busy through and he would be able to play schedule. “I could just play lacrosse once Marquette’s season began. and go to school, but I want to make An hour later, Schmid tore his ACL an impact, and that’s not going to during a ground ball drill. happen unless you take risks.” “That was a really up and down day for me,” he says, understatedly. Drawing on his faith, Schmid turned what could have been a Jordan Schmid poses on a devastating circumstance into a rooftop during a Marquette student-athlete service trip to Puerto Rico.
34 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 35 ATHLETICS
First year in “The Fiserv” Dwyane Wade Day: Honoring a legend New home for men’s basketball an unrivaled fan experience
Golden Eagles fans have a beautiful at the Fiserv Forum saw attendance Marquette and its men's basketball program honored former standout new venue in which to cheer on the rise 11 percent over the previous player and decorated NBA star Dwyane Wade on Jan. 20, 2019, not long Marquette University men’s basketball season, putting Marquette at No. 9 after he announced his retirement from professional basketball. Held in team. Located in the heart of in attendance. conjunction with a Golden Eagles game at Fiserv Forum, the celebration downtown Milwaukee, the recently “The Fiserv Forum is a tremendous included heartfelt tributes from former Marquette teammates and a opened Fiserv Forum is a world-class asset, not only to our men’s halftime ceremony in which Wade spoke of the “many memories” created sports and entertainment venue and basketball program, but to our during his years at Marquette. The Miami Heat recruited Wade in 2003 the official home of the Milwaukee university community as a whole,” after he helped lead Marquette to the Final Four that year. Bucks, the city’s NBA team. says Bill Scholl, vice president and Shortly after the arena opened on director of intercollegiate athletics. In a special Aug. 26, 2018, the Marquette men’s “The Bucks have been tremendous basketball program welcomed fans to partners and the opportunity to August 30 an open house to show off the new host basketball games, graduations column for digs. Seating 17,500, the Fiserv Forum and special events in a world-class boasts unrivaled viewing experiences facility is a difference maker. onmilwaukee.com, as well as the largest square Specific to men’s basketball, the scoreboard in North America. game experience has been Brian Foley wrote, elevated dramatically for both our Marquette men’s basketball has players and fans, creating a “The [Fiserv] Forum nearly two decades of top-25 home-court advantage among the attendance among more than is the nicest best in the country.” 340 NCAA Division I teams basketball arena nationally, and the first full season in the nation, full stop.”
Milwaukee’s new Fiserv Forum, home of Marquette men’s basketball.
Dwyane Wade walks through the men's locker 36 room at the Fiserv Forum. MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 37 OUR PEOPLE
LEADING BY EXAMPLE “A Culture of Inclusion” is one of six goal themes CURA within Marquette’s strategic plan, Beyond Boundaries. PERSONALIS This year, funding from the plan’s operating budget Latin for “care for the whole person,” a tenet of Jesuit spirituality enabled university leaders, faculty, staff and students
to explore and confront unconscious bias in a sought- PROMOTING A SENSE OF COMMUNITY after workshop from the YWCA of Southeastern This fiscal year, Marquette faculty and staff formed two Wisconsin, “Unlearning Racism.” new employee resource groups (Womxn of Color and Women The University Leadership Council was first to of Marquette), bringing the total to seven on campus. Groups are based on affinities like race, complete the intensive, 16-hour series designed to gender, LGBTQ status, working moms and a group for newer, foster personal commitment to addressing racial younger employees called Social Professionals. Such inequities and equip participants to build richer groups help support, retain and attract the best employees relationships across racial differences. — each ERG aims to promote a sense of community and Dr. William Welburn, vice president for inclusive build personal and professional networks to foster a diverse excellence, explains that although Marquette has and inclusive community. long deployed organizational diversity training, programs like “Unlearning Racism” help address root causes of inequity through examining individual biases. “Before you can create institutional change, you have to make some individual change,” he says.
Dr. Simon Howard, assistant professor of psychology and director of the Psychological Social Inquiry Lab in the Klingler College of Arts and Sciences.
38 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 39 MISSIONOUR PEOPLE
Improving employee communications and professional development
EMPLOYEE Successful employee launched in early 2018 — nearly COMMUNICATIONS HUB 50 percent of supervisors have Managed by the Office of Marketing engagement is a high completed it. and Communication, Marquette priority for Marquette for Today serves as the university’s “We are in the high 90th percentile primary employee communications many reasons, including of people finding it to be ‘valuable medium. Central to Marquette Today and worth their time,’’’ notes Wendy is a website that serves as a news to help advance its hub for university announcements strategic plan, Beyond Butler, director of organizational and events. The site is augmented development, who will leverage by a twice weekly e-newsletter of Boundaries. participant feedback to refine the the same name that goes to all program. Participant surveys provide faculty and staff. OMC also “If you are going to achieve strategic maintains a student version. goals, the degree to which you have insights into key takeaways, goals, an engaged group to help you do behavior change, barriers to success, it is very important,” says Claudia and more. Paetsch, Marquette’s vice president LEAD for human resources. This year saw This year also saw the launch of expanded initiatives targeting key LEAD (Leadership Engagement aspects of employee engagement. and Dialogue), an employee Listening to employees communications initiative aimed Though employee engagement at building trust and operational surveys are uncommon within understanding among mid-level higher education, Paetsch says managers. Targeting about 500 universities “should be doing employees, LEAD deploys twice this, because faculty and staff monthly management briefings engagement is directly associated via email that include talking points with student engagement.” around university priorities and issues, and gathers the group With a nearly 15 percent participation throughout the year for deeper dives rate increase, Marquette completed into issues like university finances its second such survey this past and enrollment strategy. May seeking to understand, for example, how connected employees Professional growth feel to Marquette and its mission, This year’s focus for GROW attitudes about working relationships sessions — “one-off” classes with managers and colleagues, offered to all employees, and a host of other questions. covering myriad subjects — has Responses will inform action plans largely centered on professional and recommendations for each growth. “We have also started department and for the University a Professional Growth Series,” Leadership Council. Butler says. “People really want development opportunities, so we Developing leadership skills created a series for those ready to Marquette’s internally developed make a dedicated commitment.” Leadership Development Program Marquette employees take a walking tour of Sculpture Milwaukee. The guided tour was sponsored by Marquette's GROW sessions in collaboration with the 40 Haggerty Museum of Art and Marquette Wellness. MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 41 OUR PEOPLE
Meet Claudia Paetsch Taking a pulse on wellness New VP for human resources joins Marquette from Northwestern Mutual
What drew you to this role? To augment Marquette’s robust employee wellness offerings, the university Marquette’s mission. Not only experienced HR from many vantage introduced Virgin Pulse, a wellness portal available to all employees and their Beyond Boundaries, which is a great points. My last role at Northwestern spouses. The program encourages and helps track wellness activities and blueprint for the future, but their Mutual as a business partner gave practices, from fitness and healthy eating to mental wellness, sleep habits and mission as a university overall. Their me a view of HR from the business more. By integrating Marquette’s existing wellness benefits, Virgin Pulse offers a contributions to the community in unit’s perspective, and you see how convenient resource to support users on their individual wellness journeys, and which we live and work — through they receive and experience HR enables the Marquette wellness and benefits teams to better understand what “Marquette’s initiatives like Near West Side initiatives. It’s sometimes a little elements engage users most. Partners, SWIM (Scaling Wellness in shocking, like, ‘We developed this contributions to Milwaukee) — and the way the great program, and you’re not using the community in students go out to the community it, why?’ But HR that is not leading and engage, is inspiring and exciting. from the organization perspective is which they live and In a world with so much negativity, never going to be relevant or work ... and the seeing the students’ hopefulness, valuable. There is a desire by the dedication and engagement, it is so university community to be way the students positive and reinforcing. understood, and HR is here to work with them to help solve problems go out to the What do you bring to this role? and achieve our mission. I’ve been in HR a very long time, community and with different organizations, and I’ve engage, is inspiring and exciting.”
Claudia Paetsch Vice President for Human Resources
42 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 43 PARTNERSHIPS
BETTER TOGETHER Standing in the heart of Milwaukee, Marquette WE ALL is an active collaborator in the pursuit of a more HAVE THE just society. Engaging with the community and DUTY TO the world through meaningful partnerships is rooted in our Catholic, Jesuit tradition. DO GOOD. Pope Francis To achieve Marquette’s vision to develop “Marquette as a comprehensive off-campus partnerships, the Catholic, Jesuit university recently united its Offices of Community university will be Engagement and Corporate Engagement and a national leader Partnerships under the new Office of Economic in community Engagement. Here, businesses and nonprofits engagement, gain a holistic perspective of all that Marquette including within has to offer through research, teaching and service. the corporate sector. “Our vision as a Catholic, Jesuit university calls us ... Because of our mission and our to reach beyond traditional boundaries, embrace location, we are collaborative approaches and create an inclusive well-poised to do this environment,” President Lovell says. “By unifying work effectively.” our community and corporate engagement activities, Dr. Dan Bergen Marquette can more effectively help address the Executive Director Community Engagement economic disparities in our community.”
Employees from Kohler Company taking a class through Marquette’s Kohler MBA program, designed for busy professionals in Wisconsin’s Fox Valley area.
