A Reminder Regarding Fundraising Versus Enrollment Revenue Generated from Growth
John W. Dysart
The Dysart Group, Inc.
College and university presidents are right-fully focused on finding new revenue sources during these challenging economic times. Many are pursuing traditional paths such as tuition increases, attempts to reduce discount rates, capital campaigns and other fundraising initiatives.
While enrollment increases seem a somewhat obvious option to increase revenue, presidents often hesitate to invest in this option. This topic occurred to me as I recently held discussions with enrollment management leaders at a couple of client institutions. We were discussing each institution’s success in significantly increasing enrollment and actually took a few minutes to calculate the net financial impact for the two schools. Both institutions have been pleased with their enrollment growth, but no one had ever actually calculated how the growth had translated into additional institutional revenue.
The numbers were surprising. We calculated only the additional revenue that could be tied directly to the enrollment growth. More new students turn into more returning students. We subtracted the costs of institutional financial aid that was offered to the growth students. At one university in the Midwest, more than $49 million in net revenue was generated in less than four years. At the southern college, enrollment growth amounted to an additional $53 million in net revenue over a five-year period. In both cases, the funds generated through growth trounced the totals raised by the development offices over the same period.
College and university presidents should be aware of the financial implications when increasing enrollment. Additional funds can enable investments in the institutional product like additional faculty and staff, enhanced co-curricular offerings and improvements or additions to the physical plant.