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A deeper dive into the responses from a recent NACUBO survey of business officers on current circumstances and future plans sheds light on the financial strategies being deployed by institutions—and illuminates key differences in how different types of colleges are responding to the COVID-19 outfall.

Our survey has limitations; with only 151 respondents, the results are not generalizable across the higher education sector. We believe, however, that they provide a snapshot of strategies being employed by colleges that merits reflection and consideration.

Endurance Despite Challenges

NACUBO identified several cross-sector concerns for FY22, such as declines in auxiliary and athletic revenue and plans for across-the-board budget cuts. However, no respondents to our survey identified financial exigency as a top-ranked budget or financial change anticipated for FY22. None of the respondents reported being in the process of closure, and very few reported large-scale merger plans involving shared administrative, business, facilities, or other non-academic services with another institution or organization.


In a question about reserve fund policies, most respondents reported that their institution’s reserve fund policies and practices are adequate and remain steady. This was the case even for a majority of small institutions that enroll 4,000 FTE students or fewer. This likely represents that well-planned operating reserve policies have been successful as critical fiscal safety nets.

A Closer Look at Small Colleges

Most of the four-year private, nonprofit colleges responding to our survey are small institutions, and our survey results suggest this type of institution tends to be experiencing greater stress and is taking more dramatic business steps than public colleges. However, it is not yet clear whether these institutions are fundamentally changing their operations for the future or if they are simply deploying short-term strategies to weather the current circumstances.

Expected Budget Changes for FY22

Declines in auxiliary revenues for FY22 (academic year 2021-22) are anticipated by nearly all survey respondents. For four-year private, nonprofit institutions, the most frequently anticipated budget and financial changes reported for next year, in rank order, are:

1. Decline in auxiliary revenue

2. Delays in deferred maintenance

3. Decrease in annual fund giving

4. Decline in athletic revenue (tie)

4. Across-the-board budget cuts (tie)

Public institutions collectively ranked concerns about annual fund giving lower and ranked declines in state funding as a more-anticipated budget change for FY22.

When we looked at operating strategies, we saw some differences in reporting by private, nonprofit colleges across several areas:

Board Meetings

More private, nonprofit institutions reported changing their board of trustees’ meeting schedule to meet more often, suggesting they took a tactic to engage board members to meet emerging needs during the crisis. In the open-ended responses, business officers reported:

“Ramped up actual fiscal reporting internally and with board. Educate all so everyone is knowledgeable and can assist.”

“There have been a number of special meetings of the full board and the executive committee.”

Academic Offerings

NACUBO was surprised to see that some private, nonprofit institutions reported plans to increase the number of academic programs or majors they offer. However, the addition of new programs is likely a reflection of changes in enrollment demand and strategies to attract students to emerging fields. Of those respondents who indicated that they would increase the number of academic programs or majors in FY22, 70.7 percent (n=29) of them were at schools with enrollments below 4,000 students. These findings merit further study.

Open-ended responses include the following comments:

“We are restructuring our academic programs to address lower enrollment and student satisfaction.”

“The University is sunsetting certain academic programs and strategically utilizing data to add new academic programs and evaluating the right number of athletic programs.”

Faculty and Administrative Changes

Our survey findings show four-year private, nonprofit colleges are more likely to be considering hiring and salary actions than other types of institutions.


While many across the sector are planning to curtail capital expenditures in FY22, more private, nonprofit institutions are planning to take a special endowment withdrawal than other types of colleges and universities. Of those respondents who indicated that they would increase their endowment spending rate, 78.6 percent of them were at schools with enrollments below 4,000 students.

Before the onset of the pandemic, many colleges—particularly small, private, nonprofit ones—were facing operating pressures, largely related to downward or stagnating enrollment trends. COVID-19 undoubtedly strained circumstances further and it’s evident there are more business and operating strategies being employed by these institutions to contend with the challenges.

Among the findings, we were surprised that our survey did not reveal more institutions moving to shared business services, redefining tenure benefits, or renegotiating debt covenants, which represent longer-term fiscal strategies. This leaves us to wonder how many institutions are taking a short-term pandemic survival approach to planning as opposed to making wholesale changes to address long-term stresses that were evident before 2020.


Liz Clark

Vice President, Policy and Research


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