By David Adams | Echo
Editor's Note: In "The perfect storm," we discussed Taylor's $1 million budget shortfall for the 2014-15 year and the choices the university made to make up the difference. In this story, we will address some of the university's methods of pursuing long-term sustainability.
"Death spiral. Downward momentum. Difficult steps." These are a few terms Bloomberg used to describe the financial situation facing America's small, private universities. A dire prediction? As many as half of these universities (out of the 4,000 total) could fail in the next 15 years, according to Harvard Business School professor Clayton Christensen.
That deserves another descriptor from Bloomberg: "Depressing."
Taylor's financial health has been reasonably good in the past few years, thanks to stable enrollment and a growing endowment and donor base, according to Vice President for Finance and CFO Stephen Olson. But that doesn't mean Taylor is out of the woods.
"Here's one of my beliefs about business that I think applies to higher ed, too," Olson said. "There's really only three ways to be financially sustainable in the long run. One is to raise your price. One is to cut your costs. And the third one is to increase your market share."
Raising the price obviously isn't the best option for students and families, according to Olson, and the first round of cost-cutting has already taken place, with more likely to come in the coming years.
"So the other option is to grow the market share, which means either growing the total student population or perhaps becoming less enrollment-dependent, (primarily by) growing the endowment," Olson said.
Taylor continues to face a challenging and expensive market for recruiting students, as discussed in the previous article in this series. But despite the financial downturn of 2008, there have been more donations given in the last nine years than ever before, according to Vice President for University Advancement Ben Sells.
Since President Eugene Habecker's presidency began, the university has received $132 million in donations, including 11 gifts of $1 million or more, according to the Advancement office. Individual gifts from friends, parents, businesses and alumni totaled 163,838 in this period.
"In broad strokes, the university has been very fortunate (to receive) the gifts that have been given," Sells said. "We have a very loyal alumni (base). . . . They continue to share the core convictions of the university, and they continue to appreciate their own Taylor experiences."
Satisfied alumni, however, are not the only ingredient for a healthy endowment and donor base. Sells said Taylor has received fewer unrestricted gifts, which the university can use as it sees fit, in recent years. Instead, donors prefer to give to particular causes they value. The Advancement Office has responded by identifying key university needs and creating proposals for donors to support.
"Broadly developing a compelling case and then developing some very concrete proposals and then putting those proposals in front of people who would be captured by the vision about an endowment, for whatever it may be, could really advance the mission of the university," Sells said.
No target has been set for how large Taylor wants the endowment to grow in coming years, according to Sells, but the endowment will likely receive more priority after the Campus Center has been funded.