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Regional Public Institution

The changing environment for higher education has impacted institutions across the country, from declining state appropriations to macro trends in consumer behavior. This institution had experienced a decline in state funding and responded with appropriate cost adjustments in operating expenses. While cost reductions addressed short-term issues, they were not enough to meet the critical need for new revenue.

The institution’s administration expressed its intention to focus on prosperity in the face of a changing environment within higher education. As part of this focus, the institution determined that it required $10 million of additional net revenue per year to support investments into its strategic and master plan. The institution asked AGB to explore new revenue alternatives.

Our review uncovered immediate “natural revenue” opportunities totaling $10.3 million of gross revenue and $6.2 million of net revenue contribution annually. While there is modest risk on each initiative, the return on investment for each category is more than ten times the committed capital. The strategic decision to invest in growth-related initiatives allowed the board and administration to fund its strategic and master planning initiatives.

Moreover, the total project, including several new opportunities and “blue-sky opportunities,” identified $30 million of gross revenue and $12.9 million of net revenue contribution annually. The natural revenue areas produced the highest incremental net revenue contribution, while the new and blue-sky opportunities provided modest incremental net revenue margin.

Full realization of these revenue opportunities is expected to take four to five years. Implementation of the natural revenue areas is now underway.

Learn more about our work at a small rural college, a small private institution, and a state system.