Updating the list of exemplary characteristics

After publishing a list of twenty characteristics that are common to healthy institutions, some conversations have ensued with various clients, asking about other components.  Tuition discounting has been the most popular.  So, here is a list updated to 25 characteristics.  See how you are doing in comparison with these standards:

  1. Annual net tuition per traditional student of at least $14,000
  2. Tuition discount rate of less than 50%
  3. Incoming student discount percentage no more than three percentage points more than returning student discount. (ie new student = 46% and returning student = 43%)
  4. Non-student revenues (primarily donations and investment returns) of at least 12% of operating revenue. (Student revenues include tuition, fees and auxiliary revenues)
  5. A student to faculty ratio for traditional operations of 17 to 1 or greater with no more than 15% of traditional classes having less than ten students in them.
  6. Faculty makeup: <10% Instructors, >40% Asst. Professors, 30% Associate and 20% Full Professors.
  7. No more than five percent of overall faculty load assigned to non-teaching appointments
  8. Non-traditional student revenues equaling or exceeding 40% of overall net tuition
  9. Net contribution from non-traditional operations of at least 40% after facility and overhead costs.
  10. Average non-traditional class size equal to or exceeding 15 students
  11. 85% of non-traditional classes taught as overload or by adjuncts.
  12. GAAP-based change in unrestricted net assets (surplus) = or > 4% of operating revenue
  13. Long-term debt equaling less than 50% of annual operating revenue.
  14. Debt service (principal and interest) not to exceed 5% of operating revenue
  15. Total salary and benefit costs not to exceed 65% of total operating expenses.
  16. Total Salary and benefit costs not to exceed 90% of net tuition revenue
  17. Student receivables not to exceed 1% of annual student revenue at year end.
  18. Matching 403(b) contribution of at least 6%
  19. 80% of health care premiums covered by institution.
  20. Dedication of at least 20% of operating surplus toward a summer bonus payment to on-going employees (end of July payout).
  21. Budget contingency of at least 2% of revenues.
  22. Separate capital budget from operating budget.
  23. Capital spending plus principal payments exceeding 120% of annual depreciation expense.
  24. Formal five-year forecast with pro-forma balance sheet, income statement, cash flows and ratios, supported by solid (defensible and owned) revenue projections.
  25. Budgeting based on the lower end of the range of revenue expectations, with the uncoupling of budgetary assumptions from revenue goals for enrollment, financial aid and advancement (departmental goals exceeding budget)

Keep in mind, these are not hard and fast rules. For instance, your institution may have royalty income that far exceeds the 12% threshold for non-student revenues. That kind of performance can cover a multitude of weaknesses in other categories.

Provided you are able to deliver the above statistics, chances are pretty good you will have a healthy institution that can sustain the hard times that confront us.

Have anything to add to this list?