Will the economic downturn be the great equilizer in higher education? JGA Senior Executive Consultant Kris Kindelsperger addresses that question in his most recent article, published in the Indianapolis Business Journal on June 22.

In the world of higher education, especially at private institutions, the conventional wisdom was always “the best and financially strongest institutions are those with the largest endowments.”  Strong fundraising over the past 20 years helped many institutions build large endowments, which became major sources of annual income. Large endowments were also viewed as “insurance” against the vagaries of economic downturns, protection against swings in enrollment, and a safety net from unforeseen financial emergencies or budget cuts by state legislatures. Bigger was always better when it came to endowments.

 

But life has changed in higher education and changed very rapidly. The value of most endowments, just like our portfolios and 401Ks, has plummeted and along with it many of its historical advantages. Today, institutions with the strongest “bottom lines” are likely to be those with strong management and business plans that work in today’s economy, not necessarily those with the strongest endowments.

 

To read the rest of Kris’s article, click here.

 

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