RubinBrown analyzed the financial statements for institutions with a fiscal year ending in 2023 and who filed final reports with the Federal Audit Clearinghouse through March 31, 2024 and noted a few trends:

• Nonprofit colleges & universities experienced varied financial results:

Of the 1,037 nonprofit institutions for which data was available through the Federal Audit Clearinghouse, only 622 (or 60%) reported positive changes in net assets during 2023, and even fewer (526, or 51%) reported positive changes in net assets without donor restrictions. The median nonprofit institution reviewed reported total revenues of approximately $52.8 million, changes in net assets of approximately $1.3 million, and changes in net assets without donor restrictions of $0.1 million.

• Public colleges & universities tended to report strong results in fiscal year 2023:

Of the 842 institutions for which data was available, approximately 88% reported positive changes in overall net position and positive changes in unrestricted net position for the fiscal year ended in 2023. In addition, of the institutions posting negative results for fiscal year 2023, only 8 incurred losses in excess of 10% of total revenues earned. The median public institution reviewed reported total revenues of approximately $98.7 million, changes in net position of approximately $7.7 million, and changes in unrestricted net position of $7.6 million.

• Correlation of results with geographic location:

In order to take another look at the data, the schools were divided into regions of the country (Midwest, North/Northeast, South, and West) to determine if geographic location had any effect on the operating results of the various institutions. The most notable observation we had was in the comparison of institutions of higher education between the Midwest and the West.  

In FY23, not-for-profit institutions in the Midwest had a median total change in net assets of approximately $764,000, with 44% of institutions experiencing a decrease in total net assets. Whereas not-for-profit institutions in the West had a median total change in net assets of approximately $1,483,000 with only 36% of institutions reporting a decrease in total net assets in FY23. Public institutions saw similar trends with the median total change in net position in the Midwest being approximately $6.1 million with 15% of institutions reporting a decrease in total net position in FY23, while the median total change in net position in the West was $15.4 million with only 12% of institutions reporting a decrease in total net position.

Despite challenges in 2023, most colleges and universities still showed positive changes in net assets (net position) for fiscal years ended during 2023. The primary driver of these positive results in many cases was endowment increases, as the S&P 500 saw an increase of approximately 24% between July 1, 2022 through June 30, 2023 (the fiscal year for many institutions). In addition, some schools were able to recognize and receive final tranches of COVID-19 government assistance during the year.

Looking forward to 2024 and 2025, much remains uncertain in the realm of higher education. Changing enrollment, interest rates and inflation, and the results of the 2024 Federal election could all have impacts on the finances of institutes of higher education. Considering the uncertainty going forward, some institutions will need to be increasingly focused on adapting operations while minimizing cash outflow, while those with strong investment portfolios can make investments in the transformation of their institutions to adapt to the trends they observe in higher education.

Published: 05/29/2024

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