44 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 45 PARTNERSHIPSMISSION
Public art project is “curating the city”
WATERMARKS for WaterMarks several years ago, she COLLABORATORS hit on the idea of bringing Miss in as an artist-in-residence. ARTIST MARY MISS AND HER ORGANIZATION The Haggerty secured a $200,000 CITY AS LEARNING grant from Marquette’s Explorer LABORATORY Challenge Program to develop the UNITED COMMUNITY project, as well as a grant from the CENTER’S ACOSTA Institute of Museum and Library MIDDLE SCHOOL Services that “allowed us to prototype the complete WaterMarks SIXTEENTH STREET COMMUNITY Outside Acosta Middle process at both Acosta and Sixteenth HEALTH CENTERS School, located within Street Community Health Centers,” Longhenry says. KK RIVER NEIGHBORS the United Community IN ACTION Both sites hosted educational Center on Milwaukee’s community walks and held REFLO: SUSTAINABLE south side, a giant red culminating workshops where artists WATER SOLUTIONS letter “A” stands atop proposed public art concepts to the MILWAUKEE community. Three such installations METROPOLITAN a tall pole. Installed in were completed this fiscal year, in SEWERAGE DISTRICT October 2018, it is Mil- addition to the “A” outside Acosta, THE SCHOOL OF waukee’s first Water- where students completed a water- FRESHWATER SCIENCES Mark, anchoring what focused academic unit. AT THE UNIVERSITY OF Now, the Haggerty’s focus is on WISCONSIN-MILWAUKEE will become an “atlas maintaining long-term relationships WATERMARKS of water” for the city. with the WaterMarks partners (see FINANCIAL This atlas-in-progress is the focus sidebar) to continue educational SUPPORTERS of WaterMarks, a public art initiative programming as well as collaboration with local artists and the community THE INSTITUTE OF conceived by New York-based artist MUSEUM AND LIBRARY Mary Miss. It invites local artists, to produce more public art. SERVICES scientists and residents to explore “This project is unique because it’s connections to the land, lake and MARQUETTE not happening at the art museum,” UNIVERSITY EXPLORER rivers, reminding the community Longhenry says. “We are curating the CHALLENGE FUND of the ways water connects and city … to create public works of art sustains us and encouraging a that speak to issues important to all of shared commitment to protect this us. I love that this program is causing precious resource. us to rethink what art museums — When Haggerty Museum of Art especially academic art museums — Director and Chief Curator Susan can and should be.” Photo by Wangard (used with permission) Longhenry heard about Miss’s idea One stop on the WaterMarks tour is a specially designed water feature at Freshwater Plaza, a mixed-use development in Milwaukee’s Walker’s Point neighborhood. Located at the gateway to the city’s burgeoning Harbor District, the feature is not merely an attractive architectural element — it serves an important environmental purpose by capturing and storing up to 30,000 46 gallons of filtered rainwater run-off. MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 47 PARTNERSHIPS
New VP for Economic Engagement seeks partnerships for the greater good Food service provider part of the family Dr. Maura Donovan sees an “incredible opportunity” for corporate and community engagement at Marquette
Marquette’s Office of Economic “incredible opportunity” for Marquette The university’s long-running partnership with Sodexo, the campus food Engagement is formalizing, when it comes to holistic engage- service provider since 1973, “works well because we have a great team streamlining and enhancing the ment based on shared values and on campus,” says Rick Arcuri, executive director, business operations ways we work with partners in the strategic priorities. and auxiliary services. “They focus on providing great food, but they also corporate sector and community. In addition to research strengths, engage with and take care of our students and become a part of the fabric At its helm is Dr. Maura Donovan, technology innovation, tailored of campus life.” who arrived at Marquette in January executive education, strategic 1.98 million meals served 500 Sodexo student employees 2019 from the University of philanthropic support and talent Minnesota, where she designed, acquisition, Donovan adds that 42% of food sourced locally $25,000 of coffee sold launched and led the office of “increasingly, corporate entities Academic year 2018-19 economic development, leading that are looking to engage with to increased corporate-sponsored universities like Marquette are doing “Economic research, stronger relationships with so because we add value, and they engagement is economic development organizations, are asking to work together to impact new opportunities for companies to the communities we serve,” Donovan about positively engage with students, and a cross- says. “Marquette stands out because campus culture of collaboration. of the type of leader that is groomed impacting the Donovan’s charge at Marquette is and developed here – that nexus of community similar, and she is excited to uncover mission and scholarship.” by forging and leverage what she believes is an strategic external partnerships for the greater good.”
Dr. Maura Donovan Vice President for Economic Engagement
Donovan is a scientist by trade, with a Ph.D. in pharmacology and a post-doctoral fellowship in biochemistry. She was on the team that developed the first implantable neurostimulation therapy to treat symptoms of Parkinson’s disease.
Sodexo employee Cynthia Byrd welcomes students to the dining facility in The Commons, Marquette’s new residence hall. 48 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 49 FINANCES, OPERATIONS AND ADMINISTRATION
SUSTAINABLE SOLUTIONS Sustainability aligns with Marquette’s Catholic, FIND Jesuit mission to care for others through social responsibility and justice, and to develop leaders GOD who demonstrate this care in their personal and IN professional lives. Demonstrating good stewardship of our environment also improves efficiency, can ALL catalyze philanthropy and new funding sources, THINGS. attracts exceptional students and employees, St. Ignatius of Loyola strengthens community relationships and unifies ILLUMINATING EFFICIENCIES our campus around a shared goal. A key sustainability investment this year: upgrades to parking structure lighting. Marquette This fiscal year, Marquette moved forward on its replaced 887 fixtures in two structures with brighter and first-ever campus sustainability plan, which aims more attractive fixtures that use LED lighting, taking to achieve key sustainability goals by 2025 around advantage of a Focus on Energy rebate from We Energies. emissions reduction, improved energy efficiency in The investment is expected to recoup in approximately buildings, reduced water use and waste generation, 3.5 years and will generate continued efficiencies over the and increased landfill diversion. An important expected 20- to 30-year life of the LED lights. component of the plan is increasing students’ sustainability literacy by weaving sustainable ideas into the curriculum and engaging students through The Commons, Marquette’s newest strategic campus communications. residence hall facility, features a green roof and courtyard space with native trees, plants and grass.
50 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 51 MISSIONFINANCES, OPERATIONS AND ADMINISTRATION
World-class research, elite athletic performance, one roof
AHPRC BY THE NUMBERS The second facility area for athletes, as well as locker 400 number of construction workers in Marquette’s rooms, high-tech indoor practice 950 yards of concrete poured facilities and support space for the Campus Master university’s men’s golf team, as 100 doors in the facility well as the first-ever permanent 39,000 bricks that were used could Plan, the $24 million, build a 20-foot-tall wall surrounding a locker room space for the men’s and basketball court. 46,000-square-foot women’s lacrosse programs. 320 square feet of fabric duct in the Athletic and Human The architecture firms of strength and conditioning space could make jerseys for the entire Performance Research Perkins+Will and HGA designed women’s lacrosse team. Center opened March 4, the facility with a focus on high- 39,000-pound air handling unit on quality materials and potential for the roof weighs as much as 2019 — just under one expansion, which the university says 125,115 lacrosse balls. year after workers for will take place in phases. The facility 7,200 hours to install the HVAC was designed to complement systems, which was equal to Mortenson broke ground adjacent university buildings. At 36 holes of golf the Marquette to begin its construction. men’s golf team members could the north end of the AHPRC is a have played daily for the entire The foundation of a new research two-story glass wall that provides academic year. era for Marquette, the AHPRC visibility to the strength and provides 5,400 square feet of conditioning space as well as the dedicated space where Marquette interdisciplinary research space. faculty and external partners can Located underground next to the research elite athletic performance, facility is a sustainable stormwater human performance, rehabilitation, system, one of the university’s fitness data analytics and other most important environmental related disciplines. The AHPRC aims initiatives. Stormwater retention to be a leading center that facilitates tanks reduce runoff throughout collaborative and innovative research the campus and are built to in athletic, healthy and clinical accommodate additional campus populations to advance knowledge building going forward. Lora to optimize human performance Strigens, vice president for while training the next generation of planning and facilities management, basic and applied scientists. says the system can reduce peak The facility also houses a world- stormwater discharge rates by class strength and conditioning more than 65 percent.
An exercise class for parents of children with autism takes place in the AHRPC. Dr. Norah Johnson, associate professor in the College of Nursing, tracks the effects of exercise intervention on parenting stress.
52 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 53 FINANCES, OPERATIONS AND ADMINISTRATION
Sourcing goes online New police chief leads dynamic department University launches MARQetplace e-procurement solution
Marquette’s new e-procurement stakeholders from across campus. Bringing a passion for community policing and 25 years in progressive software, branded as MARQetplace, The work we did as a team to make leadership roles with the Milwaukee Police Department that culminated in went live in February 2019. The our deadlines was nearly as rewarding serving as assistant chief of police, Edith Hudson became Marquette’s chief decision to shift to a fully online as successfully launching the new of police in December 2018. She now leads more than 80 officers to protect procurement solution was driven in e-procurement system.” and serve the university community. Chief Hudson says she is focused on large part by the Sustainability of The team, which involved staff from and energized by the community relations aspect of her role. She also brings Valuable Resources goal in Beyond Information Technology Services, to MUPD experience in and a desire to better utilize data and data models to Boundaries, the university’s strategic exceeded its goals for the number of inform the department’s crime prevention and policing efforts. plan. Efficiency and a modernized “punchout” suppliers enabled on the user interface for Marquette and its go-live date, i.e., vendors whose own suppliers, as well as the ability to web-based product catalogs are further expand the university’s directly accessible from strategic sourcing initiatives, are key MARQetplace. More vendors long-term benefits. continue to be added. “It took a lot of Coupa was selected as the software Next, the university will begin to vendor just as the last fiscal year was leverage the software’s functionality teamwork ... and ending, says Jenny Alexander, that automates competitive bidding. a lot of engaged director of purchasing. After gathering a year’s worth of data, “To contract with a supplier in June the Purchasing Department can begin stakeholders from and then go live in February was a to leverage different pricing across campus. The very short turnaround time,” she says. agreements to save money and “It took a lot of teamwork, a lot of improve efficiencies. work we did as a long hours and a lot of engaged team ... was nearly as rewarding as successfully launching the new system.”
Jenny Alexander Director of Purchasing
54 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 55 PHILANTHROPY
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FUNDING FAITH Philanthropy at Marquette begins with a shared YOU HAVE commitment to carrying forward the vision and GIVEN ALL mission of our founders. Donors and supporters have TO ME. TO the opportunity to advance these values in ways they find meaningful, and together we determine how to YOU, LORD, direct these resources to support our work in today’s I RETURN IT. St. Ignatius of Loyola world. It is this mission alignment that makes the
process rewarding on both sides as we collaborate to STEMPERS GUIDED BY MISSION help gifts make the most significant impact possible. Bill Stemper, Eng ’77, and his wife, Nancy, Sp ’78, Grad Enabling generations of future students to explore ’79, met at Marquette and attended Mass at Gesu as a and deepen their Catholic faith was the vision of two second date. The university’s Catholic, Jesuit identity had a Marquette alumni who this year committed to a gift profound effect on their college experience, inspiring their gift of more than $1 million to fund the Bill and Nancy to help sustain faith formation initiatives at Marquette for the foreseeable future. “Nothing is Stemper Endowment for Excellence in Catholic Faith more valuable than developing one’s faith in life,” says Nancy, Formation. The endowment will ensure resources for “because it will be their guiding faith-based programming and self-reflection, and also star forever.” broaden access to these opportunities.
