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Post by AustinHoya03 on Jan 29, 2015 10:59:31 GMT -5
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Post by Deleted on Jan 29, 2015 12:00:13 GMT -5
Is this just ROI or does it include gifts/donations?
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H2Oya 05
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Post by H2Oya 05 on Jan 29, 2015 12:21:30 GMT -5
Is this just ROI or does it include gifts/donations? Includes gifts and donations. The average increase was 15% and the median increase was 16.3%. Not to be too harsh, but if those are the average and mean, Georgetown’s 13.6% isn’t “healthy”. Less than half of the schools ahead of us are public, and one of those schools is George Washington.
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Post by Deleted on Jan 29, 2015 12:24:51 GMT -5
Is this just ROI or does it include gifts/donations? Includes gifts and donations. The average increase was 15% and the median increase was 16.3%. Not to be too harsh, but if those are the average and mean, Georgetown’s 13.6% isn’t “healthy”. Less than half of the schools ahead of us are public, and one of those schools is George Washington. True, especially when you consider the Mccourt gift of 100 million, unless none of that went to the endowment....
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Post by aleutianhoya on Jan 29, 2015 12:34:41 GMT -5
Includes gifts and donations. The average increase was 15% and the median increase was 16.3%. Not to be too harsh, but if those are the average and mean, Georgetown’s 13.6% isn’t “healthy”. Less than half of the schools ahead of us are public, and one of those schools is George Washington. True, especially when you consider the Mccourt gift of 100 million, unless none of that went to the endowment.... All of this is fairly complicated and you need to be sure you're comparing apples wholly to apples and providing context. I can't speak entirely to the former, but as to the latter, you need to consider the sizable amount of construction currently ongoing. Those are net-neutral projects (at best). That is, all of the fundraising that comes in for them isn't really added to the endowment in the long term but rather is spent. That's true, of course, for a lot of fundraising, but it's not true for interest-bearing endowments (like scholarships). Moreover, those construction projects may be funded largely through philanthropy, but they are financed through the endowment. That is, if a project costs, say $62 million (the IAC), the pledged amounts do not yet amount to $62 million and the cash in hand based on those pledges likely is considerably less. When current construction costs outstrip costs in hand (as nearly always happens with significant projects), the endowment (or private bridge loans) pick up the difference. We've got a lot going on right now, and much of our philanthropy is directed at these sorts of projects rather than in truly building the endowment. You would need to compare our projects with all other schools' projects to really get a sense for how we stack up, but I suspect these are actually pretty good numbers.
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Post by Deleted on Jan 29, 2015 13:16:57 GMT -5
True, especially when you consider the Mccourt gift of 100 million, unless none of that went to the endowment.... All of this is fairly complicated and you need to be sure you're comparing apples wholly to apples and providing context. I can't speak entirely to the former, but as to the latter, you need to consider the sizable amount of construction currently ongoing. Those are net-neutral projects (at best). That is, all of the fundraising that comes in for them isn't really added to the endowment in the long term but rather is spent. That's true, of course, for a lot of fundraising, but it's not true for interest-bearing endowments (like scholarships). Moreover, those construction projects may be funded largely through philanthropy, but they are financed through the endowment. That is, if a project costs, say $62 million (the IAC), the pledged amounts do not yet amount to $62 million and the cash in hand based on those pledges likely is considerably less. When current construction costs outstrip costs in hand (as nearly always happens with significant projects), the endowment (or private bridge loans) pick up the difference. We've got a lot going on right now, and much of our philanthropy is directed at these sorts of projects rather than in truly building the endowment. You would need to compare our projects with all other schools' projects to really get a sense for how we stack up, but I suspect these are actually pretty good numbers. Interesting point. Do you suspect that once the IAC is built and this major period of construction is finally complete -- until the next phase that is -- we will see more money head into the endowment coffers?
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H2Oya 05
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Post by H2Oya 05 on Jan 29, 2015 13:35:46 GMT -5
All of this is fairly complicated and you need to be sure you're comparing apples wholly to apples and providing context. I can't speak entirely to the former, but as to the latter, you need to consider the sizable amount of construction currently ongoing. Those are net-neutral projects (at best). That is, all of the fundraising that comes in for them isn't really added to the endowment in the long term but rather is spent. That's true, of course, for a lot of fundraising, but it's not true for interest-bearing endowments (like scholarships). Moreover, those construction projects may be funded largely through philanthropy, but they are financed through the endowment. That is, if a project costs, say $62 million (the IAC), the pledged amounts do not yet amount to $62 million and the cash in hand based on those pledges likely is considerably less. When current construction costs outstrip costs in hand (as nearly always happens with significant projects), the endowment (or private bridge loans) pick up the difference. We've got a lot going on right now, and much of our philanthropy is directed at these sorts of projects rather than in truly building the endowment. You would need to compare our projects with all other schools' projects to really get a sense for how we stack up, but I suspect these are actually pretty good numbers. Interesting point. Do you suspect that once the IAC is built and this major period of construction is finally complete -- until the next phase that is -- we will see more money head into the endowment coffers? Fair point if Georgetown were the only university that has ongoing building projects, I don’t have any facts to back this up but I would be surprised if our building projects were an outlier compared to other schools.
