In the world of higher ed, there are ample opportunities for continuing education, no pun intended! The first quarter of the calendar year brings conference season (all virtual in 2021) to discuss hot topics and relevant content for those responsible for leading their institutions through the latest rounds of challenges and crossroads. A benefit of our experience in the higher-ed space is the access we have to exceptional resources and industry events to partner and participate in educational sessions. We'll fill you in with the key take-aways from conference season in a three-part series. 

First, I'll recap the AGB (Association for Governing Boards) Foundation and Leadership Forum, held in late January. At SEI, we work in strategic partnership with the AGB and other organizations (like NACUBO and CASE) to showcase client successes, share valuable investment thought leadership and stay on top of this ever-changing higher education landscape.

A Virtual Success

AGB did a fabulous job conducting the virtual conference. Attendees had ample opportunities for breakout sessions, easy ways to reach out to their peers and access to the stellar speakers filling the agenda. Though the new virtual conference experience is different from what we're used to, there pluses to gathering remotely. Thanks to the ease in participating, AGB welcomed over 1,000 attendees, the largest ever, representing 200 public and private institutions, for their 100 Year Anniversary. I have put together some of the key themes that I took away from attending as many events as “virtually” possible.

Key Conference Take-aways

  1. Diversity, Equity and Inclusion (DEI):  DEI is still at the forefront of conversations for many nonprofits when making important decisions. Establishing and maintaining a policy is of growing importance to many institutional investors. A key question to remember is, "do your operating values reflect that policy?" The University of Florida is requiring DEI training for their faculty, board and students. Try starting off by asking radical questions. What do you need to unlearn vs. relearn? There was also some conversations about fundraising and scholarships initiatives specific to minorities.
  2. Reserves:  In one session, panelists discussed their practices and in most cases, policies ranged in 12-18 months liquidity. Stress tests were conducted for a two-year period that looked at three components: Student driven/enrollment, market-driven activity and state-driven activity. Dashboards and heat maps were helpful visuals for robust analysis of the portfolio.
  3. Creative Financing: Be attentive to by-laws. There were a few examples of this discussion: 1. The University of North Georgia asked deans for 50% of unrestricted budget back and actually got back 95%. Funds from that gain went directly back to students. 2. Colorado State created a $20 million dollar student loan fund from $530 million dollar endowment for seniors who otherwise could not afford to graduate, many due to job loss in the restaurant business.
  4. Lasting Impact of COVID-19: Of course, this impacted everyone. Accelerated changes that were inevitably forthcoming were discussed. There were specific mentions around the education model, delivery and communications.
  5. Work Readiness: Research by Kaplan and Gallop showed that internships for students were critical for their future success transitioning into the workplace. Only one-third of institutions have students engaged in long-term projects (>1 semester). Also, students being able to add industry recognized credentials in addition to their degree will give them a big leg up. 
  6. State Funding and Policy Landscape: Generally seeing less money, pending stimulus impact, some states asked for funds back. When the Coronavirus Aid, Relief and Economic Security (CARES) Act was rolled out, many foundations did not take PPP (Paycheck Protection Program) because they had enough in operating reserves and they were concerned about their reputational risk. There was also an educational session on unrestricted versus restricted assets that was used to eliminate the myth that endowment can be spent down.

    A poll conducted at one of the sessions showed 42% of universities were spending more/significantly more time on legislative issues. Some noteworthy and creative ideas on how some universities were approaching the policy landscape were discussed at length. Delaware State University, Oregon State University and Virginia Tech found that including their state legislators in campus and student initiatives helped to better align their states goals with their own. There was also recommendations to break down student body information by district for legislators and for universities to bring students and Board members to legislator meetings to improve collaboration.

  7. Cultivating the Institution and Foundation Relationship: It is more critical than ever to communicate and be aligned in objectives at multiple levels and to eliminate silos, especially between the University President, Foundation CEO and Board Chairs. It is also important to stress test across the macro level and preform cyber risk assessments/insurance. Carol Cartwright (President Emerita at Kent State and Bowling Green) recommended the AGB book “The New Realities for Public Higher Educational Foundations” for anyone trying to learn more on this topic. 

One last take-away, while seemingly obvious, is so fundamental that upon it is built the success of many institutions, having learned that a deep focus on solid relationships and good governance yields synergies across the board. Stay tuned for my re-cap of the NACUBO and CASE conferences coming soon. 

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Legal Note

Source: Association for Governing Boards Virtual Conference January 25-27, 2021
Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company (SEI). Investing involves risk including possible loss of principal.

AGB, NACUBO, CASE, University of Florida, University of North Georgia, Colorado State University, Delaware State University, Oregon State University and Virginia Tech are not affiliated with SEI or its subsidiaries. Kent State University is a client of SEI since 7/3/2017.