We describe a performance budget planning model developed for a research university, comprised of a set of 88 key variables and 38 non-linear structural equations that describe interactions among them. These equations, based on the knowledge of research university’s financial working and theoretical considerations, relate expenditures and revenues to teaching and research operations. We demonstrate the value of this model for developing insight into the financial structure of the university. In particular, we show how the model aids in (1) comparing the effect of various policy alternatives on the performance of the university, (2) performing comparative statics analysis of any subset of variables of interest, (3) choice of policy variables and policy alternatives, and (4) gaining insight into the structure of the interactions for a given policy alternative in terms of the causal chain between policy variables and outcome variables. We also describe a computer implementation of the model and discuss a class of mathematical tools for policy planning analysis that facilitate the use and manipulation of models based on sets of nonlinear constraints.