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Post by aleutianhoya on Jan 29, 2015 14:12:14 GMT -5
Interesting point. Do you suspect that once the IAC is built and this major period of construction is finally complete -- until the next phase that is -- we will see more money head into the endowment coffers? Fair point if Georgetown were the only university that has ongoing building projects, I don’t have any facts to back this up but I would be surprised if our building projects were an outlier compared to other schools. Russky probably is the best person to answer these sorts of questions. But this "phase" of construction is likely to last for quite some time. We've got a lot going on now. Among the highlights on the next campus plan (beginning 2018) are: a new residential building atop Harbin Patio; an ‘Interdisciplinary Research Building’ immediately south of Regents Hall; and additional academic and residential space atop Leavey. Needless to say, not all those things will happen, but the school continues to be focused on increased and enhanced physical space. As to what other universities do or are doing, for sure many are engaged in new construction or other expensive refurbishment, but I have a hard time believing that too many are focusing as much of their yearly fundraising (and as sizable a portion of their endowments) on those efforts as are we -- and for such an extended period of time. (Remember: not all of our projects were truly 100% funded through philanthropy.) We may not truly be an outlier, but there are lots of schools that go through significant periods in which fundraising is focused almost entirely on their endowments. I'm sure I'm missing stuff, but in the last decade, the business school, the performing arts center, and the SW quadrangle all were built, significant construction now is ongoing, and additional significant construction is planned in the near term. I know that there are external pressures at work that play into this, but I do think it's necessary in any university's life cycle to take a deep breath for extended periods of time in terms of construction and focus exclusively on other priorities. In contrast, we've been on a 15-year building spree that promises to continue. Just my .02.
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DFW HOYA
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Post by DFW HOYA on Jan 29, 2015 14:15:40 GMT -5
Is this just ROI or does it include gifts/donations? Mostly ROIC. It includes capital gifts which are not spent in the fiscal year. Also, construction projects and the Thompson IAC are, for the most part, not in endowment. To the question above whether endowment funds will rise after the building is completed, history would suggest the answer is no. Major gifts are usually one time arrangements and it's not like Frank McCourt is ready to give another $100M for the endowment. Also, the campaign is scheduled to end in 2016 and there is traditionally a period of "donor fatigue" which must be taken into account in the period before another campaign revs up.
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Post by hoosierhoya on Jan 29, 2015 20:58:37 GMT -5
I must say -- I had hoped that the current $1.5 billion (however that figure is derived) campaign was focused on building the endowment with dedicated scholarships and faculty chairs. Yes, I realize that buildings are sexy and important. And I realize that it's mostly the alums who are able to give huge dollars who focused it where they wanted. I was still disappointed.
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RusskyHoya
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Post by RusskyHoya on Jan 29, 2015 23:09:33 GMT -5
Heh, thanks for the vote of confidence, aleutianhoya. Unfortunately, I don't really have any hard data on Georgetown's capital spending as compared to other institutions, comparable and otherwise. Anecdotally, I do peruse the campus projects pages of various universities from time to time, and I've found that only American and GW appear to have as hefty a slate of projects as Georgetown has had/does have. So my hunch, which seems to square with that of at least some others, is that GU's ongoing building spree is rather unusual.
This conversation also must keep in mind the extent to which Georgetown is more definitively unusual: its dependence on tuition, rather than endowment, to cover operating expenses. This creates some obvious drawbacks, but also has some occasional benefits (e.g. not laying anyone off when the economic crash occurred, unlike even Harvard). Either way, it has a major impact on how strategic planning and fundraising are done.
IIRC a third of the current campaign - $500 million - is supposed to go toward growing the endowment. A big chunk of that, I'd guess, is dedicated to financial aid, at a cool cost of ~ $1 million per endowed scholarship.
The building boom shows no sign of slowing down, which suggests that capital projects of this kind will continue to be a major source of expenditures... for generations to come (ha). On the flip side, with student body size on Main Campus capped; law schools experiencing plummeting demand; and continuing/professional studies programs receiving full cost-benefit analyses before they are approved; major programmatic expansion doesn't appear terribly likely. McCourt will no doubt grow on its merry way, and new flavors of research center and acronymed institute will continue to be launched, but I do think that endowment growth is something that will be prioritized - as a risk management strategy, if nothing else.
