Arnerich Massena’s newest white paper, Keeping College Affordable: How to Fund Public University Obligations in a Low-return Environment, examines the drastic decrease in public funding for state universities, asking the question: what can public colleges do to keep college affordable, and find the dollars they need to fund not only ongoing operations, but future investment as well? This paper takes a look at how to recoup those funding losses through strategies in spending, fundraising, and investment.

“Public universities really face a crisis in their funding,” notes James Ellis, CFA, senior consultant and co-author of the paper. “States have reduced the support they provide for higher education, and students cannot keep bearing the burden with higher tuition. We want to help public colleges meet their spending needs and fund future investment, without sacrificing the quality of their education or making college unaffordable for students.” The paper outlines the funding crunch and then dives into solutions that can help. Some proposed solutions include:

• Reaching out to alumni as a source of funding: Private universities know the value of their alumni base as a critical source of funding, and public education can follow their example. The paper provides guidance on how to craft successful alumni outreach strategies.
• Corporate sponsorships: A unique and innovative method for funding, corporate sponsorships involve working closely with a local firm to develop programs tailored to train students specifically for employment at that firm. The paper describes how this tactic can serve a multi-purpose function, both providing funding and investment and also better serving students with real-world training and practical knowledge.
• Investment: The paper offers several investment strategies that can help universities reach their long-term return and spending objectives. Discussing solutions that range from using an active investment approach to investing in alternative assets, the paper goes in depth into potential asset allocation strategies that can greatly benefit a portfolio in the current investment environment.

“Public universities are caught between the rock of reduced government funding and the hard place of already-skyrocketing tuition,” remarks Terri Schwartz, managing director of institutional services. “Our objective is to provide some clear-cut solutions that can help keep public higher education affordable.”

A downloadable version of Keeping College Affordable: How to Fund Public University Obligations in a Low-Return Environment is available at http://arnerichmassena.com/Research-Resources/.

You can also listen to the accompanying podcast featuring senior consultant James Ellis, CFA, below: