Creating a Sustainable Financial Enterprise
A recent survey of 300 American college and university presidents found that long-term financial viability was a top-cited concern. The pandemic has shaken the financial foundations of many colleges, though the full extent of the impact remains difficult to assess. Prior to COVID-19, the national enrollment landscape and programmatic trends were already shifting, magnified even more so in California, where institutions serve highly diverse student populations and grapple with accessibility and affordability issues.
Emerging out of a time of fiscal challenge, Azusa Pacific University has been recently focused on analyzing the financial landscape before the global health crisis struck, employing strategies to work with intention amidst the disruption facing higher education. APU approaches the work moving forward with the confidence of its more than 120-year history and the new hope drawn from the Strategic Plan, Renewal: Strengthening Our Capacity for Cultivating Christ-Centered Scholars and Leaders, to embrace the challenge of anchoring our financial future, not as an end in itself, but as a means for fulfilling our vision to be the premier Christian university for our culture and times.
Grand Initiative 5: A Sustainable Financial Enterprise, is an ambitious strategic initiative that involves the entire APU community. APU’s economic engine is fueled by many parts, which function interdependently. Diverse undergraduate and graduate enrollment streams, a budget model with sound forecasting assumptions, growth in total asset base, careful management of investments, a growing endowment, and strong fundraising can all ensure that the health of APU’s economic engine is robust.
Philanthropy plays a critical role in the financial sustainability of APU. The strategic plan outlines several important opportunities and initiatives, including growing the endowment by $48 million, advancing faculty scholarship and research, expanding and improving the physical campus, funding student scholarships to increase accessibility and affordability as well as to reward merit, and developing the spiritual growth and calling for all our students.
Growing the Endowment
APU is committed to growing the endowment through disciplined investment of annual budget surpluses and strategic philanthropy. APU anticipates that over the seven years of the strategic plan, an additional $25 million will be invested from budget surpluses. In addition, we will raise an additional $23 million to grow the endowment to more than $140 million. This goal includes three new endowed faculty chairs ($9 million total), $10 million to support student scholarship endowments, and a $4 million endowment to advance research. This growth-oriented endowment focus will create a sustainable revenue stream for APU for years to come.
APU is blessed with an exceptional Azusa campus that supports many of our existing programs. As our student demographic shifts and new programs are added, some of this space can be renovated and repurposed to serve these changing needs at a much lower cost than new construction. Similarly, as APU builds upon nationally recognized and innovative programs in areas such as the health sciences, the arts, and the Honors College, specialized space may necessitate the construction or repurposing of buildings. These needs and opportunities will be assessed through a collaborative process that integrates the academic vision with a campus master planning process.
Optimizing Financial Modeling
APU has worked diligently to create a sustainable financial model that allows leadership to respond to the changing landscape of higher education and the national economy. This includes an investment in technology, enhancing fiscal management policies and procedures, and creating transparency so staff, faculty, and students feel engaged in the financial stewardship of APU’s resources. Additionally, APU will continue to evaluate how to utilize and structure its debt to enhance the University’s Strategic Plan, while not overburdening the operational budget.
Amid the uncertainty facing higher education, APU’s bold Strategic Plan will build a sustainable financial model, enabling the University to respond nimbly to changes and opportunities over the next seven years. It provides for an investment in our campuses, technology, and most importantly, in our faculty, staff, and students. As we embark upon this important work, we anchor on this promise: “And my God will supply all your needs according to His riches in glory in Christ Jesus” (Philippians 4:19, NKJV).
Posted: March 25, 2021