On some level, the bigger the endowment, the bigger the pillow available to land on when the higher ed bubble bursts. That eventuality is generating ever-greater urgency in many corners of academia
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Post by boxout05 on Jan 30, 2015 2:46:20 GMT -5
Russky, would you mind giving me a Cliffnotes version of what you/others think the inevitable higher ed bubble burst would look like? Drop in enrollment? Drop in the cost of tuition? Drop in govt money? How sudden? Are we talking a 10 year evolution in how many people attend higher ed, how they consume it, and/or how much they'll pay for it? Are the biggest threats online education (Phoenix), tuition free education (Harvard) or trade/vocational schools (Syracuse)?
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RusskyHoya
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Post by RusskyHoya on Jan 30, 2015 23:53:37 GMT -5
Russky, would you mind giving me a Cliffnotes version of what you/others think the inevitable higher ed bubble burst would look like? Drop in enrollment? Drop in the cost of tuition? Drop in govt money? How sudden? Are we talking a 10 year evolution in how many people attend higher ed, how they consume it, and/or how much they'll pay for it? Are the biggest threats online education (Phoenix), tuition free education (Harvard) or trade/vocational schools (Syracuse)? Well, the scary part is that no one really knows, right? It's like The Big Crunch vs. The Heat Death of the Universe - it's gonna be ugly either way, but there's lots of compelling and contradictory evidence in support of multiple possibilities. I'll stick to what I think are commonly accepted propositions here, and then we can dive into variants further, as well as Georgetown's more specific context, a bit later. For quite some time now, the real value added of a college education has been less about knowledge gained (as Will Hunting memorably noted, you can get access to the same information with a public library card - and that's long before the days of Wikipedia and YouTube and MOOCs) than about branding and acculturation. The former largely takes the form of college-as-sifting-mechanism. White collar jobs hire grads who have been vetted by admission to, and graduation from, universities - the more prestigious the better, generally. The diploma is shorthand for someone who can learn stuff, follow rules, and otherwise be a productive member of society (or petty bourgeois cog in the soulless capitalist machine, if you prefer). The latter includes things like becoming an adult in a sheltered environment where transgressions land you in a system of soft student discipline, rather than criminal justice; networking and connections; formation (in the Jesuit sense); and so on. Over time, colleges have generally sought - like most any industry - to maximize their value propositions in these two categories. Hence, most everyone wants to be as selective as possible and trumpet whatever ranking they can finagle (better branding). They also want to promise the best experience of acculturation (clubs for every taste! Internships! Study abroad! Rock climbing in the rec center! Apartment-style living! Sports!). As they've done so, tuition has continued to grow to support all these things. That growth has been approaching the point of unsustainability for awhile now. What has kept the system going on the same track has been the spigot of readily available student loans. This has allowed colleges large and small to continue increasing prices while still meeting their enrollment targets. With increasing economic inequality and various other structural economic factors looking like they're going to come home to roost, though, things look like they will come to a head sooner, rather than later. In a few cases, they already have. The challenges - you can call them disruptive innovations, though the term has sadly become a cliche - could come from a number of places, all targeting those value added propositions. The first step, which we've already seen in a few cases, is where high price institutions no longer deliver enough extra branding or acculturation to justify their cost, vis-à-vis the competition. Tons of small, private, expensive liberal arts colleges out there facing this issue. Yea, it might be a lot nicer in various ways than Directional State University, but it ain't worth $30 grand more per year. Online education could pose a threat here eventually, but the brand value remains low, in large part because there are fewer checks in place to validate that the person in question is actually attending the classes and doing the work. Online nursing programs have succeeded fairly well, but they're not all that much cheaper, since they do pay to institute such checks, and they have major in-person clinical components. Unless and until online education can solve this verification problem in a trusted, scalable way, the value of the brand will remain low. The big challenge to acculturation also probably comes from technology. For many people, the smorgasbord of student groups and activities and all that jazz is no longer necessary, when the internet can put you in touch with likeminded people in your area - and around the globe. Why pay thousands of dollars extra for schools to play interest matchmaker? Broadly speaking, what these challenges suggest is an opening for lower-cost schools to shake up higher ed and grab significant market share. Think of them as the Southwest or Spirit Airlines of education. They're still ultimately doing the same thing as the established players - and so the low-cost schools may well be bricks-and-mortar places to a greater or lesser degree. But just as Southwest and Allegiant and ryanair and EasyJet have put pressure on legacy carriers and driven them to privilege cost-cutting over amenities for all but their premium service, so could low-cost schools have a similar effect on many (but almost certainly not all) universities.
