Investing in the long term

By Douglas J. Guth

The highs and lows of endowments.

Uplifting underserved populations is a compelling donor narrative, an effort buoyed in recent decades by endowments that fund scholarship opportunities and exciting new programming.

“We have a great story to tell about giving,” says Mark Erickson, president of Pennsylvania’s Northampton Community College (NCC), which increased its endowment from $51.9 million in 2018 to $65 million this year thanks to a capital campaign launched in 2016. “I’ve worked at four-year institutions and research universities. Here you can endow 10 scholarships to one scholarship there. The impact of a scholarship on the life of a student is unbelievable.”

Although endowments at two-year colleges cannot compare to similar funding at a typical powerhouse university—Harvard University’s endowment, for example, was valued at a record-high $40.9 billion at the close of fiscal year 2019—community college endowments have grown an average of 76 percent over the past 20 years, according to the Center for Community College Advancement at the Council for Advancement and Support of Education (CASE). Foundation creation among community colleges is a necessity in light of a 20-year decrease in state-level funding, observers say. While NCC works to keep tuition costs low, more than half of its students require financial aid just to attend.

Through its recently completed Transforming Lives Campaign, the college developed a diversity of revenue streams to add new chapters to its life-changing tale. Last year, NCC exceeded its fundraising goal of $17 million, accruing over $20 million from a generous group of foundations, corporations and individuals, some of whom are alumni. Most funding goes to the approximately 1,000 scholarships the college awards annually. Dollars from the campaign also are used for on-campus programming, including $2.5 million for launch of a new Center for Innovation and Entrepreneurship at the college.

“Endowments are our secret sauce is what we tell alumni and donors,” Erickson says. “They give us those extra things that make us stand out, and an ability to move to that next level in how we serve students and our community, especially around the area of workforce. Fundraising power comes from student testimonials. There’s not a dry eye in the house after a student tells donors what’s going on.”

Working hard for the money

A group of area dentists established NCC’s foundation in 1969, aiming to finance a dental hygiene laboratory on campus. A multi-time recipient of CASE’s Excellence in Fundraising Award, the endowment has ballooned over the decades, gaining a $14 million bump in the early-mid 2000s during a capital campaign, notes Sharon Beales, vice president of institutional advancement for the college and executive director of the college’s foundation.

Beales says Northampton does a particularly good job of donor stewardship, boosted by a hard-working foundation board and finance committee dedicated to endowment management.

“We have an excellent finance department—the people I work with understand what we do and how we do it,” Beales says. “Our endowment has always been managed well, and that’s not always been the case at every place I’ve worked at. There’s a good partnership between finance and development.”

Scholarships encompass the lion’s share of foundation funding at NCC, with qualifying students getting an average of $1,000 toward tuition. Among the college’s offerings is the Stabler Scholarship, which encourages recipients to contribute to the scholarship equal to the amount they obtained.

“We let students know there’s a donor involved (with their scholarship), and they can do the same for the people behind them,” says Beales. “If they can pay it back in the future, they’ll do it to pay it forward.”

This is an excerpt from an article in the forthcoming Community College Journal, which will be in mailboxes and online mid-October.

Doug Guth
Douglas J. Guth

is a writer based in Ohio.