56 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 57 PHILANTHROPYMISSION
$5 million gift founds Institute for Women’s Leadership
FANFARE FOR NEW INSTITUTE Part of Marquette’s equality issues, with the goal In laying the groundwork and of contributing to the national gathering input to shape the distinctive history as a dialogue on gender bias and the Institute for Women’s Leadership, progressive, Catholic underrepresentation of women in all Dr. Jeanne Hossenlopp has received overwhelmingly positive feedback university committed to sectors of the economy. Additional from students, faculty, staff, alumni research will explore potential and and community members. To developing strong lead- proven strategies for providing date, she has led internal visioning meetings, formed a faculty ers is the decision 110 women with equitable access leadership team and held listening years ago to become the to leadership opportunities, and sessions with alumni groups in institute programming will promote the Chicago and New York metro world’s first Catholic uni- areas. “The enthusiastic response leadership development and demonstrates the great potential versity to educate men networking opportunities for women for Marquette to become a thought on campus and in the community. leader in the field of women’s and women together. leadership,” she says. A $5 million gift from the Thomas The gift builds on a 2015 donation J. Rolfs Family Foundation will to Marquette that established the further enable Marquette to Women’s Innovation Network, support and promote women’s which plans, co-sponsors and economic advancement and promotes events that encourage leadership development. inclusive innovation and connects students, faculty and staff. The At his campuswide address in WIN’s robust programming will be January 2019, President Michael R. led by the new institute. Lovell announced that the gift would establish the Institute for Women’s “The institute’s work will help Leadership. “Gender equity and Marquette move forward on all inclusive representation in the six themes in our strategic plan, workforce and education at all levels Beyond Boundaries,” Hossenlopp are critical topics both nationally and says. “By combining research within our campus community at with programming that targets Marquette,” he told attendees. people at all stages of their career progression, the institute will Representatives from the Rolfs enable Marquette to contribute Foundation collaborated with to creating more inclusive Marquette’s vice president participation in leadership, for research and innovation, ensuring that a broader range of Dr. Jeanne Hossenlopp, who voices are incorporated into future oversees the institute, to shape workplace innovation.” its supported objectives, including cutting-edge research on gender
The Institute of Women's Leadership team from left to right, Jennica Webster, Sasha Parsons, Jean Grow and Andrea Schneider.
58 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 59 PHILANTHROPY
New VP for Advancement looks to build a “culture of philanthropy” Gift establishes new Neuro Recovery Clinic Tim McMahon built a track record of fundraising success at Villanova
New York native Tim McMahon was Upon his arrival, McMahon In December 2018, an anonymous donor made a $1 million named vice president for university expressed strong enthusiasm gift to the College of Health Sciences to establish a Neuro advancement in October 2018, for the Catholic, Jesuit mission Recovery Clinic at Marquette. By May 2019, the clinic — the bringing his shared goal of “building a of Marquette, as well as the only one of its kind in Wisconsin and one of just several in the culture of philanthropy” to Marquette. Office of University Advancement’s region — had opened its doors to serve people with debilitating neurological challenges such as brain and spinal cord injury. “I look forward to overarching goals and objectives: McMahon came to Marquette from It provides intensive and long-term services — “life-changing “This is a time of great momentum partnering with Villanova University, where he served therapies,” says the donor, that are often unavailable to patients at Marquette,” he said, “and I as senior associate vice president in in the current health care marketplace. look forward to partnering with the university's university advancement and played a the university’s alumni, parents alumni, parents pivotal role in helping the school and friends to help support the surpass its campaign goal. He brings groundbreaking initiatives, and friends to nearly two decades of experience in projects and programs taking help support the development for higher education, shape at the university.” groundbreaking including successful leadership in athletics development. initiatives, projects and programs taking shape at the university.”
Tim McMahon Vice President for University Advancement
McMahon speaking at the Marquette University Volunteer Summit.
60 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 61 FINANCIALS
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Management’s Discussion and Analysis
The objective of management’s discussion and analysis (“MD&A”) is to give readers an overview of the financial position and operating activities of Marquette University for the year ended June 30, 2019, with selected comparative information for the year ended June 30, 2018. This discussion should be read in conjunction with the audited financial statements and the notes to the financial statements. The statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). The three primary statements included in this report are the statements of financial position, the statements of activities and the statements of cash flows. Financial statement footnotes provide additional explanations for various portions the financial statements.
62 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 63 Marquette University Pledges receivable consists of unconditional promises The 5-year Marquette endowment performance is summarized in the table below: to give recognized initially at fair value as contribution Marquette University is an independent, coeducational, revenue in the period the promise is made by a donor. The not-for-profit institution of higher learning and research fair value of the pledge is estimated based on anticipated ENDOWMENT PERFORMANCE SUMMARY located in Milwaukee, Wisconsin, formally opened in 1881 future cash payments discounted using a risk-adjusted rate FISCAL YEAR ENDING and conducted under the auspices of the Society of Jesus. commensurate with the duration of the planned payments. 5-YEAR Through its eleven nationally and internationally recognized ANNUALIZED 2019 2018 2017 2016 2015 separate colleges and schools, the university offers a Student repayment of federal program loans resulted in Market Value (in millions) $698.0 $668.8 $626.2 $550.1 $551.6 comprehensive range of bachelor’s degree programs, a lower student accounts and loans receivable balance. Endowment 5.5% 5.3% 7.9% 11.8% –0.9% 3.7% master’s degree programs, doctoral degree programs and Under federal program guidelines, universities are no post-baccalaureate first professional degree programs. longer allowed to make new Federal Perkins Loans. Policy Index 4.2% 4.2% 7.3% 10.6% –1.6% 1.0% A Marquette education offers students a virtually unlimited Additional information about student accounts and loans S&P 500 Index 10.7% 10.4% 14.4% 17.9% 4.0% 7.4% number of paths and destinations and prepares them for receivable can be found in Note 1(f) of the consolidated MSCI AC World ex USA (Net) 2.2% 1.3% 11.1% 20.5% –10.2% –5.3% the world by asking them to think critically about it. financial statements. Barclays Capital Agg. Bond Index 2.9% 7.9% –0.4% –0.3% 6.0% 1.9% Investments represent the largest university asset. Statement of financial position Investments consist of long-term cash equivalents, endowment, trust and other investments. The endowment The statement of financial position provides information Additional information on endowments and endowment For fiscal year 2019, Marquette University’s operating fund’s investment objective is to preserve purchasing about an organization’s assets, liabilities and net assets income can be found in Note 4 of the consolidated financial income was $30.6 million. Operating results in the power, while providing a continuing and stable funding at a specific moment in time. The statement reports total statements. consolidated statement of activities reflect all transactions source to support the overall mission of Marquette assets, liabilities, net assets and separate totals into two that change net assets, except for activity associated with University. To accomplish this objective, the fund seeks to Net property, building and equipment grew due to classifications of net assets: without donor restrictions endowment investments and certain other nonrecurring generate a total return that will exceed its annual spendable construction related to the Athletic and Human Performance and with donor restrictions. Additional information about transactions. amount, all expenses associated with managing the fund Research Center and the new Physician Assistant net assets can be found in Note 1(b) of the consolidated and eroding effects of inflation. The fund is managed on a Studies building. Additional information about property, The fiscal 2019 operating revenue increase is primarily financial statements. total return basis. buildings and equipment can be found in Note 1(h) of the due to net student tuition and fees and other income. The statement of financial position, along with related consolidated financial statements. To achieve this investment objective, the fund is allocated Net tuition and fees of $256.6 million represents a footnote disclosures, has a twofold purpose. First, the among several asset classes with a bias toward equity and The $10.5 million decrease in notes and bonds payable $9.0 million increase over the prior year. This increase is statement is meant to help assess the university’s ability equity-like investments. The fund is diversified both by and is due to regularly scheduled debt payments. Additional attributable to the largest incoming class in university to continue to provide services. Second, the statement within asset classes. Diversification provides reasonable details regarding notes and bonds payable can be found history. is meant to provide information about liquidity, financial assurance that no single security or class of securities will in Note 7 of the consolidated financial statements. flexibility, ability to meet obligations and potential need Total grant revenue increased $2.7 million or 9% over have a disproportionate impact on the performance of the for external financing. the prior year. The increase is primarily due to growth in total fund. As a result, the risk level associated with the Statement of activities sponsored research. Change in cash and cash equivalents are detailed in the portfolio investment is reduced. The following chart displays statement of cash flows. the endowment targeted asset allocation: The statement of activities is the university’s operating Major contributions were received to support scholarships, statement. It reflects financial transactions from the the Neuro-Recovery Clinic, Excellence in Catholic Faith beginning to the end of the fiscal year that result in Formation, Women’s Leadership and future capital Fixed Income Inflation Hedging increases or decreases in net assets. The statement of construction projects. The “Philanthropy” section details activities reflects changes for both types of net assets: some of the large contributions received during the fiscal 10% 15% without donor restrictions and with donor restrictions. year. International Equity The statement of activities, along with the related footnote Contribution revenue of $47.7 million reported within the 17.5% disclosures, are intended to provide the reader with statements of activities is calculated based on GAAP. As information that will evaluate the not-for-profit organization’s is widespread practice, University Advancement reports Flexible Capital performance during the fiscal year, assess the university’s fundraising according to the guidelines established by the 30% service efforts and its ability to continue to provide Council for Advancement and Support of Education (CASE). services, and assess how university’s management has CASE guidelines represent the philanthropy reporting Domestic Equity 17.5% discharged their stewardship responsibilities and other standard for colleges and universities. Under CASE aspects of their performance. guidelines, philanthropic giving totaled $104.2 million in 10% fiscal 2019.
