Future of Division III

[Ryan Scott (Hoops Fan)]

Brandeis is a perfect example.  According to their 990s they have lost tens of millions of dollars every year since and including 2020 - anywhere from $20.5M to nearly $60M annually, including a $52M loss in 2025, yet their net assets have increased during that time from $1.23B to $1.52B.  The bulk of their assets are long-term investments (nearly $1.4B) and funds held by trustees or others ($146M), so despite the annual losses on paper they're probably not going anywhere, at least in the near term.  It's probably not one of the 15 he quantifies as at risk, but you don't know - and neither does anyone reading the article that mentions them prominently. 

Let me start by saying I'm no expert. It seems to me reading some of these reviews on  the financial health of a school they distinguish net assets between restricted and unrestricted. Unrestricted being more flexible to use. Earnings from restricted assets are considered restricted also. In Brandeis's case in their last 990 around $1.3 billion of their net assets are restricted. So if you're burning thru your unrestricted net assets what options do you have in leveraging restricted net assets?

My understanding is that this isn't cut and dry.  Often, donors and schools will enter into a legal arrangement, especially for large endowments or gifts - those restrictions are often unbreachable for the school.  We have seen, recently, courts allow schools to access restricted funds, especially in cases of institutional health and survival - no reason to close a school if there are reasonable means to avoid it.  Whether courts would allow this kind of thing just to bridge budget gaps from year to year seem less likely.

When I've worked for non-profits (much of my professional life), I've always pushed for official policies that provide some caveats to restricted funds - that the organization could deviate from the express purpose if the need no longer existed, for example - or if there was a broader similar need that could be met - always to put the overall health of the organization above a specific purpose.

Now that's not been tradition in higher education and I'm sure those sorts of things would go over less well in that area, but that's why good schools put a lot of emphasis on donor relations - to make sure the relationships are healthy for times when it's really needed.

[smedindy]

But we need to recall the state of the colleges in the article that sparked this conversation. These are institutions that are struggling financially, to the tune of being forced to break some of the ironclad rules of sustainability.

They, and the hundreds of other colleges facing closure/merger in the next decade don't have the luxury of slowly nurturing small relationships and waiting decades for the payoff.

It's not that the random $100 isn't appreciated, it's that it can't do what you need it to.

Many times grantors in private Foundations or Corporations also look at alumni giving percentage, and that can be immediate short term gains. I'm convinced a lot of the troubled colleges didn't kick their fundraising gears up until it was too late. That's especially true, it seems, of colleges associated with a church.