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RusskyHoya
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Post by RusskyHoya on Mar 5, 2015 0:22:21 GMT -5
Russky, would you mind giving me a Cliffnotes version of what you/others think the inevitable higher ed bubble burst would look like? Drop in enrollment? Drop in the cost of tuition? Drop in govt money? How sudden? Are we talking a 10 year evolution in how many people attend higher ed, how they consume it, and/or how much they'll pay for it? Are the biggest threats online education (Phoenix), tuition free education (Harvard) or trade/vocational schools (Syracuse)? First, before we get into Georgetown's specific circumstances, some recommended reading from the past month on this topic: Teeing it off we have The Post (or, rather, a DePaul administrator) asking: Are Small Colleges Really Doomed? Mr. Boeckenstedt brings a strong data game to the proceedings. Next, we have an article in The Post about Lee Reed's alma mater, Cleveland State, and its attempts to incentivize students to take full courseloads so that they are more likely to graduate - and graduate with less debt. There's some interesting discussions of how schools experienced 'course inflation' due to internal financial incentives, and how they're now trying to turn that around. This can be seen as brand management 'from below,' reducing the dropout rate and improving schools' scores on baseline metrics that are now being federally reported: The Post again, chronicling reductions in support for public universities out of states' general funds. Finally, and most delightfully, the New York Times zeroes in on our quasi-corporate neighbors at GW in the expose " How to Raise a University’s Profile: Pricing and Packaging." The piece features the following, infinitely telling quote: More seriously, though, the piece has some real gems:
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boxout05
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Post by boxout05 on Mar 5, 2015 12:38:13 GMT -5
Thanks for the insight and suggested reading Russky. Appreciate it.
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Post by Nevada Hoya on Mar 5, 2015 19:42:58 GMT -5
Why is BC ranked so high?
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RusskyHoya
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Post by RusskyHoya on Apr 5, 2015 10:57:47 GMT -5
Why is BC ranked so high? Doug Flutie. Meanwhile, we may be seeing the first perturbations of the bursting of the bubble. Beyond the shuttering of Sweet Briar College, we now have some small private schools actually reducing their sticker price, which is noteworthy because it basically never happens:
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DFW HOYA
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Post by DFW HOYA on Apr 5, 2015 11:54:29 GMT -5
Why is BC ranked so high? Doug Flutie. But that'as not accurate, or about as accurate as to say Georgetown is ranked high because of Patrick Ewing. In the early 1970's, Boston Collge was on the real brink of insolvency and there were discussions about selling the campus to the Archdiocese of Boston. Rev. J. Donald Monan S.J. went to the Boston business community and told them that BC should be something more than a backup school to kids applying to Holy Cross, and that they needed to invest in the school for the region as a whole. The endowment went from $5 million to $500 million in 25 years. bcheights.com/news/2014/focus-cost-cutting-saved-bc-bankruptcy-financial-woes-1970s/
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RusskyHoya
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Post by RusskyHoya on Apr 5, 2015 13:29:24 GMT -5
I was joking, DFW HOYA. You are, of course, correct: Boston College, much like Georgetown and its other Jesuit brethren, was a late adopter of modern collegiate fundraising practices. I note, for the record, that Irish Catholic standard-bearer and athletics bandwagon par excellence Notre Dame is, at #12, the only Catholic school above BC (#40). After BC, it's Georgetown (#66), SLU (#87), Santa Clara (#104), Holy Cross (#131), Fordham (#139), and St. John's (#145) in the Top 150. Thinking about the Catholic and Jesuit universities that are well-known nationally (chiefly as a result of athletics, of course, but not solely), such as Marquette, Villanova, Gonzaga, Creighton, Dayton, Providence, and Xavier, that are absent from that list, gives you a sense of how not-unusual Georgetown has been in this regard.
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Post by reformation on Apr 5, 2015 23:26:29 GMT -5
It would be interesting to see a real fundraising analysis, rather than just the overall #'s coupled with the perpetual excuse that gtown got a late start, e.g, how much money has a peer group raised for financial aid, unrestricted, endowment/faculty chairs/ medical research etc versus lets say ND/BC/Penn/Duke/Brown//Cornell etc.
I suspect some though not all of gtowns deficit is due to the fact that we do not have engineering programs which would generally attract a lot of $. Also a lot of the liberal arts/science areas that gown focuses on are less likely to make compelling cases for large funding by donors than arts/science areas of emphasis at other universities. I suspect its also possible that we may raise more in annual giving for certain things like GSP than some of the others vs pure endowment giving, which should factor into a comprehensive analysis of our competitive financial situation.
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