Cash (0.0%) Private Equity
64 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 65 A normal bridging from GAAP to CASE totals displaying University philanthropic efforts will continue to pursue The following chart shows total operating expense by service: customary adjustments is provided below: support for our students, programs, research and capital priorities. Total Operating Expenditures (dollars in thousands) Additional information on GAAP reporting of contributions Per GAAP $47.7 revenue and pledges receivable is provided in Notes 1(e) Public service: $6,048 1% Accrual basis adjustment (0.7) and 6 of the consolidated financial statements. Institutional support: Priority point gifts 4.2 Auxiliary enterprise revenue of $58.3 million represents $87,406 20% Grants 6.7 a $4.5 million or 8% increase over the prior year. This 28% Instruction: $124,496 Revocable planned gifts 16.9 increase is primarily attributable to an increase in room and board revenue from the larger incoming class. Conditional Gifts/Other 29.4 Endowment income used in operations of $28.4 million Per CASE $104.2 Auxiliary enterprise: 12% reflects a $1.0 million increase over the prior year. $51,500
14% The following chart shows total operating revenues by source: 15% Academic support: $63,885 Student services: $66,564 10% Total Operating Revenues Research and grants: $42,500 Other income: $57,896 Total: $442,399 12% Investment and Endowment income: $28,400 6% Additional information on expenses is provided in Note 13 Cash and cash equivalents at fiscal year-end total of the consolidated financial statements. $33.2 million. Cash equivalents with original maturities of three months or less are classified as cash and cash Contributions: $47,712 10% Statement of cash flows equivalents. Year over year operating cash decreased due 54% Net tuition & fees: to the timing of capital investment in the campus master $256,633 The statement of cash flows provides information about plan. 7% cash receipts and cash payments of the university during Grants: $32,583 Net cash provided from operations continues to be the fiscal year. This statement also provides insight into positive. 11 % university investing and financing activities. Net cash used in investing activity is a result of the Room & board: $49,74 0 The statement of cash flows shows how changes in university investing in the campus master plan through balance sheet accounts and income affect cash and cash construction projects related to academic programming, Total: $472,964 equivalents. It breaks down the analysis into operating, research and athletics. investing and financing activities. The cash flow statement explains the flow of cash in and out of the university. Net cash provided from financing activities continues to Management’s ongoing investment in furthering the mission of the university is displayed through the year over year The statement is intended to provide information on the be positive due to the generous support of university increase in expenditures in the following areas: university’s liquidity and solvency. The statement also donors. Contributions for major capital projects generated provides information for evaluating changes in assets, $5.2 million of financing cash flows. Contributionsor f liabilities and equity, while indicating the amount, timing endowments generated $27.6 million of financing cash INCREASE/ FY19 FY18 DECREASE and probability of future cash flows. flow. Instruction 124.5 117.2 7.3 Academic support and libraries 63.9 61.6 2.3 Research and grants 42.5 38.3 4.2 Student services 66.6 60.7 5.9 Auxiliary enterprises 51.5 46.3 5.2 Institutional support 87.4 82.4 5.0 Public service 6.0 5.9 0.1 Total 442.4 412.4 30.0
66 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 67 FINANCIALS
CONSOLIDATED FINANCIAL STATEMENTS June 30, 2019 and 2018 | With Independent Auditors’ Report Thereon
KPMG LLP INDEPENDENT AUDITORS’ REPORT Opinion Suite 1050 833 East Michigan Street In our opinion, the consolidated financial statements referred to above present fairly, Milwaukee, WI 532025337 Report on the Financial Statements in all material respects, the financial position of Marquette University as of June 30, 2019, and the changes in its net assets and its cash flows for the year then ended in September 6, 2019 We have audited the accompanying consolidated financial statements of Marquette accordance with U.S. generally accepted accounting principles. University, which comprise the consolidated statements of financial position as of June 30, 2019 and 2018, the related consolidated statements of activities for the year ended Report on Summarized Comparative Information June 30, 2019, cash flows for the years ended June 30, 2019 and 2018, and the related notes to the consolidated financial statements. We have previously audited Marquette University’s 2018 consolidated financial state ments, and we expressed an unmodified audit opinion on those audited consolidated financial statements in our report dated September 10, 2018. In our opinion, the sum Management’s Responsibility for the Financial Statements marized comparative information presented herein for the year ended June 30, 2018 is Management is responsible for the preparation and fair presentation of these con consistent, in all material respects, with the audited consolidated financial statements solidated financial statements in accordance with U.S. generally accepted accounting from which it has been derived. principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial Emphasis of Matters statements that are free from material misstatement, whether due to fraud or error. As discussed in note 1(q) to the consolidated financial statements, in 2019, Marquette Auditors’ Responsibility University adopted Accounting Standards Update (ASU) No. 201614, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, and Our responsibility is to express an opinion on these consolidated financial statements ASU No. 201409, Revenue from Contracts with Customers (Topic 606). Our opinion is based on our audit. We conducted our audit in accordance with auditing standards gen not modified with respect to these matters. erally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
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 organization’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 organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant 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.
68 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 69 Consolidated Statements of Financial Position Consolidated Statement of Activities JUNE 30, 2019 AND 2018 YEAR ENDED JUNE 30, 2019 WITH SUMMARIZED COMPARATIVE FINANCIAL INFORMATION (Dollars in thousands) FOR THE YEAR ENDED JUNE 30, 2018 2019 2018
ASSETS (Dollars in thousands) Cash and cash equivalents $33,204 63,264 WITHOUT WITH DONOR DONOR Pledges receivable, net 50,435 52,070 RESTRICTIONS RESTRICTIONS TOTAL 2018 TOTAL Student accounts and loans receivable, net 47,485 53,727 OPERATING REVENUES: Investments 733,108 696,926 Student tuition and fees, net $256,633 — 256,633 247,662 Other assets 10,031 8,479 Government and private grants 32,583 — 32,583 29,868 Property, buildings, and equipment, net 643,191 612,838 Contributions 6,228 41,484 47,712 71,680 TOTAL ASSETS $1,517,454 1,487,304 Auxiliary enterprises 58,337 — 58,337 53,866 LIABILITIES AND NET ASSETS Sales by educational departments 10,294 — 10,294 10,164 LIABILITIES: Investment income 1,305 1,238 2,543 1,952 Accounts payable and accrued liabilities $88,917 75,422 Endowment income used in operations 6,086 22,314 28,400 27,443 Deferred revenue and deposits 41,471 41,776 Other income 36,462 — 36,462 28,688 Refundable federal loan grants 40,561 40,982 Net assets released from restrictions 35,964 (35,964) — — Notes and bonds payable, net 220,020 230,538 TOTAL OPERATING REVENUES 443,892 29,072 472,964 471,323 TOTAL LIABILITIES 390,969 388,718 OPERATING EXPENSES: NET ASSETS: Instruction 124,496 — 124,496 117,187 Without donor restrictions 416,803 402,284 Academic support and libraries 63,885 — 63,885 61,637 With donor restrictions 709,682 696,302 Research 42,500 — 42,500 38,296 TOTAL NET ASSETS 1,126,485 1,098,586 Student services 66,564 — 66,564 60,651 TOTAL LIABILITIES AND NET ASSETS $1,517,454 1,487,304 Auxiliary enterprises 51,500 — 51,500 46,285 See accompanying notes to consolidated financial statements. Institutional support 87,406 — 87,406 82,475 Public services 6,048 — 6,048 5,887 TOTAL OPERATING EXPENSES 442,399 — 442,399 412,418 OPERATING INCOME 1,493 29,072 30,565 58,905 NONOPERATING ACTIVITIES: Endowment (loss) gain in excess of amounts (1,113) 6,279 5,166 18,676 designated for current operations, net Other, net 14,139 (21,971) (7,832) (19,981) TOTAL NONOPERATING ACTIVITIES, NET 13,026 (15,692) (2,666) (1,305) CHANGE IN NET ASSETS 14,519 13,380 27,899 57,600 Net assets, beginning of year 402,284 696,302 1,098,586 1,040,986 Net assets, end of year $416,803 709,682 1,126,485 1,098,586
See accompanying notes to consolidated financial statements.
70 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 71 Consolidated Statements of Cash Flows YEARS ENDED JUNE 30, 2019 AND 2018
(Dollars in thousands) 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $27,899 57,600 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 39,433 37,292 Notes to Consolidated Financial Statements Discount amortization (983) (983) JUNE 30, 2019 AND 2018 | (DOLLARS IN THOUSANDS) Net realized and unrealized appreciation on investments (30,427) (40,719) Bad debt expense 1,638 7,839 Contributions for major capital projects including gifts in kind (5,468) (14,238) Contributions restricted for long-term endowments (20,805) (21,400) (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 (241) (414) ACCOUNTING POLICIES information regarding the university’s assets and liabilities. Actual results Loss on sale of property, buildings, and equipment 1,645 112 (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 164 (805) assets: without donor restrictions forprofit institution of higher learning Cash equivalents with original and with donor restrictions. Pledges receivable (5,916) (3,436) and research located in Milwaukee, maturities of three months or less Other assets, net (1,615) (1,543) Wisconsin, formally opened in 1881 (i) Without Donor Restrictions are classified as cash and cash equivalents, except those amounts Accounts payables and other liabilities 8,768 (3,509) and conducted under the auspices of Net assets that are not subject held by investment managers, which Deferred revenue and deposits (305) (8,050) the Society of Jesus. The university to donorimposed restrictions. provides education and training are classified as investments. The NET CASH PROVIDED BY OPERATING ACTIVITIES 13,787 7,746 services, primarily for students (ii) With Donor Restrictions 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 (73,721) (109,086) and professional degree programs donor restrictions that will be these instruments. Proceeds from sale of property, buildings, and equipment 27 20 and performs research, training met either by actions of the Student loans repayments 7,964 7,476 and other services under grants, university or the passage of time. (E) PLEDGES RECEIVABLE contracts and other agreements with Unconditional promises to give are Student loans issued (2,705) (6,284) Also included in this category sponsoring organizations, including are net assets subject to donor recognized initially at fair value as Purchase of investments (149,846) (225,965) both government agencies and private imposed restrictions to be contribution revenue in the period Proceeds from the sale of investments 151,357 300,681 enterprises. maintained permanently by the the promise is made by a donor. The NET CASH USED IN INVESTING ACTIVITIES (66,924) (33,158) fair value of the pledge is estimated The consolidated financial statements university, wherein the donor based on anticipated future cash CASH FLOWS FROM FINANCING ACTIVITIES: include Flora Real Properties LLC stipulates that the corpus of the payments discounted using a risk Contributions received for major capital projects 5,192 13,646 (Flora). Flora is fully controlled by the gift be held in perpetuity and the adjusted rate commensurate with the university through 100% ownership. income from those assets be Proceeds from contributions restricted for long term endowments 27,600 14,494 duration of the planned payments. In Flora operates commercial real estate made available for scholarships Permanently restricted endowment income used in operations 241 414 subsequent periods, the discount rate activities in the university campus or program operations. (Decrease) increase in refundable federal loan grants (421) 252 is unchanged. Pledges receivable are area. (C) USE OF ESTIMATES net of an allowance for uncollectible Repayment of notes and bonds payable (9,535) (9,313) The preparation of consolidated (B) BASIS OF PRESENTATION amounts. Allowance of uncollectible NET CASH PROVIDED BY FINANCING ACTIVITIES 23,077 19,493 financial statements in conformity The consolidated financial statements pledges is calculated based upon the NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (30,060) (5,919) with GAAP requires management of the university have been prepared university past collection experience. to make estimates and assumptions Cash, cash equivalents and restricted cash, beginning of year 63,264 69,183 in conformity with U.S. generally The allowance is reassessed and that affect the reported amounts Cash, cash equivalents and restricted cash, end of year $33,204 63,264 accepted accounting principles adjusted as necessary. (GAAP). of assets, liabilities, revenues, and Supplemental disclosure of cash flow information Cash paid for interest $9,782 10,072 Change in construction payables 1,913 (3,610) Capital gifts in kind 278 592
See accompanying notes to consolidated financial statements.
