The University of Michigan, an encyclopedic survey ... Wilfred B. Shaw, editor.
University of Michigan.

Current Operating Funds

In the period from 1940 to 1977, the amount of annual revenues for current operations has increased from $12,500,000 to $424,500,000.

Three sources of revenue have grown much more significantly than other sources during this long period. Federal support was practically nonexistent in 1940 but has now become a significant part of the revenue pattern, amounting to $72,500,000 in 1976-77 or 17 percent of all revenue for operations. Gifts and other grants have grown by a ratio of fifty times the 1940 level, and the University in recent years has won national recognition for its gift development and gift receiving program. Hospital service costs have risen so rapidly in the last few years and types of services have also so increased that the revenue for this activity is now 46 times that of 1940.

Student fee revenue has maintained the same relationship to the total as existed in 1940. State appropriations, however, have decreased in their share of support for educational and general programs.

The following table of revenues by source in ten-year comparisons since 1940 describes the various major categories of current operations support: Page  13

CURRENT FUNDS REVENUES BY SOURCE
(dollars in thousands)
1939-40 1949-50 1959-60 1969-70 1976-77
Educational and General
Student fees $ 1,812 $ 6,542 $ 9,466 $ 29,562 $ 63,001
State appropriations 4,610 11,436 33,687 68,578 114,737
Federal contracts and grants 15 3,188 23,027 60,754 72,500
Gifts and other grants 419 1,102 5,039 16,875 20,726
Investment income 638 779 2,196 6,081 9,382
Departmental activities 432 1,738 3,746 7,585 15,908
Less restricted revenues held for future expenditure ( 2,596) 381 ( 2,553)
Total Educational and General $ 7,926 $24,785 $ 74,565 $189,816 $293,701
Auxiliary Activities
Hospitals and medical services $ 2,177 $ 6,443 $ 14,065 $ 42,333 $100,697
Student residences and centers 2,075 5,139 9,735 14,748 20,861
Athletics, student publications and other 408 1,827 2,625 5,366 9,199
Total Auxiliary Activities $ 4,660 $13,409 $ 26,425 $ 62,447 $130,757
Total Revenue $12,586 $38,194 $100,990 $252,263 $424,458

Page  14The changing functions of the University over the years are reflected in the unusual relative growth of funded research expenditures and student-aid payments. In addition, support services expenditures have increased due to the complexity of present programs for students, faculty, and staff, compared to 1940. Details of expenditures by program are shown for ten-year periods from 1940 in the following table: Page  15

CURRENT FUNDS EXPENDITURES BY PROGRAM
(dollars in thousands)
1939-40 1949-50 1959-60 1969-70 1976-77
Educational and General
Instruction and departmental research $ 4,619 $10,900 $ 29,403 $ 72,926 $127,813
Other educational services 88 248 663 2,708 6,253
Libraries 372 879 2,048 5,989 8,961
Organized research 207 4,639 24,253 52,421 66,782
Extension 131 516 1,075 1,957 2,847
Student services 332 905 2,982 4,744 7,860
Student aid 185 693 2,142 17,069 21,852
Public services 30 535 1,461 3,359 3,908
General administration 651 1,494 899 1,958 5,202
Business operations 116 704 1,569 5,728 8,239
Operations and maintenance of plant 921 2,175 5,420 12,195 27,255
Plant improvement 6 500 2,499 9,989 7,155
Total Educational and General $ 7,658 $24,188 $ 74,414 $191,043 $294,127
Auxiliary Activities
Hospitals and medical services $ 2,045 $ 6,388 $ 13,878 $ 42,510 $ 98,211
Student residences and centers 1,854 4,931 9,875 14,645 21,040
Athletics, student publications and other 408 2,020 2,672 6,139 8,859
Total Auxiliary Activities $ 4,307 $13,339 $ 26,425 $ 63,294 $128,110
Total Expenditures $11,965 $37,527 $100,839 $254,337 $422,237

Page  16Higher education expenditures are characterized as salary-intensive. The following table compares ten-year periods from 1940 for current funds expenditures as reported by object classifications. Direct salary expenditure as a share of the total is relatively stable, ranging from 60 to 66 percent over the years. The institution of significant staff benefit programs over the years has resulted in a total compensation percent of over 70 percent in 1976-77.

Current Funds
Expenditures by Object Classification
(dollars in thousands)
1939-40 1949-50 1959-60 1969-70 1976-77
Salaries $ 7,685 $24,987 $ 66,098 $155,300 $254,158
Staff Benefits -0- 985 4,477 17,521 41,959
Nonsalary 4,280 11,555 30,264 81,516 126,120
Total $11,965 $37,527 $100,839 $254,337 $422,237