RubinBrown Colleges & Universities Stat Book | NOT-FOR-PROFIT INSTITUTIONS

INSTITUTION SCORES NOT-FOR-PROFIT

Revenue and Expense Analysis In the current economic climate, institutions face continued pressure to generate more revenue while keeping tuition rates low and increasing scholarships provided to students. The following analysis seeks to illustrate the trends in revenues and expenses over the last three fiscal years. Tuition Dependency Ratio The tuition dependency ratio illustrates how much tuition revenue contributes to the overall operating revenue of an institution. The average percentage of overall revenue generated by tuition revenue by not-for-profit institutions was 64.2% in FY16 and FY17. The score decreased slightly to 63.3% in FY18. On average the 36 public institutions reviewed by RubinBrown generated 35.0%, 33.9%, and 32.8% of their revenue from tuition in FY16, FY17 and FY18, respectively. Public institutions generally rely on state or local government aid for a significant portion of their revenue, and therefore not-for-profit institutions typically must have higher tuition rates to provide commensurate levels of service to their students. Contribution Ratios Contribution ratios seek to show how much of the total operating expenses are covered by certain types of revenue. In the following chart, it is noted not-for-profit institutions in FY18, on average, had a tuition and fees revenue contribution ratio of 62.6%, auxiliary revenue contribution ratio of 13.7% and a private gifts contribution ratio of 15.9%. The remaining 7.8% of expenses for institutions were either not covered or were covered by other revenues such as investment income. The chart also illustrates that institutions with

net assets greater than $100 million generally generate more revenue through tuition and fees and needed less contributions as a percentage of total revenue to cover operating expenses. Revenue Contribution Ratio Averages by Type of Institution Overall Average Net Assets >$100m Net Assets <$100m

Net Tuition & Fees

64.3% 71.7% 60.2%

Net Auxiliary

13.4% 8.9% 16.0%

Private Gifts

16.7% 10.5% 20.2%

FY16

Total Percentage

94.4% 91.1% 96.4%

Net Tuition & Fees

63.6% 71.1% 59.4%

Net Auxiliary

13.6% 8.9% 16.1%

Private Gifts

15.9% 9.1% 19.8%

FY17

Total Percentage

93.1% 89.1% 95.3%

Net Tuition & Fees

62.6% 70.1% 58.4%

Net Auxiliary

13.7% 9.0% 16.3%

Private Gifts

15.9% 9.8% 19.3%

FY18

Total Percentage

92.2% 88.9% 94.0%

Year-Over-Year Change in Net Tuition and Fees Revenue and Expenses The tables below illustrate that tuition and fees revenue increases have not met the increase in total expenses year-over-year as there is continued competition for enrollment in a climate of rising costs.

Year-Over-Year Percent (%) Change

Average

MO

KS

% with Increases % with Decreases

Tuition and Fees

0.58%

1.19%

-0.96%

52.8%

47.2%

2016 –2017

Total Expenses

1.88%

2.69%

1.38%

62.3%

37.7%

Tuition and Fees

0.85%

0.77%

2.47%

45.3%

54.7%

2017 –2018

Total Expenses

2.70%

2.78%

4.23%

66.0%

34.0%

5

RubinBrown Colleges & Universities Stats 2019