Westmont Magazine Financing the Future at Westmont
Because Westmont has a long history of sound financial management, it doesn’t seem remarkable that the college has finished yet another year in the black. But given the difficulties facing many colleges and universities in the 21st century, Westmont’s performance is indeed significant.
Unlike most other institutions, Westmont lives with a cap on its enrollment. That means the college can never increase revenue by enrolling additional students. To meet higher costs, Westmont must either raise tuition or bring in more donations.
At the same time, Westmont is a relatively young institution with a small endowment. Whereas older schools augment tuition revenue with endowment income, Westmont gets less than 5 percent of its revenue from investments.
So Westmont remains heavily dependent on tuition, which accounts for a significant percent of its revenue. Gifts, particularly for endowment, will play a key role in reducing this dependency.
Steady increases in tuition have raised concerns about the affordability of four-year colleges like Westmont. However, offering a high-quality education requires significant resources. Recruiting and retaining a highly qualified faculty represents one of the greatest expenses, yet this is one commitment the institution cannot afford to cut back. Keeping computer systems up-to-date, providing the latest lab equipment and adding to the library’s collection are all costly.
Each year, the college awards financial aid on the basis of both need, merit and talent to help families with the cost of tuition. Last year, Westmont committed $8.3 million to this assistance. Endowed and annual scholarships both contribute to this total. Some day,
Westmont hopes to meet 100 percent of the need of qualified applicants.
Faced with all these challenges, President Stan D. Gaede has set a goal of significantly expanding the endowment during his tenure. Thanks to the capital campaign that ended in 2002, this permanent fund has nearly tripled since 1998 (see the chart and story on page 27). This kind of progress must continue in order for the college to establish an adequate endowment.
While alumni giving set a record during the fiscal year (see the chart and story on page 27), giving by foundations also set a new mark. For the first time, foundations gave 42.5 percent of total gift income, or nearly $4.4 million. A concerted effort by the college to apply for grants and growing recognition of Westmont’s quality led to the increase.
Parents and friends continue to play a substantial role at Westmont. Friends gave $2.7 million, one-fourth of all gifts, and parents, some of whom are also paying tuition, contributed $1.8 million, or 17 percent.