Hillsdale has received a perfect A+ score from Forbes in its College Financial Health Grades for the second year in a row.
Many of the qualities Hillsdale students know and love about the college, from the integrity of its classical curriculum to its merit-based admissions, are possible because the college does not accept aid from the federal government, according to Michael Murray, who is the legal counsel and administrative director of Hillsdale’s gift and estate planning team. While only a few colleges choose to commit to financial independence, Hillsdale has proven that the college does not need government assistance to maintain healthy finances, according to Murray.
Only 38 colleges out of 921 surveyed by Forbes achieved a perfect mark, in a calculation that involves the size of endowments as well as liquidity, debt, and other factors. Others on the list include Duke University, Harvard University, Princeton University, Stanford University, and Yale University.
Hillsdale is the only school in Michigan to earn a perfect score, and the only school in the nation with a perfect score that also refuses to accept government funding.
Patrick Flannery, vice president of finance and treasurer of the college, said Hillsdale’s ability to teach the Western tradition in an honest way is directly attributable to the fact that it “diversifies its revenue sources and rejects government funding.”
“The college is proof that education does not need to be subsidized by the government to succeed. We are grateful to the many donors, parents, and students who place their trust in us,” Flannery said in the press release.
Hillsdale hasn’t sought recognition from Forbes; rather, the perfect ranking is a natural byproduct of how the college is run, according to Murray.
“We’re going to do things in a way that will put us in the best position to carry on our mission and legacy, and that’s what people are investing in,” he said. “People know that for the past 176 years, we’ve been doing things right and sticking to our founding mission.”
Murray said Hillsdale has had to be more focused on diverse sources of funding because it doesn’t take government money. However, Hillsdale’s innovations have inspired other institutions of higher learning to diversify their revenue streams as well.
“Many colleges’ main revenue source consists of tuition and fees,” Murray said. “Somewhere around 30 to 40% of income for a general college comes from tuition, while it’s less than 10% at Hillsdale.”
Hillsdale’s main source of revenue comes from gifts, according to Murray.
“We work with people who want to join us and support the college through their estate, either with a bequest in their will, or a living trust, or what we call planned gifts,” he said. “We were actually on the forefront of colleges that got involved in doing that about 25 or 30 years ago. Most colleges and many nonprofits now use that same financial tool.”
Although Hillsdale’s financial approach is widely emulated in the nonprofit world, few universities have followed suit in declaring their independence from government funding. “I think we’re very rare,” Murray said.
Murray said he believes Hillsdale’s financial independence cannot be separated from its central mission.
“Our financial stability is tied to the way we approach being good stewards of the gifts we receive from people,” Murray explained. “That’s an investment that they’re making to support the college, just like students make an investment in their education to pursue the ultimate goal of self-government.”