Educational Resource Development White Paper
During the nation’s economic downturn, community colleges have experienced extraordinary growth under duress. Since 2007, when the recession began, more than 1.4 million additional people have turned to community colleges to pursue education or acquire new job skills, bringing total community college enrollment nationally to about 8.2 million students. In addition, community colleges enroll an estimated minimum of 5 million non-credit students. Currently, community colleges educate 44 percent of all U.S. undergraduates (American Association of Community Colleges, http://www.communitycollegetimes.com/Pages/Campus-Issues/cc-enrollments.asp).
At the same time, however, community colleges have experienced deep cuts in the federal, state and local support that has accounted for 55 percent of their revenue—more than any other higher education sector has experienced (Chronicle of Higher Education, http://chronicle.com/article/Obamas-Best-Bet-5-Billion/128990/).
Even though Michigan’s overall unemployment rate is beginning to drop, in 2010 the number of people who were unemployed for more than 26 weeks reached a record high of 50 percent—higher than any other Midwestern state. Long-term unemployment for workers in their prime working years was also at a record high of 55 percent. The percentage of available low-wage jobs has increased and, perhaps most alarmingly, the unemployment rate for African-Americans increased even as the overall rate decreased. Given these figures, the need for postsecondary credentials that can help workers find and retain good jobs is clear (Michigan League for Human Services, www.milhs.org/publications-reports).
Michigan is in the bottom 10 states in the nation in tax dollars spent per student from 2005–2010 for higher education (State Higher Education Executive Officers Report, http://www.sheeo.org/finance/shef/SHEF_FY10.pdf). Lansing’s tax revenues, which are a central funding source for Lansing Community College, continue to fall as housing values decrease and population numbers decline.
As Michigan’s third largest community college, LCC shares in the State’s economic struggles. These indicators have hurt LCC’s income streams even as the number of students has grown. As a result, LCC has gone through budget cuts and now must compete for these increasingly limited resources.
The College strives to maintain a healthy financial condition while continuing its commitment to academic excellence, but the increasing need for higher academic credentials, changing workforce needs, and the emergence of demands for lifelong education require changes in how LCC develops and maintains its fiscal capacity to deliver high quality academic and occupational programs.
Given these daunting economic and operational trends, it is imperative that the College expands its resources to fully participate in the economic recovery and prepare future workers to fill growing employment needs. Specifically, LCC must invest in alternative resource development to attain federal and private foundation grants, scholarship funds, and individual giving, in order to continue offering high-quality, affordable, and accessible education to everyone seeking it.
National trends in education show that a growing number of people will need postsecondary education or training to be eligible for jobs in the new “knowledge based” economy. According to a study by Georgetown University, 28 percent of jobs will require all workers to have some college attendance or a two-year Associate degree by 2018. (http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/clusters-complete-update1.pdf).
The increase in LCC’s student enrollment from 2006–2010 demonstrates the need for this workplace-related education. Table 1 illustrates this growth.
Table 1. LCC Total Attendance 2006-2010
| 2006 | 2007 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|
| College * | 19,445 | 19,465 | 20,394 | 20,057 | 22,014 |
| Full-time Equivalent | 11,273 | 10,753 | 10,936 | 12,535 | 13,524 |
| Total Credit hours | 169,469 | 169,149 | 173,841 | 188,815 | 209,621 |
Source: Lansing Community College Comprehensive Annual Financial Report 2011 Comprehensive Annual Financial Report
As the least expensive postsecondary education option in a community that continues to face a difficult economic situation, LCC is well-positioned to attract a diverse group of students that will include individuals who are looking for a less expensive option to four-year colleges and universities, those who have recently lost their job and are looking to retool their skills, and those who are seeking further education to remain competitive in the job market.
A 2009 study by Michigan’s Workforce Alliance states that guaranteed access to two years of postsecondary education or training meaningfully invests in Michigan’s workers so that they can fill middle skill jobs in computers, construction, healthcare, transportation, public safety and other in-demand fields.[1] These positions represent the largest share of jobs in Michigan—some 51 percent—and the largest share of future job openings. They are also local, hands-on jobs that are unlikely to be outsourced to other countries (Skills2Compete—Michigan Campaign, http://www.nationalskillscoalition.org/assets/reports-/skills2compete_forgottenjobs_mi_2009-10.pdf). Noted University of Michigan economist George Fulton predicts that Michigan will add a net total of 63,000 jobs this year, an additional 32,000 jobs in 2012, and 45,000 in 2013 (MLive.com,http://www.mlive.com/jobs/index.ssf/2011/11/michigans_economy_is_improving_but_it_st.html).
While the need for specific workforce certification and degrees is increasing, economic recessions have had a negative impact on both state public services and individual finances. The decline in tax revenues results in lower funding of public services and higher unemployment rates, which translates into smaller increases or actual decreases in family income. For college and university students and their families, this impact of the recession has been compounded because the steepest tuition increases have come during recessions when students and families—particularly those from the lowest income groups—are least able to pay.
