Healthy finances

By Mary Harrison, COM 250 Reporter

Edited by Caleb Land, COM 303 Editor

MOUNT BERRY, Ga.—Berry College survived the COVID-19 pandemic and is in good financial health due to government grants and increased donations to fundraising campaigns.

College administrators seek to grow the endowment—a funding model for non-profits—through alternative income sources like The Spires at Berry College, a retirement facility on campus, so  the school can alleviate pressure on students to fund its operational budget through tuition increases.

Donations from alumni and others make up 30% of the college’s total endowment, according to Brad Reeder, assistant vice president for student financial services. Berry’s Board of Trustees invests these funds in assets such as stock, which Director of Budget Kim Melton said performed well during the pandemic.

“If the [stock] market’s good, gradually [endowment value] will go up over time, but you don’t see big swings in reaction to the market,” Melton said.

Reeder said that other parts of the college’s financing—including external trusts and revenue from sales of land and timber—also avoided significant harm from the pandemic.

Supplementing the annual revenue from the endowment, Berry received just under $4.83 million in relief grants from the federal government and the state of Georgia during the pandemic, according to Reeder. These funds reimbursed the college for the roughly $2.6 million lost in spring 2020 when the college refunded room and board payments to students for the second half of the semester after lockdowns required them to stay home.

The remaining $2.23 million in relief funds helped the college pay for COVID-19 mitigation efforts, such as virtual learning software, cameras, tents and picnic tables to create outdoor learning spaces, according to Melton. Melton said she also reallocated funds budgeted for unused or decreased expenses, such as travel, to keep the college from running budget deficits during the fiscal years 2019-2020 and 2020-2021.

In addition to the general-purpose government funding, Berry received $3.6 million specifically for student financial aid from federal COVID-19 relief acts, Reeder said.

Students also benefited from the record increase in donations to Berry’s institutional scholarships since 2020, according to Vice President for Advancement Cyndi Court, who oversees the college’s fundraising efforts.

“Emergency [student] need and where there’s an urgent need societally is what’s appealing to our donors and getting them to give more during this [societally] difficult financial time,” Court said.

Although a smaller percentage of alumni gave donations than before the pandemic, Court estimated that donors will give over $50 million by the end of fiscal year 2021-2022, which ends on June 30. A successful  fundraising year pre-pandemic typically totaled $10 million.

The Advancement Office focused its fundraising efforts on expanding the Gate of Opportunity Scholarship program; launching the Griswold Scholarship program; funding the emergency tuition Save-A-Student scholarship; and establishing the LifeWorks Scholarship program. 

“I think we’ve done a good job focusing on the projects that helped donors understand how they were actually coming alongside students and Berry College,” Court said.

Reeder said the number of students currently receiving financial aid and scholarships from Berry poses a financial challenge. The college has a larger enrollment than it did five years ago, he said, but its income from tuition has decreased overall due to a greater financial need among the student population.

To counteract this decrease in tuition income, Berry’s Budget Advisory Committee, comprising  current students, administrators, faculty and staff, voted to raise the tuition rate by an average of 1.9% in recent years, according to Reeder.

Melton said a larger student population also requires building and staff adjustments that create extra expenses for the college, such as the purchase and renovation of the Oak Hill Residences in summer 2021. She said her goal is to help the college build an operational budget based on conservative, consistent enrollment and residence hall occupancy numbers.

“The challenge is right sizing the ship of Berry College to make sure we are financially healthy,” Reeder said. “It’s really a matter of [being] set up to handle the number of students we do have.”

According to Reeder and Melton, one option the Board of Trustees pursued that offsets some lost revenue from tuition while also keeping  tuition rates lower for students is to invest in projects that create supplemental income, known as alternative revenue sources.

“It’s the college’s way to support all the expenses that goes along with having everybody here and providing a great experience to our students without passing so much of the expense on to the students,” Melton said.

Two alternative revenue sources the Board recently invested in are The Spires continuing care retirement community, which opened in 2020 and pays the college every six months for the use of its land—and the Marriott-branded Fairfield Inn & Suites hotel in Rome, which opened at the end of January 2022 and operates out of endowment funds. Income from land and timber sales also contributes to institutional financing.

In addition to income from endowment investments, Reeder said the college’s annual budget consists of funds distributed by two trusts: student tuition and room and board fees; donations designated for immediate use; and income from the Child Development Center and Berry College Elementary and Middle School.

Leave a Reply