Strategies, Performances and Profiling of a Sample of U.S. Universities in 2012

Abstract

The global economic crisis is affecting performances of not-for-profits. At the same time donors are targeted by a pressing good-cause related marketing, so that the competition for philanthropy is particularly keen. U.S. universities can be public, not-for-profit and for-profit. U.S. not-for-profit universities are confronted with different marketing, fundraising and revenue diversification. Above all, marketing concerns customers and their segmentation and their purchasing-power exploitation; fundraising aims to gain the trustworthiness of donors, instead. The aim of this paper is the analysis of the revenue diversification of a sample of 100 U.S. not-for-profit universities according to IRS (Internal Revenue Service) Forms. These 100 U.S. universities had the highest 2012's revenues for the Guidestar ranking (www.guidestar.org). The cluster analysis gives evidence that the highest gain and the highest solvency are both connected with the implementation of revenue diversification for one profile. The most crowded cluster is the Marketing Expert with the second highest gain.

How vulnerable are you? Assessing the financial health of England’s universities

“…Whilst it is not an immediate solution, income diversification presents a strategy for universities to mitigate the risks associated with an overdependence on any one source of income (Webb 2015). An income portfolio reflecting a more balanced reliance between income from teaching, research, third-stream activity, public funding, and investments, is less vulnerable as all sources of income are not likely to be challenged at once (Besana and Esposito 2015). To temper the above arguments for such a strategy, it is worth highlighting an important caveat to seeking diversified income, which is the need for universities to remain mindful of the importance of margin and likely return on each income source.…”