1/When @johnshopkins said it would go need-blind permanently after the $1.8B Bloomberg gift, @JonBoeckenstedt noted they already had the money to do that from their surplus. That figure piqued my curiosity. 
2/So I spent the last few weeks trying to answer this question: What are the annual surpluses of the top 25 national universities? If I didn’t stop looking, you’d never see me again. Turns out there is no single answer.
3/Here are the surpluses of the top 25 privates (in USN&WR rankings) from the IRS Form 990. The number includes realized investment gains/losses, which inflate the numbers. Still, the total sum outstrips the endowments at all but a dozen colleges.
4/ Turns out IRS 990 is just 1 of 3 places surpluses reported. Second, is @usedgov's IPEDS—yet a different number that includes unrealized gains/losses. Third, most u's include it in annual reports—an operating surplus/deficit. 3 places figure is reported, 3 different numbers.
5/Why does this matter to more than the accountants, you ask? Because surveys show that national attitudes toward college are souring. IMHO a lack of transparency and consistency about money/cost in #highered contributes to mistrust and skepticism.
6/Some colleges are on a run of surpluses. Take Harvard: When it announced a $114M surplus at end of 2017, officials described it as “high-water mark for the foreseeable future.” Then just a year later it announced another surplus of more than $196M. harvardmagazine.com/2018/10/harvar…
7/But in fairness, CFOs tell me that surpluses are like endowments: much of the $ is restricted. “If you transfer surplus money from the hospital, you can’t simply use it for financial aid for undergraduates,” said Eugene Sunshine, a longtime senior VP at Northwestern.
8/ Regardless of optics, colleges consider surpluses good fiscal management. Most schools, regardless of their wealth, plan budgets with leftover dollars, at least 3% of overall budget. But the surpluses on some campuses are much higher and that’s what raises questions.
9/ Of course, even if surpluses were easily fungible, figuring out how to spend the $ is another matter. Various constituents have different ideas on how money should be spent. Faculty/staff want pay raises. Students want new classes/facilities. Parents want lower tuition bills.
10/ Bond rating agencies also like surpluses. Susan Fitzgerald at @MoodysInvSvc said they don’t “look for any specific margin” but added, “they are correlated—the higher the margin, the stronger the rating—because it speaks to the strength of the business model.”
11/ Of the 245 private universities Moody’s studied last year, the average operating margin was 4%. The margins ranged, on average, from 9.6% at the universities with the highest bond rating to 3% at those with the lowest.
12/Tony Carnevale, director of the @GeorgetownCEW, told me he finds surpluses troubling. He thinks they should be used for public purposes, such as enrolling more low-income students. Here's a report the center did on that topic in 2017. cew.georgetown.edu/cew-reports/pe…
13/Anyway, I ended up not writing anything on this (beyond all these tweets), but still wanted to share my reporting for those interested. Thanks for listening.