LCC is strongly committed to helping all students continue to attend the College, but at the same time is facing the daunting challenge of dwindling income from traditional funding sources. To help meet this downturn, the College has increased its in-district tuition in the last year by $3 per credit hour—its first tuition increase in four academic years. With tuition and fees accounting for 40 percent of revenue and few resources available to further diversify income streams for the remaining 60 percent, the College finds itself at a difficult financial intersection as costs rise more quickly than income—despite the tuition increase.
This change has led to funding cuts across the system and continuing pressure from other sources to further cut operating costs. In addition to dwindling resources, the College is receiving criticism from inside and outside about how it is spending the money it does have. These viewpoints expect the College to produce students with high technology, cutting edge job skills and at the same time reduce its overall expenses, which have been increasing each year despite frugal budget planning—9.3 percent from FY 2007–FY 2011. Table 2 illustrates these increases.
Table 2. Expenditure by ACS Category – All Funds Five-Year Trend
Source: Lansing Community College Annual Budget Fiscal Year 2011–2012
Fiscal Year 2012 Annual Budget
To successfully respond to this economic environment, LCC must find and attain other sources of financial support. Now is the time to move this process forward, as the economy begins its recovery and both traditional and non-traditional students remain interested in pursuing postsecondary education. While there has been a decrease in LCC enrollment over the past year, this change reflects current growth in the job market, and possibly fewer students being able to enroll due to tuition and fees increases. This decline is actually returning LCC’s enrollment to pre-recession levels, but it is possible that this number will rise again as veterans return from oversees and seek training to shift their military skills to ones more closely aligned with the job market. Regardless of the number of students, however, the College’s expenses will continue to rise as operating and capital costs increase.
Increased grant funding can play a major role in securing needed outside financial support to help address these rising costs. While some federal grant dollars have diminished in the last two years, many have remained level and some have even increased as government funding priorities have changed. Private foundations, whose support has largely not been pursued by the College, also provide significant funding opportunities that can help meet specialized needs not covered by large-project federal funds. Building individual and corporate giving can play a major role in increasing the College’s income, as well. It is generally true in fundraising that private giving significantly exceeds grant funding.
To demonstrate the potential power of grant funding, however, a research group of academics from several universities and think tanks recently recommended that the federal Departments of Labor and Education develop new grants to pay for job training of about 250,000 less-skilled workers each year, to attain employment in high-growth and well-paying fields such as nursing. These grant funds would not only finance training programs, but would also encourage collaboration between community and technical colleges and employers—activities in which LCC already participates, suggesting it could be quite competitive for these grant funds.
In addition, a proposed federally-funded grant program to retrain displaced workers would help pay for retraining workers who have been displaced from “high tenured” jobs—positions held for a minimum of three years. Researchers found that when these workers landed new employment, their earnings declined by an average of 20 percent. However, they took only half as much of a financial hit if they received two years of additional training (Chronicle of Higher Education, http://chronicle.com/article/Research-Group-Proposes-New/129944).
These two actions demonstrate the strong impact significant grant growth at LCC could achieve.
Individual and corporate giving, as mentioned above, historically bring in more outside funding than grants, and must be more aggressively pursued by LCC. The College has made an excellent start in increasing these funding resources, but the total percentage of this income must continue to grow to meet expanding fiscal need. Currently, individual giving nationally shows no increase over the last year because of the recession’s continuing impact, and fully 65 percent of donors don’t plan to increase their giving this year (Chronicle of Higher Education, http://philanthropy.com/blogs/prospecting/a-stark-outlook-for-fund-raising-in-2012/31840).
However, this situation, despite its less than optimal short-term impact, provides an excellent time to support LCC’s Foundation with the structure and resources to better position it to increase donor giving.
Table 3 shows the increase in LCC’s revenue from grants and gifts over the past five years.
Table 3. Revenue Sources – All Funds Five-Year Trend
Source: Lansing Community College Annual Budget Fiscal Year 2011–2012
Fiscal Year 2012 Annual Budget
One of LCC’s most demanding tasks in the coming years will be to successfully address the challenge of responding to diminishing resources by building a solid and growing base of outside grants and individual giving. To do this, the College must evaluate its current funding sources and develop strategies to cultivate and maintain strong, mutually beneficial funding relationships. It must also develop effective communications strategies that promote the value of LCC and build internal and external enthusiasm for supporting its work. Perhaps most importantly, it needs to consistently demonstrate that it is effectively achieving its mission. Without taking this step, it will be difficult for the College to create an environment that can successfully respond to fundamental shifts in education, culture and the larger economy.
[1] Middle skill jobs are those that require more than a high school diploma but less than a four-year degree.
Category: Briefing Papers, Challenges
