Catawba celebrates financial recovery
When President Brien Lewis took the helm of Catawba College in April 2012, he immediately recognized there was a significant amount of work to do regarding the college’s finances.
The college was never on the verge of closing, he said, “but there were clearly financial challenges that needed to be addressed as quickly as possible.”
The national financial market tanked in 2008, and the college began to feel the full effect in 2010.
As the college’s financial standing began to deteriorate, the school began to rely heavily on donor’s gifts just to balance the budgets rather than being applied for advancements.
When Lewis came in 2012 Catawba relied on more than $3.5 million dollars in donor gifts just to match their expenses.
Donors paid down part of the debt, and a year and a half ago, the college was able to refinance its debt for almost half a million dollars less than it was previously paying per year.
Catawba is “moving steadily” toward a balanced budget, Lewis said, a step the college’s accrediting body, the Southern Association of Colleges and Schools highly recommends.
“All of our numbers that should be going up are going up, and all of our numbers that should be going down are going down,” Lewis said.
Between a recovering national economy, a new fundraising campaign and an increase in tuition, he said the college is well on its way to financial success.
“Our endowment is higher than I think I’ve ever known it to be,” Lewis said. In fact, Catawba’s endowment currently stands almost double its amount in 2006.
Currently, Catawba’s reliance on donor gifts is down to $1.2 million in 2014-15. A 5 percent tuition increase will go into place beginning next school year. The increase will reduce the school’s reliance on donor gifts even further when offsetting the yearly expenses.
In the state of North Carolina, independent colleges span a large array of program offerings and price points.
“We’re about in the middle of our range of colleges that we compare ourselves to,” Lewis said. “This increase certainly does not move us out of this tier.”
Lewis said he wants Catawba College to be the “right value for the students that come.”
When Lewis took his position at Catawba, the school had a tuition freeze in place, so the tuition rate wouldn’t increase.
He recommended that the school used the Higher Education Price Index to compare Catawba’s salaries, program offerings and technology to other colleges and universities.
“It’s the first time we’ve had a really good look at where we are comparatively,” Lewis said.
Out of that study, the college discovered three primary needs the tuition increase will address: salaries, technology and program improvements and enhancements.
“We’re making it very clear what these extra dollars are going for,” Lewis said.
In order to attract and retain the highest quality faculty and staff, all college employees received a 1 percent salary increase in late 2014 and in June, all fulltime employees who make below the national average for their respective position will receive a 4 percent raise.
“We were not in a position to keep our salary packages at a level that wasn’t as competitive as we need to be,” he said.
The college will also improve technology around campus.
“To keep pace, you want to be on the cutting edge of technology,” Lewis said, adding that students need the experience to work with the types of technology they’ll encounter in the workforce.
The final thing the tuition increase will go toward is program improvements and enhancements.
Catawba is striving to do more in the area of career services and planning, such as offering more support for internships and study abroad programs.
“An increase in tuition, in many cases, seldom gets you new programs. It keeps you up with the cost of living,” Lewis said. “That’s where contributions and endowment are really important to the college. You need to grow.”
Last year, the college initiated a $60 million fundraising campaign to aid that goal of growth. It’s already surpassed the halfway point.
This success is due in large part to key hirings in Catawba’s Development office. Lewis hired Rex Otey in 2013 when long time major gifts officer, Tom Childress retired. Childress still helps in his free time and plays an integral part in current projects. Lewis has also recently added Joey Knight to take over athletic fund raising and Erin Mezgar as a second major gifts officer.
“That doesn’t mean we’re sitting on a piggy bank of $30 million to just spend willy-nilly,” Lewis said.
“Many of the gifts are multi-year commitments,” he said. “We may not see those dollars for many, many years.”
Many of those funds are also earmarked for specific purposes, such as scholarships or to develop a specific program.
Lewis said the college still has to prioritize how it spends its money, ensuring that each dollar goes toward things that meet the school’s mission.
“It is so important for us to have those basic guidelines.”