72 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 73 (F) STUDENT ACCOUNTS AND LOANS RECEIVABLE, NET Construction in progress includes the following as of June 30, 2019 and 2018: At June 30, student accounts and loans receivable consisted of the following: (dollars in thousands) (dollars in thousands) 2019 2018 2019 2018 Freshman/Sophomore housing $— 99,518 Federal government loan programs $33,268 38,608 Athletic Human Performance Research Center — 5,517 Institutional loan programs 1,443 1,361 Al McGuire Center upgrades — 1,224 Student receivables 7,020 7,144 Physician Assistant Building 13,679 1,056 Grants receivables 4,939 4,763 Johnston Hall renovations 1,119 — Other receivables 3,852 4,351 Other renovation and construction projects 7,096 2,385 SUBTOTAL 50,522 56,227 TOTAL CONSTRUCTION IN PROGRESS $21,894 109,700 LESS ALLOWANCES FOR DOUBT ACCOUNTS (3,037) (2,500) STUDENT ACCOUNTS AND LOANS RECEIVABLE, NET $47,485 53,727 (I) CAPITAL GIFTS TO ACQUIRE OR between nonoperating and operating are generally refundable to the CONSTRUCT LONG-LIVED ASSETS sections of the changes in net assets government. Capital gifts to acquire or construct The university records an allowance exist, the net asset value is used as a donation including, where appropriate, without donor restrictions in the (K) STUDENT TUITION AND FEES longlived assets are recorded as a for uncollectible accounts when, practical expedient in estimating fair capitalized interest. Property and consolidated statement of activities. Student tuition revenue is recognized gift with donor restriction until the in management’s judgment, it is value, based on information provided equipment under capital leases are (J) REFUNDABLE FEDERAL LOAN in the fiscal year in which the related asset is placed in service, probable a portion of the receivable or by fund managers or general partners. initially valued and recorded on the GRANTS academic programs are delivered. at which time the capital gift is loan will not be collected. Allowances The estimated values are reviewed present value of minimum lease The university participates in the Scholarships reduce the amount released from net assets with donor for doubtful accounts are established and evaluated by the university. Due payments. The university depreciates Perkins, Health Professionals Student, of revenue recognized. Students restrictions to net assets without based on prior collections. Balances to the inherent uncertainty of these buildings, building improvements, Nursing Student, Nurse Faculty, who withdraw may receive a full or donor restrictions as other non are written off when they are deemed estimates, these values may differ land improvements, equipment, ARRANurse Faculty, and Loans partial refund in accordance with the operating activity and subsequently to be permanently uncollectible. materially from the values that would library contents and eBooks over the for Disadvantaged Student federal university’s refund policy. amortized into operations over the (G) INVESTMENTS have been used had a ready market estimated useful lives of the assets revolving loan programs. The university estimated useful life of the acquired or Deferred tuition revenue and deposits Investments are reported at fair for these investments existed. (25 to 50, 10 to 20, 10 to 20, 5 to 7, holds certain amounts advanced from constructed asset. This amortization, represents payments for summer value based on market quotes (H) PROPERTY, BUILDINGS, AND 20 and 20 years, respectively) using the federal government to facilitate which amounted to $6,568 in fiscal term courses conducted in July and with unrealized gains and losses EQUIPMENT, NET the straightline method. Leasehold these loan programs. In the event year 2019 and $6,390 in fiscal year August along with deposits for the fall thereon included in the consolidated Property, buildings, and equipment improvements are amortized over the the university no longer participates, 2018, is recorded as a reclassification academic term. statements of activities. When a ready are recorded at cost at date of shorter of the expected useful life of the amounts related to the program market for the investments does not acquisition or fair value at date of the asset or term of the related lease. The following tables depict activities for deferred revenue.
(dollars in thousands) Property, buildings, and equipment include the following at June 30, 2019 and 2018: CASH RECEIVED IN (dollars in thousands) BALANCE AT REVENUE ADVANCE OF BALANCE AT 2019 2018 JUNE 30, 2018 RECOGNIZED PERFORMANCE JUNE 30, 2019 Land and improvements $60,336 57,483 $8,612 8,612 8,575 8,575 Buildings and improvements 807,806 685,613 (dollars in thousands) Construction in progress 21,894 109,700 CASH Furniture, fixtures, and equipment 158,871 146,729 RECEIVED IN BALANCE AT REVENUE ADVANCE OF BALANCE AT Library contents 122,012 120,798 JUNE 30, 2017 RECOGNIZED PERFORMANCE JUNE 30, 2018 eBooks and other 17,882 13,613 $7,624 7,624 8,612 8,612 Less accumulated depreciation (545,610) (521,098) PROPERTY, BUILDINGS, AND EQUIPMENT, NET $643,191 612,838
74 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 75 The balance of deferred tuition assets without donor restrictions, restricted for that purpose. Valuations is placed in service; and recognition donor restrictions. The guidance net assets without donor restriction, revenue at June 30, 2019, will be except for activity associated with for some collections are updated of underwater endowment funds also enhances disclosure for board liquidity and expenses by both their recognized as revenue in the year endowment investments and certain periodically, and as such, the total of as a reduction in net assets with designated amounts, composition of natural and functional classification. ending June 30, 2020 as services are other nonrecurring transactions, all fine arts may vary with appraisals rendered. including adjustments to allowance and/or auction prices. for uncollectible contributions, A recap of the net asset reclassifications as a result of the adoption of ASU 201614 as of June 30, 2018 follows: The university applies the practical Accordingly, the values of fine art changes due to adopting new expedient in Accounting Standards and other collections has been accounting guidance, and other gains (dollars in thousands) Codification (ASC) 606105014 excluded from the statements of and losses. In accordance with the ASU 2016-14 CLASSIFICATIONS and therefore does not disclose financial position. Proceeds, if any, university’s endowment distribution WITHOUT DONOR WITH DONOR TOTAL NET information about performance deaccessions or insurance recoveries policy as described in note 4, only RESTRICTIONS RESTRICTIONS ASSETS obligations that have an origination are reflected as increases in the the portion of total investment Net asset classifications: and expected duration within the appropriate net asset classes. The return distributed under this policy fiscal year. art and other collections are subject As previously presented: to meet operating needs is included to a requirement that proceeds from Unrestricted $239,084 — 239,084 (L) AUXILIARY ENTERPRISES in operating revenue. Operating Auxiliary enterprises include revenues their sales be used to acquire other Temporarily restricted — 416,349 416,349 investment income consists of and expenses of the university for items for the collections. Fine arts are dividends, interest, and realized Permanently restricted — 443,153 443,153 room and board, parking services, included in insurance coverage for gains and losses on unrestricted NET ASSETS AS PREVIOUSLY PRESENTED 239,084 859,502 1,098,586 commercial property rentals and gift the university property and a separate nonendowed investments. Reclassifications of implemented ASU 2016-14: shops. policy is also secured for fine art of (O) INCOME TAXES high value and where appraised values Capital gifts for construction 162,289 (162,289) — (M) CONTRIBUTIONS The university is exempt from federal are listed. As of June 30, 2019, the Underwater endowments 911 (911) — Contributions, including unconditional income tax under Section 501(c)(3) specific policy covering highly valued promises to give (pledges), are NET ASSETS, AS RECLASSIFIED $402,284 696,302 1,098,586 of the Internal Revenue Code and works provides for insured coverage recorded as operating revenue. Gifts, Section 71.26(1)(a) of the Wisconsin of $100,000 aggregate limit (subject excluding artwork, are recognized in statutes and is generally not subject to policy sublimitincluding $3,000 the appropriate category of net assets to federal and state income taxes. for the Joan of Arc Chapel) for any During 2019, the university adopted total of cash, cash equivalents, and detail to constitute a presentation in in the period received. Contributions However, the university is subject one loss or any one occurrence and ASU 2014-09 Revenue from Contracts amounts generally described as conformity with GAAP. Accordingly, are recorded at their estimated fair to income taxes on any income that includes some appraised items from with Customers (Topic 606). This restricted cash or restricted cash such information should be read in value at the date the gift is received. is derived from a trade or business the library collections. guidance is intended to remove equivalents. See note 8. conjunction with the university’s Contributions receivable due beyond regularly carried on, and not in inconsistencies and weaknesses in consolidated financial statements for (Q) RECENT ACCOUNTING ASU 2016-02 Leases (Topic 842) is one year are stated at estimated net revenue requirements, provide a more the year ended June 30, 2018 from furtherance of the purposes for PRONOUNCEMENTS intended to increase transparency and present value, net of an allowance, robust framework for addressing which this information was derived. which it was granted exemption. During 2019, the university adopted comparability among organizations by and recorded as net assets with donor revenue issues, improve comparability In addition, certain reclassifications There was no provision for income Accounting Standards Update recognizing right of use assets and restrictions until cash payments are of revenue recognition practices, have been made for consistency to taxes due on unrelated business (ASU) No. 2016-14—Not-for-Profit lease liabilities on the balance sheet received and donor restrictions are provide more useful information to the current year presentation. income and there are no uncertain tax Entities (Topic 958) Presentation of and disclosing key information about fulfilled. Allowances and revisions to users of financial statements through positions considered to be material. Financial Statements of Not-for-Profit leasing arrangements. Under this previous year contributions based on improved disclosure requirements Entities. This guidance is intended to update, right of use assets and lease (2) AVAILABILITY OF FINANCIAL donor amendments or clarifications As of June 30, 2019, the university and simplify the preparation of improve the net asset classification liabilities are recognized for leases ASSETS FOR GENERAL of intent are reflected within the has a federal tax credit carryforward financial statements. As a result of requirements and the information with a term of 12 months or more. consolidated statements of activities of $3,531, which expires between this guidance, student tuition and fees EXPENDITURES presented in the financial statements The university is still evaluating the as a nonoperating item. Contributions fiscal years 2034 and 2038. are presented net of tuition discounts. and notes about a notforprofit entity’s impact and will adopt this update in Resources available to the university with donorimposed conditions are Other impact of this guidance to the (P) ART COLLECTION liquidity, financial performance, and the June 30, 2020 statements. to fund general expenditures, such not recognized unless it is reasonably statements is considered immaterial. The university has various collections cash flows. Main provisions of this as operating expenses, scheduled expected that the conditions can (R) COMPARATIVE FINANCIAL of fine arts and rare books in guidance include: presentation of During 2019, the university adopted principal payments on debt, and be met. INFORMATION AND museums, libraries, and on loan. two classes of net assets versus the ASU 2016-18 Statement of Cash RECLASSIFICATIONS internally funded capital costs have (N) OPERATING INCOME The university does not assign or previously required three; recognition Flows (Topic 230) Restricted Cash. The consolidated financial statements seasonal variations related to the Operating results in the consolidated record a value to art works and of capital gifts for construction as a This guidance requires that a include certain prior information timing of tuition payments, receipts statement of activities reflect other collections received as gifts net asset without donor restrictions statement of cash flows explain presented for comparative purposes, of gifts and pledge payments, and all transactions that change net or purchased with contributions when the associated longlived asset the change during the period in the which does not include sufficient transfers from the endowment.
