Louisiana’s Higher Ed Foundations Topped $4B in Assets in 2020
BATON ROUGE (The Center Square) — A recent audit of college and university foundations in Louisiana shows several dozen across the state’s four higher education systems held more than $4 billion in assets in 2020.
Louisiana Legislative Auditor Mike Waguespack released a report last week detailing the financial status of “Higher Education Foundations and Affiliates in Louisiana” for the Legislature.
“The purpose of the report was to provide information about the foundations, including the number of these organizations and their total assets, revenue, and funds spent,” according to the document.
Auditors identified at least 75 foundations affiliated with public higher education institutions in Louisiana, and found they collectively held about $4 billion in assets across the state’s four higher education systems.
That figure is nearly double the 2020 state budget for higher education of $2.4 billion for the four systems.
The different types of nonprofit corporations and affiliates supporting higher education institutions fall into five categories: University foundations used to promote and enhance programs and fund scholarships; athletic associations to build and maintain athletic programs and facilities; alumni associations aimed at programs and services to strengthen alumni bonds to the institution; research foundations to support research centers; and facilities foundations to develop and manage university facilities.
Auditors found university foundations collectively held the most assets at $2 billion in 2020, followed by facilities corporations at $1.3 billion and athletic associations at $489 million.
“The top 10 foundations held a collective $2.9 billion (72.1%) of the $4 billion in total foundation assets across all four higher education systems,” auditors wrote. “The two foundations with the highest total of assets were the LSU Foundation and the Tiger Athletic Foundation, which accounted for approximately $1.2 billion, or 29%, of all foundation assets.”
Revenues for all foundations in 2020 totaled $529.1 million, according to the report.
“Across all four systems, foundation-generated income, such as rental income, special events, or management fees, made up $273.6 million (51.7%) of the total revenue,” the report reads. “Contributions, such as from donations or fundraising, made up $117.9 million (22.3%), and investment income made up $49.4 million (9.3%). Other income accounted for $88.2 million (16.7%), including assets released from donor restrictions, athletic sponsorships, and scholarships.”
Foundation spending totaled $476.5 million in 2020, generally on “program services” like scholarships, alumni events, and facility depreciation, or “supporting services” including fundraising, administrative costs, and professional services, according to the report.
Louisiana’s four higher education systems include the University of Louisiana System, Louisiana State University System, Southern University System, and Louisiana Community and Technical College System.
The Legislative Auditor noted that the foundations are becoming increasingly important for universities in light of state budget cuts over the past decade, as documented by the Center on Budget and Policy Priorities.
“Louisiana had the largest percentage increase in tuition between 2008 and 2019, equaling 96.8%, adjusted for inflation. Four year tuition rose from $4,885 per student in 2008 to $9,614 in 2019,” auditors wrote.
“In addition, a March 2021 Legislative Auditor report on the impact of higher education fee increases found that decreased direct state support per student — which includes state general funds, statutory dedications, and interagency transfers — and subsequent fee increases over the past 10 years have made it less affordable for students to earn a higher education degree or other credential in Louisiana,” the report read.
“Between fiscal year 2010 and fiscal year 2020, direct state support per student in Louisiana decreased by 42.8%, from $6,062 to $3,467. Concurrent with decreased state support the audit found that student fee increases outpaced inflation, increasing 154.6%, from an average of $1,168 per student in academic year 2009-10 to $2,975 for 2019-20.”