Financial Trends in Public and Private Nonprofit Institutions

January 26, 2012

For fiscal years 1999 through 2009, both public and private nonprofit schools increasingly relied on tuition revenues when compared with other sources of revenue. Net tuition and fees—revenues received after subtracting institutional aid provided to students—climbed from 16 to 22 percent of total revenue at public schools, and from 29 to 40 percent at private nonprofit schools. According to four schools GAO interviewed, increased reliance on tuition revenue is partly a result of significant decreases in state and local appropriations and other revenue sources, such as endowment income. Analysis of Education data shows nearly all types of public and private nonprofit schools saw decreases in state and local appropriations ranging from 6 to 65 percent, as well as decreases in other revenues, ranging from 13 to 75 percent. In response to these declines, schools that GAO visited pursued additional revenue from out-of-state and, in some cases, international students, government funded research, and fund-raising.

Instructional spending consistently made up the largest share of total expenditures at public and private nonprofit schools, about 30 percent in fiscal years 1999 through 2009; however, spending varied across school types when accounting for student enrollment. Nonetheless, faculty compensation and benefits comprised the largest portion of instructional spending, about 70 percent, and increased for all school types during this time period. The overall number of faculty also rose with a shift toward hiring more part-time and nontenured faculty. Spending on most noninstructional activities also increased, particularly for research and student services. Schools GAO visited have adopted strategies to contain costs in response to revenue constraints, including centralizing administrative functions, cutting personnel costs, delaying construction projects, and eliminating certain class offerings. 

More Information

NCMA Resources | Advertise | Privacy Policy | Contact Us | Site Map | © 2012 National Contract Management Association