76 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 77 The university actively manages its resources, utilizing a combination of short and longterm operating investment expected risk, returns and maturities commingled funds and private equity Accounting standards establish a fair strategies to align cash inflows with anticipated outflows. At June 30, 2019, existing financial assets and liquidity that mirror the anticipated timing of partnerships are valued using net value hierarchy that prioritizes the resources available within one year were as follows: construction project payment needs. asset value; however, it is possible inputs to valuation techniques used to Fair values of unexpended bond that the redemption rights of certain measure fair value. The hierarchy gives (dollars in thousands) proceeds securities are based on investments may be restricted by the highest priority to unadjusted Financial assets: prices provided by the trustee bank. the funds in the future in accordance quoted prices in active markets for Cash and cash equivalents $33,204 Unexpended bond proceeds include with the underlying fund agreements. identical assets or liabilities (Level 1 cash equivalents and fixed income Changes in market conditions and the measurements) and the lowest Accounts receivable and prepaid 17,095 securities where their fair values are economic environment may impact priority to measurements involving Pledges payments available for operations 5,065 based on observable market quotation the net asset value of the funds and significant unobservable inputs Working capital investments 1,000 prices. The trustee bank uses a variety consequently the fair value of the (Level 3 measurements). The standard Endowment spending payout 28,400 of pricing sources to determine university’s interests in the funds. describes three levels of inputs that market valuations of fixed maturity may be used to measure fair value: TOTAL FINANCIAL ASSETS AVAILABLE WITHIN ONE YEAR 84,764 Funds held in trust by others are securities. The specific pricing Liquidity Resources: based on quoted market prices Level 1: Observable inputs such services or indexes for each sector Bank line of credit 25,000 provided by its investment managers as quoted prices in active of the market are based upon the and custodian bank. Both the markets that the university TOTAL FINANCIAL ASSETS AND LIQUID RESOURCES AVAILABLE WITHIN ONE YEAR $109,764 provider’s expertise. The fixed maturity investment managers and the has the ability to access at securities are highly liquid, allowing custodian banks use a variety of the measurement date. the portfolio to be priced through Additionally, the university has $123,360 in boarddesignated funds functioning as endowment of which $101,905 can be pricing sources to determine market pricing services. Level 2: Inputs other than quoted valuations. Each designate specific liquidated within one year with Board approval, however, no liquidation is anticipated as of June 30, 2019. prices in active markets such Investments include money pricing services or indexes for each as quoted prices for similar funds, federal, state, local agency, sector of the market based upon the (3) INVESTMENTS assets or liabilities; quoted nongovernment, asset and mortgage provider’s expertise. The securities prices in markets that are A summary of the university’s investment return net of expenses is presented below for the years ended June 30, 2019 backed and foreign fixed income portfolio is highly liquid, generally not active; or other inputs and 2018: securities, stocks, mutual funds, allowing the portfolio to be priced that are observable or can be commingled funds, real estate, through pricing services. corroborated by observable (dollars in thousands) multistrategy hedge funds and Payables under the securities lending market data for substantially 2019 2018 private equity partnership and agreement are included in accounts the full term of the assets or membership interests. Investments Interest and dividends $5,851 7,352 payable and accrued liabilities on liabilities. are based on valuations provided Gain on investments, net 30,258 40,719 the consolidated statements of by external investment managers Level 3: Unobservable inputs where RETURN ON INVESTMENTS $36,109 48,071 financial position and are based on and the custodian banks. Valuations there is little or no market quoted market prices provided by provided by external investment data and requires the the custodian bank. The custodian managers and the custodian bank reporting entity to develop banks use a variety of pricing sources The fair value of the university’s market quotation prices provided be priced through pricing services. include observable market quotation its own assumptions and to determine market valuations. financial instruments is determined by investment managers and the As of June 30, 2019 and 2018, the prices, observable inputs other than includes funds held in trust Observable market quoted prices and using the valuation methods and custodian bank at the reporting date. university had loaned securities with a quoted prices such as price services by others. assumptions as set forth below. market value of $22,724 and $15,574, specific pricing services or indexes Funds held in collateral under the or indexes, estimates, appraisals, The university’s policy is to reflect While the university believes that its respectively, that were secured by are used to value investments. The securities lending agreement are assumptions and other methods that transfers between levels at the end valuation methods are appropriate collateral with a market value of securities portfolio is highly liquid, recorded at fair market value based are reviewed by management. Real of the year in which a change in and consistent with those of approximately $23,216 and $15,951, generally allowing the portfolio to be on quoted market prices provided by estate, multistrategy hedge funds, circumstances results in the transfer. other market participants, the respectively. The collateral received in priced through pricing services. the custodian bank. The custodian use of different methodologies or connection with the security lending banks use a variety of pricing sources assumptions to determine the fair program and the obligation to return to determine market valuations. value of certain financial instruments such collateral are reported as an Observable market quoted prices and could result in a different fair value at asset and liability, respectively, in the specific pricing services or indexes the reporting date. consolidated financial statements. are used to value investments. The Fair values of cash and cash securities portfolio is highly liquid, Unexpended bond proceeds are equivalents are based on observable generally allowing the portfolio to invested in various securities based on
78 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 79 The following table presents the university’s financial instruments at fair value as of June 30, 2019. The categorization The following table presents the university’s financial instruments at fair value as of June 30, 2018. The categorization of financial instruments within the hierarchy is based on price transparency and does not necessarily correspond to the of financial instruments within the hierarchy is based on price transparency and does not necessarily correspond to the perceived risk of the instruments. perceived risk of the instruments.
(dollars in thousands) (dollars in thousands) TOTAL LEVEL 1 LEVEL 2 LEVEL 3 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 June 30, 2019: June 30, 2018: ASSETS: ASSETS: Recurring: Recurring: Cash and cash equivalents $33,204 33,204 — — Cash and cash equivalents $63,264 63,264 — — Investments: Investments: Money funds and other 36,441 36,441 — — Money funds and other 41,560 41,560 — — Federal, state, and local agency securities 3,979 — 3,979 — Federal, state, and local agency securities 9,408 — 9,408 — Nongovernment bonds and notes 3,322 — 3,322 — Nongovernment bonds and notes 4,293 — 4,293 — Asset and mortgage-backed securities 426 — 426 — Asset and mortgage-backed securities 376 — 376 — Foreign bonds and notes 738 — 738 — Foreign bonds and notes 532 — 532 — Common and preferred stocks 50,301 50,301 — Common and preferred stocks 45,294 45,294 — — Mutual funds—bonds 37,208 37,208 — Mutual funds—bonds 33,067 33,067 — — Mutual funds—equity 103,786 103,697 89 — Mutual funds—equity 100,012 100,012 — — Collateral held under securities lending agreement 23,216 — 23,216 — Collateral held under securities lending agreement 15,951 — 15,951 — Investments measured at net asset value 473,691 — — — Investments measured at net asset value 446,433 — — — TOTAL INVESTMENTS 733,108 227,647 31,770 — TOTAL INVESTMENTS 696,926 219,933 30,560 — TOTAL ASSETS MEASURED AT FAIR VALUE ON RECURRING BASIS $766,312 260,851 31,770 — TOTAL ASSETS MEASURED AT FAIR VALUE ON RECURRING BASIS $760,190 283,197 30,560 — LIABILITIES: LIABILITIES: Recurring: Recurring: Payables under securities lending agreement $23,216 — 23,216 Payables under securities lending agreement $15,951 — 15,951 — TOTAL LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS $23,216 — 23,216 — TOTAL LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS $15,951 — 15,951 —
Fair value measurements of investments in certain entities that calculate net asset value per share (or its equivalent) as of Fair value measurements of investments in certain entities that calculate net asset value per share (or its equivalent) as of June 30, 2019 are as follows: June 30, 2018 are as follows:
(dollars in thousands) (dollars in thousands) NET ASSETS UNFUNDED REDEMPTION REDEMPTION NET ASSETS UNFUNDED REDEMPTION REDEMPTION FISCAL YEAR ENDED JUNE 30, 2019 VALUE COMMITMENTS FREQUENCY NOTICE PERIOD FISCAL YEAR ENDED JUNE 30, 2018 VALUE COMMITMENTS FREQUENCY NOTICE PERIOD Commingled funds $84,528 Weekly, Monthly 10–30 days Commingled funds $76,869 — Weekly, Monthly 1–10 days Multi-strategy hedge funds 271,606 Quarterly, 45–90 days Multi-strategy hedge funds 260,836 — Quarterly, Annually, 30–180 days Semi-annually, 2 years, 3 years, Annually, 5 years 2 years, 3 years, Private equity partnerships 90,409 54,798 Illiquid Liquidating Real estate limited partnership and 18,319 27,706 Illiquid Private equity partnerships 100,394 56,798 Illiquid membership interests Real estate limited partnership and 17,163 26,554 Illiquid $446,433 82,504 membership interests $473,691 83,352
