We threw a lot of numbers into those mailers you received in the fall. What, really, do they mean? And is Oberlin slanting the stats to make the case for giving look better? Judge for yourself:

55 percent of the school year :: 12 percentage points :: $60 grand, $20 grand :: 50 endowments

Tuition only covers some of the school year – everyone's school year (back to top)
One fact little-known to students and alumni alike is that tuition revenue doesn't cover the cost of the school year – in fact, it only covers 55 percent.

In the 2004-5 school year, Oberlin spent about $123 million for all of its operations. That's classrooms and dining halls, faculty and staff salaries/benefits, facilities maintenance, guest lectures, art for Allen, snacks for dorm council meetings - the whole nine yards. It paid for all this through a number of sources. Tuition, fees, room and board were far and away the largest source of revenue – but they only add up to $66.5 million. That's (66.5 / 123) = .54 or 54 percent.

Many people want to know if this is typical of our peer institutions. It's a little hard to compare apples to apples since some schools spend less on financial aid, don't have the large costs associated with the art museum or the conservatory, etc. However, it does seem that Oberlin is in the right ballpark:

In 1994 the average private 4-year college received about 76 percent of its revenue from tuition and related fees (McPherson and Shapiro). This number, however, was gathered back when schools counted the costs and revenue associated with financial aid a little differently. Then, tuition revenue was calculated as the number of students enrolled multiplied by the tuition charge for a student; financial aid money was listed under 'costs'. Today, most schools discount the financial aid at the beginning – that is, we only count the dollars actually paid by enrolled students and their parents. Financial aid no longer shows up as a cost, and the tuition revenue listed is 'net' tuition.

Under the 'old' accounting system, Oberlin covered about 65 percent of its costs with tuition revenue. The difference from the average can probably be chalked up, at least in part, to the large amount of grant financial aid Oberlin gives each year – almost $35 million in the 2003-4 school year.

(If you'd like to see all the raw statistics, the most recent Financial Statements are available from the Controller's website at http://oberlin.edu/control/Report05/Report05.htm; the relevant material is on page 7, with the previous year on page 8).

Twelve percent of alums haven't yet made a gift to Oberlin (back to top)
Oberlin has over 40,000 living alumni, but not all of them 'count' for the purposes of alumni donor participation. Some have been 'lost' over the years, moving and not getting an address update in to the Alumni Office. Some have specifically requested we not ask for gifts. Whatever the reason, Oberlin has a 'solicitable base' of about 31,600. When we wrote the Professor X brochure, we were working with an estimated base a bit higher – around 33,500 (there wasn't a sudden drop in alumni; we just didn't have the best number when we wrote the text). The 4,176 alums eligible for the Professor X Challenge are 12.4 percent of this latter number. Based on the new figure of 31,600, all of you young alums who can make their first gift this year are now over 13 percent of the alumni body.

So what? you might ask rhetorically, perhaps towards your computer screen. The alumni giving rate, i.e. the percent of solicitable alums who make a gift in a given year, is used as an indicator of alumni satisfaction (imperfect, we know) by grant organizations, other large donors, and, like it or not (we vote 'not') the USNews and World Report rankings. The amount and designation of the gift don't matter to these outside institutions – they just judge a school with a greater percentage of alumni donors to be stronger than one without. It is for this reason that The Oberlin Alumni Fund encourages all alums to think about participation first. If you don't think your donation will make much difference, think about the potential bump in the rankings (or the easier time professors and students will have getting grants) if more alums make a gift – any size gift – this year.

Basic multiplication - the Challenge figures
The aggregate gift amounts – how much would be raised if everyone eligible for Professor X's challenge made a gift – were derived from a count of those eligible of 4,176 alums. Therefore, if everyone on the list made a gift, Professor X would owe (4,176 x $5) = $20,880. Likewise, everyone on the list making an average gift of $15 would contribute (4,176 x $15) = $62,640.

Like we said – pretty basic. But who are these four-thousand-plus alums? When Professor X came to Oberlin Alumni Fund Headquarters he was most interested in encouraging young alumni to give. Many young alums are 'non-donors' – they just haven't made their first gift to Oberlin yet – and the good professor's challenge seemed like just the thing to move them over the proverbial hump. We scanned our lists for all members of the classes of 1990 to 2005 who hadn't yet made a gift since leaving Oberlin – 4,176 in all. Originally we'd considered just the last 10 years of graduates, but 1990-1992 are in a reunion year this year, and it seemed like a perfect chance to increase the reach of the challenge.

How many endowments equal the Professor X Challenge? (back to top)
When an endowment is created - anywhere, for any purpose - the institution typically uses only a portion of any interest or growth each year. Why? It's planning long term. Take a look at this made-up example:

By spending less than the amount made on the investment, the endowment grows over time, and more money is available each year to be spent. Now the numbers above might not seem like much, but project this sort of activity over millions of dollars (over $560 million for Oberlin at last report) – the impact becomes a little clearer.

However, as is evident from the above table, a bunch of money every year is sitting unspent. This is where The Oberlin Alumni Fund, the college's annual fund, comes in. By raising 'current use' dollars that go to work immediatly in the year in which they are donated, Oberlin gets similar benefits as the payout from an endowment without having to tie up a large percentage of the money in investments. The tradeoff, of course, is that Oberlin has to do this every year, whereas an endowment would keep putting out its little bit of money in perpetuity.

So what does this mean for the Professor X Challenge? Well, if everyone eligible donates $15, Oberlin would receive $62,640. Oberlin, like most other schools, spends about 5 percent of the value of a endowed fund each year. Therefore, your typical $25,000 endowed scholarship would produce $1,250/year. To earn the $62,640, Oberlin would need 50 endowed scholarships ($62,640 / 1,250).

Cited work: McPherson, Michael S., and Morton Owen Schapiro. 1998. The Student Aid Game. Princeton: Princeton University Press.