November 13, 2011

Where Do Universities Get their Money From?

The Delta Project tracks data on college costs and productivity.   Their study on Trends in College Spending 1999 - 2009 has data on college revenues and the source of revenues.   They break it down based on different sources of money as well as different classes of university.   I'll look at Public and non-profit Private 'research universities' which are the major full universities that offer Graduate programs.     The study looked at 152 such public schools and 99 private schools. 

The figures given below are all out of the Trends in College Spending 1999 - 2009 report.   The dollars are based on average amounts per full time equivalent student.  

The major categories of revenue are :
Net Tuition Revenue : Revenue from student tuition and fees less institutional student aid.
State and local appropriations : revenues from local and state organizations excluding grants and contracts.
Private gifts, investments returns and endowment income:  Gifts from donors and money earned or taken from endowments.
Federal appropriations, grants and contracts and state and local grants and contracts:  Money from federal sources and state and local grants.
Auxillary: Hospitals, residence halls, food services and intercollegiate athletics.

First lets look at the source of revenue for Public research universities.

Altogether the revenue total for 2009 was $35,524 including loss of $387 from endowments.   This is the total revenue of the public universities averaged over the student body.    From 1999 to 2009 the net tuition rose about 50%.   State and local appropriations are down around 15%.   Federal money is up 60%.   Auxillary revenues are up 25%.

The average % for each category over the 10 year period are:

Public universities are heavily subsidized with over 50% of their  You may or may not be surprised to see that net tuition only accounts for 19% of total university revenue.

Now take a look at Private research universities by comparison:

Total revenue for the private universities is $54,492 per student average excluding endowments.   The endowments and gifts contributed anywhere from -$30,256 in 2009 up to a peak of $46,342 in 2007.   Just because the endowment is up or down doesn't mean the university spent that much money.   The endowment funds are not necessarily used as spending money but just reflect fluctuations in the universities assets.   Revenue sources for private research universities are more stable growth across the board.  Net tuition is up 21%, Federal funding up 23%, Auxillary income up 22%.   The endowments dropped drastically in 2009 due to poor performance in the stock market and possibly lower donations.

And the average % for each category for private universities:

Interesting to see how much private schools get from federal, state and local governments in the way of support.  A lot of that comes in the form of grants and contracts I'd guess.

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