80 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 81 (C) ENDOWMENT SPENDING POLICY (4) ENDOWMENT endowment fund seeks to generate (dollars in thousands) The primary objective of the spending a total return that will exceed (A) INTERPRETATION OF RELEVANT WITHOUT DONOR WITH DONOR LAW GOVERNING ENDOWMENTS policy is to provide a steady cash its annual spendable amount, all RESTRICTIONS RESTRICTIONS TOTAL flow stream while at the same The State of Wisconsin enacted expenses associated with managing Endowment net assets, beginning of year $123,638 554,770 678,408 time protecting the purchasing the endowment fund, and the eroding the Uniform Prudent Management Investment return: of Institutional Funds Act (UPMIFA) power of the endowment fund’s effects of inflation. It is the intention Investment loss — (17) (17) on July 20, 2009. This law provides, principal. Adopting the target rate that any excess return (interest among other things, expanded approach provides the university income, dividends, realized gains, and Endowment income used for spending policy 6,086 22,314 28,400 spending flexibility by allowing, with a levelspending plan. Spending unrealized gains), above and beyond Net realized and unrealized (losses) gains (365) 6,316 5,951 allotments will begin with the flat subject to a standard of prudence, the amount approved for expenditure TOTAL INVESTMENT RETURN 5,721 28,613 34,334 amount allocated to each individual or distribution, will be reinvested in the university to spend from an Appropriation of endowment assets for expenditure (6,087) (22,072) (28,159) endowment fund without regard to endowment fund balance as of the endowment fund. The endowment Contributions 88 20,805 20,893 the book value of the corpus. The June 30, 2004 that may grow each fund will be managed on a total return university classifies as net assets with year by an inflationary amount not to basis, consistent with the applicable ENDOWMENT NET ASSETS, END OF YEAR $123,360 582,116 705,476 donor restrictions (a) the original value exceed 3%. Spending allotments will standard of conduct set forth in of gifts donated to the permanent be increased by new gift additions UPMIFA. to the individual endowment funds Endowment net assets without donor restriction are “Investments functioning as endowment” that are not permanently endowment, (b) the original value of The endowment fund has a longterm receiving spending authority equal restricted by donors but are designated by the university for endowment purposes. The following represents the subsequent gifts to the permanent investment horizon with relatively to 5% of the new gift amount. composition and changes in endowment net assets for the year ended June 30, 2018: endowment, and (c) accumulations low liquidity needs. For this reason, to the permanent endowment made Compliant with UPMIFA, the the endowment fund can tolerate (dollars in thousands) in accordance with the direction of university will be allowed to prudently short and intermediateterm volatility WITHOUT DONOR WITH DONOR the applicable donor gift instrument. withdraw spendable funds even if provided that longterm returns meet RESTRICTIONS RESTRICTIONS TOTAL Also included in net assets with an endowment’s market value is less or exceed its investment objective. Endowment net assets, beginning of year $117,628 529,599 647,227 donor restrictions is accumulated than its historical book value. Any Consequently, the endowment fund Investment return: appreciation on endowment funds “return” that is not required to meet may take advantage of less liquid Investment loss — (42) (42) which are available for expenditure in a spending shall be retained in the investments, such as private equity, manner consistent with the standard endowment funds and invested in hedge funds, and other partnership Endowment income used for spending policy 5,887 21,556 27,443 of prudence established by UPMIFA. accordance with the investment policy vehicles, which typically offer Net realized and unrealized gains (losses) 5,940 3,399 9,339 (B) UNDERWATER ENDOWMENT FUNDS statement. higher riskadjusted return potential TOTAL INVESTMENT RETURN 11,827 24,913 36,740 From time to time, the value of A risk control mechanism will be as compensation for forfeiture of Appropriation of endowment assets for expenditure (5,887) (21,142) (27,029) assets associated with a permanently liquidity. To ensure adequate liquidity employed that keeps spending within Contributions 70 21,400 21,470 restricted fund may fall below the for distributions and to facilitate a range of 4–6% of market value in ENDOWMENT NET ASSETS, END OF YEAR $123,638 554,770 678,408 historical cost. Deficiencies of this order for the asset allocation policy to rebalancing, the university will nature are reported in net assets with work with a minimum target rate of conduct ongoing reviews of total donor restrictions. These deficiencies return of 8% (5% average spending fund liquidity. resulted from unfavorable market interest agreements are included not affiliated with the university. The and 3% inflation). Endowment net assets without (5) IRREVOCABLE SPLIT- conditions that occurred after the in investments on the consolidated university receives distributions from (D) ENDOWMENT INVESTMENT donor restriction are “Investments INTEREST AGREEMENTS AND investment of endowed contributions statement of financial position. the trusts. The fair value of the trusts POLICY functioning as endowment” that are FUNDS HELD IN TRUST BY and from appropriations to certain was $27,269 and $22,063 at June The endowment fund’s investment not permanently restricted by donors A liability for splitinterest obligations programs. As of June 30, 2019 and OTHERS 30, 2019 and 2018, respectively, and objective is to preserve its purchasing but are designated by the university is recorded when the agreement 2018, funds with fair market value of are included in investments on the power while providing a continuing for endowment purposes. The The university’s splitinterest is established at the estimated net $31,099 and $25,933, an original gift statement of financial position. and stable funding source to support following represents the composition agreements with donors consist present value of future cash flows value of $32,358 and $26,844 were the overall mission of the university. and changes in endowment net assets primarily of charitable gift annuities, using a riskadjusted discount rate For those agreements where the underwater by $1,259 and $911, To accomplish this objective, the for the year ended June 30, 2019: pooled income funds, and charitable commensurate with the duration of university does not serve as trustee, respectively. remainder trusts for which the the estimated payments. but is designated as an irrevocable university serves as trustee. Assets beneficiary of the trust, restricted The university is the beneficiary of are invested and payments are funds held in trust and revenue are trusts that, in accordance with the made to beneficiaries in accordance recognized for the present value of decedent’s instructions, are managed with the respective agreements. the estimated future benefits due Assets associated with split and maintained by separate trustees
82 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 83 to the university over the life of the (6) PLEDGES RECEIVABLE present value of estimated future Notes are issued under the Master Indenture and are equally and ratably secured by any lien created under the Master trust and when the trust is distributed. cash flows. The discounts on those Indenture. Pledges receivable expected to be The present value calculation of the amounts are computed using an collected within one year are recorded The notes and bonds payable are subject to various covenants. Management confirms the university is in compliance trust considers both the discount rate appropriate riskfree rate of return at net realizable value. Pledges with all covenants as of and for the years ended June 30, 2019 and 2018. and, if applicable, the estimated life on the date the promise to give is receivable expected to be collected expectancy of the trust originator. received. Amortization of the discount Maturities of notes and bonds payable based on scheduled repayments at June 30, 2019 are as follows: in future years are recorded at the is included in contribution revenues. (dollars in thousands) Fiscal Year 2020 $8,810 As of June 30, 2019, and 2018, the contributions receivable is due as follows: Fiscal Year 2021 9,175
(dollars in thousands) Fiscal Year 2022 9,565 2019 2018 Fiscal Year 2023 10,065 Less than one year $18,566 16,325 Fiscal Year 2024 10,540 Two to five years 35,944 39,513 Thereafter 152,215 Over five years 5,116 6,115 TOTAL $200,370 SUBTOTAL 59,626 61,953
Less unamortized discount (4,824) (5,562) As of June 30, 2019, the university has two secured letters of credit with banks under which it may borrow up to $3,101. Allowance for uncollectible accounts (4,367) (4,321) There were no borrowings outstanding under these letters of credit as of June 30, 2019 and 2018. PLEDGES RECEIVABLE, NET $50,435 52,070 As of June 30, 2019, the university has a $25,000 line of credit with a bank. There were no borrowings outstanding under this line of credit as of June 30, 2019. In addition, the university has received certain conditional promises to give that are in the form of revocable trusts, bequests and pledges. As of June 30, 2019 and 2018, the fair value of these conditional promises is approximately (8) RESTRICTED CASH AND INVESTMENTS $155,062 and $108,792, respectively. These amounts can be recognized as revenue in the periods in which the conditions The composition of assets restricted to investment in land, buildings and equipment as of June 30, 2019 and 2018 is are fulfilled. shown below.
(7) NOTES AND BONDS PAYABLE, NET (dollars in thousands) As of June 30, 2019, and 2018, notes and bonds payable consisted of the following: 2019 2018 Restricted cash $6,030 3,119 (dollars in thousands) Contributions receivable 11,209 9,119 2019 2018 Investments 1,000 4,665 Revenue Bonds, Series 2008B1, payable with fixed interest rates ranging from $14,280 15,360 TOTAL ASSETS RESTRICTED FOR INVESTMENT IN LAND, BUILDING AND EQUIPMENT $18,239 16,903 2.00% to 5.00%, maturing through 2030 Revenue Bonds, Series 2008B2, payable with fixed interest rates ranging from 9,030 9,670 2.25% to 5.00%, maturing through 2030 The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated Revenue Bonds, Series 2008B3, payable with fixed interest rates ranging from 16,060 17,185 statement of financial position that sum to the total of same amounts shown in the consolidated statement of cash flows. 2.00% to 5.00%, maturing through 2030 Revenue Bonds, Series 2011A, payable with fixed interest rates ranging from 5,680 8,345 (dollars in thousands) 2.00% to 5.00%, maturing through 2020 2019 2018 Revenue Bonds, Series 2012, payable with fixed interest rates ranging from 75,045 77,060 Cash and cash equivalents $27,174 60,145 2.00% to 5.00%, maturing through 2032 Restricted cash included in assets restricted to investment in land, 6,030 3,119 Revenue Bonds, Series 2016, payable with fixed interest rates ranging from 80,275 81,875 buildings and equipment 4.00% to 5.00%, maturing through 2047 TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH SHOWN $33,204 63,264 Other long-term payables with variable interest rate, maturing through 2019 — 409 IN THE STATEMENT OF CASH FLOWS SUBTOTAL 200,370 209,904 Unamortized premiums, discount and issuance costs 19,650 20,634 Assets restricted to investment in land, buildings and equipment include restricted cash equivalents received with a donor NOTES AND BONDS PAYABLE, NET $220,020 230,538 imposed restriction that limits the use of that cash to longterm purposes.
