By Sean Callahan
Whether it be a supermarket, a salon or a factory, every business tracks its finances. As the release of the 2018-2019 annual President’s report shows, Saint Vincent College is no different. The document praises Saint Vincent’s many donors and touts recent successes, such as the Forward Always Forward campaign and new additions to the campus like the Dale P. Latimer library.
The President’s report displays SVC’s annual finances through the lens of two major categories: the statement of activities—which lists specific revenues and expenses of the college, such as scholarships, tuition and academic support—and the balance sheet, which lists the general assets and liabilities of the college, such as cash, loan payments not yet received and debts the college has not paid.
Adam Striffler Galaski, a 2018 graduate of SVC and a Certified Public Accountant (CPA), helped decipher the dense financial information in the report. He first noted that the reason for the 4.7 million dollars that had yet to be paid to Saint Vincent was due to the release date of the balance sheet, June 30.
“The college has most likely started to bill the students for tuition, room/board, and meal plans but has not received the payments yet,” Galaski said.
In the President’s Report, tuition is listed as the college’s primary revenue, with a total of over 60 million dollars. However, this number was reduced by 34 million, the total cost of scholarships awarded to students that year. Adam explained that many other sources of income made up for the cost, including federal grants and private gifts.
He stressed the importance of endowments, which are funds created to provide money—whether from donors or other sources—for general college operations or specific programs. Some endowment funds are restricted, meaning that donors have placed limits on how they can be used. Others are unrestricted, and thus may be used as the college sees fit.
“The more contributions, the greater their endowment fund becomes to assist the college with operations in the current year and future, depending on the restrictions that are put on the contributions by the donors,” Galaski explained.
In the President’s Report, endowments are shown to have risen each fiscal year by the millions. In 2012, the market value was 78.4 million. By 2019, it was 113.4 million. Of course, the document dates from before the pandemic, meaning that the effect of stock market swings caused by Covid-19 remains uncertain.
Additionally, from a cash-flow perspective, Galaski said the college earned 2.7 million dollars in net income due to the value in depreciation, an accounting method of allocating the cost of a tangible or physical asset over its useful life. This includes buildings and various equipment. As Galaski explained, “no cash was and ever will be paid for this item.”
In contrast to the cash-flow perspective, Galaski said the college can be interpreted as having lost money due to depreciation, from an accounting perspective. But he believes this is a misleading statement, since the concept of depreciation does not involve the use of cash, which is only spent on tangible things the day they are brought.
Galaski’s observations about the President’s Report bring to light questions about the state of college finances amid the COVID-19 pandemic. On the possibility of colleges surviving financial fallout with online instruction, Galaski said the result would depend on the college’s perceived normalcy.
“I think it is possible to thrive without in-person attendance; however I believe your business model has to be focused on and set up for online classes,” Galaski said. “Prior to the pandemic, there were plenty of schools that offered only online classes.”
Galaski believes that survival for colleges amid the pandemic would also depend on several other factors, including the focus of its business model. He says that dependence on high quality professors and face-to-face instruction would make things more difficult online, whereas a dependence on low cost classes with more students would adjust easier online.
“Knowing your business model and sticking to it is key for any business to thrive financially,” Galaski said.
Past documentation of the President’s Report can be found at: https://issuu.com/saintvincentcollege.