84 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 85 (9) RETIREMENT PLAN annual wages of participants, up to retired employees’ health, dental As of June 30, 2019, the university has outstanding commitments for the following construction projects: defined limits. In addition, oluntv ary and vision costs. Under the plans, All eligible fulltime and parttime contributions by participants may be the university’s losses are limited, (dollars in thousands) personnel who meet the waiting made subject to Internal Revenue through the use of excess loss Physician assistant building $3,823 period criteria, may elect to participate Service limitations. Payments for insurance, to $350 per claim. Claims in a defined contribution individual Central chilled water 2,427 contributions to this plan totaled paid under the plans for fiscal years retirement plan. Under the provisions McCormick demolition 1,535 $11,522 and $11,675 in fiscal years 2019 and 2018 totaled $27,766 and of the plan in order to receive the TOTAL CONSTRUCTION COMMITMENTS $7,785 2019 and 2018, respectively. $28,728, respectively. The university university’s matching contribution, has also contracted with third participants are required to contribute party administrators to provide 5% of their annual wages to the (10) SELF-FUNDED HEALTH, The university leases athletic and other facilities and equipment under noncancelable arrangements that are accounted administrative services for the plans. plan. The university has neither DENTAL AND VISION BENEFIT for as operating leases. Total future commitments under these leases as of June 30, 2019 are as follows: Accrued liabilities include an estimate administrative responsibilities nor PLANS of the university’s liability for claims (dollars in thousands) any financial liabilities under this incurred but not paid through June 30, plan except to make contributions, The university has selffunded benefit FY20 $1,420 2019 and 2018. currently limited to 8% of the plans covering all active and certain FY21 1,399 FY22 1,295 FY23 1,333 (11) NET ASSETS FY24 1,275 Net assets consist of the following as of June 30, 2019 and 2018: Thereafter 13,344 TOTAL FUTURE COMMITMENTS $20,066 (dollars in thousands) 2019 2018 Without donor restrictions: (13) EXPENSES Board designated endowments $123,360 123,638 Other net assets without donor restrictions 293,443 278,646 The university’s primary programs are instruction, research, and public service. Academic support and libraries, student services, and auxiliary enterprises are considered integral to the delivery of these programs. Athletics expenses are TOTAL WITHOUT DONOR RESTRICTIONS 416,803 402,284 included in student services. Costs related to the operation and maintenance of physical plant, including depreciation of With donor restrictions: plant assets, are allocated to operating programs and supporting activities based upon square footage. Interest expense Academic support, instruction and student services 309,513 298,844 on external debt is allocated to the activities that have most directly benefited from the debt proceeds. Natural expenses Contributions receivable, net 50,435 52,070 allocated by function for the years ended June 30, 2019 and 2018 are as follows: Scholarships 334,486 316,188 (dollars in thousands) Life income and annuity funds 6,653 6,939 2019 Other net assets with donor restrictions 8,595 22,261 SUPPLIES, TOTAL WITH DONOR RESTRICTIONS 709,682 696,302 REPAIRS, OPERATIONS UTILITIES AND TOTAL NET ASSETS $1,126,485 1,098,586 COMPENSATION AND OTHER INTEREST DEPRECIATION MAINTENANCE TOTAL Instruction $98,581 11,029 2,023 — 12,863 124,496 Academic support and libraries 38,560 12,218 334 — 12,773 63,885 (12) COMMITMENTS AND CONTINGENCIES Research 25,204 15,792 — 467 1,037 42,500 The university is involved in various litigation arising in the normal course of operations. On the basis of information Student services 33,029 24,822 440 — 8,273 66,564 presently available and the advice of legal counsel, management is of the opinion that any liability, to the extent not Auxiliary enterprises 5,428 21,006 3,184 — 21,882 51,500 provided for through reserves or otherwise, for pending litigation is not expected to be material in relation to the Institutional support 57,724 20,590 1,198 246 7,648 87,406 university’s financial position or activities. Public services 4,878 1,059 4 — 107 6,048 Operations and maintenance 9,585 15,889 389 38,720 (64,583) — TOTAL OPERATING EXPENSES $272,989 122,405 7,572 39,433 — 442,399
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(dollars in thousands) 2018 SUPPLIES, REPAIRS, OPERATIONS UTILITIES AND COMPENSATION AND OTHER INTEREST DEPRECIATION MAINTENANCE TOTAL Instruction $93,460 9,272 2,005 — 12,450 117,187 Academic support and libraries 37,074 12,213 345 — 12,005 61,637 Research 24,346 12,810 — 302 838 38,296 Student services 30,955 21,326 474 — 7,896 60,651 Auxiliary enterprises 5,117 20,169 1,985 — 19,014 46,285 Institutional support 55,638 16,405 882 246 9,304 82,475 Public services 4,555 1,207 3 — 122 5,887 Operations and maintenance 10,132 14,458 295 36,744 (61,629) — TOTAL OPERATING EXPENSES $261,277 107,860 5,989 37,292 — 412,418
(14) RESEARCH AND GRANT COSTS The university receives grant and contract revenue from various government agencies and private sources for the support of research, training, and other sponsored programs. Revenues associated with the direct costs of these programs are 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 2019 and 2018 comprise of the following:
(dollars in thousands) 2019 2018 Sponsored research $32,159 27,993 Teaching and training 6,162 6,369 Development and others 4,179 3,934 TOTAL RESEARCH AND GRANTS $42,500 38,296
(15) SUBSEQUENT EVENTS The university evaluated events after the consolidated statement of financial position date of June 30, 2019 through September 6, 2019, which was the date the consolidated financial statements were issued, noting no subsequent events requiring recording or disclosure in the consolidated financial statements or related notes to the consolidated financial statements.
88 MARQUETTE UNIVERSITY ANNUAL REPORT FY2019 89 UNIVERSITY OFFICIALS
BOARD OF TRUSTEES UNIVERSITY LEADERSHIP
Todd A. Adams, President Raymond J. Manista, Thomas H. Werner, Eng ’86, John P. Madden, Bus Ad ’56 EXECUTIVE Tim McMahon, Dr. Sarah Feldner, and Chief Executive Officer, Arts ’87, Law ’90, Executive CEO and Chairman of the LEADERSHIP Vice President, J. William and Mary Diederich Dr. Arnold L. Mitchem, Rexnord Corporation Vice President, Chief Legal Board, SunPower Corporation University Advancement College of Communication Grad ’81 Dr. Michael R. Lovell, Officer and Secretary, (Acting) Joanna M. Bauza, Hon. James A. Wynn, Jr., President Northwestern Mutual Rev. Joseph M. O’Keefe, S.J. Rev. Joseph G. Mueller, S.J., Bus Ad ’97, President, Law ’79, Judge, U.S. Court of Rector, Dr. Heather Hathaway, Dr. Kimo Ah Yun, The Cervantes Group Rev. Patrick McGrath, S.J., Appeals for the Fourth Circuit James D. O’Rourke, Bus Ad ’87 Marquette Jesuit Community Helen Way Klingler Acting Provost and President, Loyola Academy College of Arts and Sciences Tim M. Bergstrom, Rev. Michael A. Zampelli, Rev. Ladislas M. Orsy, S.J. Corporate Vice President Dr. Gary Meyer, Senior Vice Bus Ad ’99, President and Kelly McShane, Arts ’68, S.J., Associate Professor of (Acting) Ulice Payne, Jr., Bus Ad ’78, Provost, Faculty Affairs Chief Operating Officer, Retired School Psychologist Theatre and Dance, Santa Joel Pogodzinski, Bus Ad ’94, Law ’82 Dr. William A. Henk, Bergstrom Automotive Clara University Senior Vice President, Dave Murphy, Vice President, Rev. Thomas W. Neitzke, S.J., College of Education Kristine A. Rappé Chief Operating Officer, and Marketing and Communication Robert J. Eck, Arts ’80, President, Creighton EMERITI TRUSTEES Corporate Treasurer Joseph D. Kearney, Preparatory School Claudia Paetsch, Vice Chair; Retired CEO, Joseph J. Rauenhorst, Law School Anixter International Inc. John A. Becker, Bus Ad ’63, Vice President, Janis M. Orlowski, M.D., Arts ’78 SENIOR Grad ’65 Human Resources Dr. Janet Wessel Krejci, Hon. Janine P. Geske, Eng ’78, Chief Health Care LEADERSHIP Glenn A. Rivers, Arts ’85 College of Nursing Laurie Panella, Bus Ad ’87 Law ’75, Retired Professor of Officer, Association of John F. Bergstrom, Bus Ad ’67 Rana Altenburg, Arts ’88, Law and Retired Justice of the American Medical Colleges James A. Runde, Eng ’69 Chief Information Officer Dr. William K. Lobb, Natalie A. Black, Law ’78 Vice President, Public Affairs Wisconsin Supreme Court School of Dentistry Rev. Michael Rozier, S.J., Louis J. Rutigliano, Eng ’60, William Scholl, Willie D. Davis Cindy Bauer, Arts ’79, Assistant Professor of Health Grad ’65 Vice President and Dr. Kristina M. Ropella, Jon D. Hammes, Managing Law ’83, Vice President, Partner, Hammes Company Management and Policy, Director of Athletics Opus College of John F. Ferrarro, Bus Ad ’77 Wayne R. Sanders, Grad ’72 Legal Counsel, and Eng ’85, Saint Louis University Engineering Nancy Hernandez, Richard J. Fotsch, Eng ’77, Mary Ladish Selander Corporate Assistant Secretary Lora Strigens, Vice President, Grad ’02, President, Hon. W. Greg Ryberg, Grad ’84 Planning and Facilities Janice S. Welburn, Mary Ellen Stanek, Dr. John Baworowsky, Hispanic Collaborative Arts ’68, Retired Senator, Arts ’78 Management University Libraries Rev. James G. Gartland, S.J. Vice President, State of South Carolina John J. Stollenwerk, Rev. Thomas A. Lawler, S.J., Sp ’62, Enrollment Management Dr. John Su, Vice Provost, Dr. Douglas W. Woods, Rev. Michael J. Graham, S.J. Assistant Director, Owen J. Sullivan, Arts ’79, Grad ’66 Academic Affairs Graduate School Dr. Xavier Cole, Jesuit Retreat House Chair; Chief Operating Officer, Rev. James E. Grummer, S.J. Hon. David A. Straz, Jr., Vice President, Student Affairs Dr. William Welburn, NCR Corporation SENATE Patrick S. Lawton, Mary E. Henke Bus Ad ‘65 Vice President, Dr. Maura Donovan, Bus Ad ’78, Grad ’80, Christopher J. Swift, Inclusive Excellence Dr. Sumana Chattopadhyay, Darren R. Jackson, Charles M. Swoboda, Vice President, Managing Director, Fixed Bus Ad ’83, Chairman of Chair, Bus Ad ’86 Eng ’89 Economic Engagement Rev. Fred Zagone, S.J., Income Capital Markets Group, the Board of Directors and University Academic Senate Acting Vice President, Robert W. Baird & Co. Chief Executive Officer, James F. Janz, Bus Ad ’62, Cherryl T. Thomas, Arts ’68 Steven W. Frieder, Mission and Ministry Dr. Yasser Khaled, The Hartford Law ’64 Rev. Thomas H. Tobin, S.J. Arts ’95, Senior Advisor Rev. Brian F. Linnane, S.J., Vice Chair, to the President, and President, Loyola University Peggy Troy, Nurs ’74, Jeffrey A. Joerres, Rev. L. John Topel, S.J., DEANS University Academic Senate Maryland President and Chief Executive Corporate Secretary Bus Ad ’83 Arts ’73 Officer, Children’s Wisconsin Dr. William E. Cullinan, Cliona Draper, Dr. Michael R. Lovell, Ian Gonzalez, Bus Ad ’02 Robert L. Kemp, Bus Ad ’54 Rhona Vogel, Bus Ad ’76 PT ’81, College of Health Chair, Vice President, Finance President, Marquette Joseph A. Walicki, Sciences University Staff Senate James H. Keyes, Bus Ad ’62 Rev. Robert A. Wild, S.J. University President and Chief Executive Edith Hudson, Officer, Clarios Dr. Joseph Daniels, Carol Trecek, Vincent P. Lyles, Rev. Timothy R. Lannon, S.J. Anne A. Zizzo, Jour ’87 Chief, Marquette University College of Business Vice Chair, System Vice President James M. Weiss, Police Department Rev. Gregory F. Lucey, S.J. Administration (Acting) University Staff Senate of Community Relations, Arts ’68, Retired Senior Dr. Jeanne Hossenlopp, Advocate Aurora Health Care Portfolio Manager, John P. Lynch, Arts ’64 Vice President, Research Segall Bryant & Hamill and Innovation
Information current as of November 2019
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