In August 2018, the New York University School of Medicine announced that it would be offering free tuition to all admitted students regardless of financial need. While students would still be responsible for the cost of food, housing, transportation and other essential needs, NYU's program saved incoming students from at least $150,000 in tuition costs alone. News reports indicate that applications to NYU's program grew by almost 50% overall and applications from under-represented students doubled.
There are now seven medical schools in the United States offering free tuition to at least some students, with three schools offering free tuition to all students. That leads us to wonder: What would it take for counseling programs to do the same?
The ability to provide free tuition to a graduate student typically requires a program to have a significant endowment fund. Endowments are a relatively common mechanism colleges and universities use to pay for different expenses. They are also a means by which people who are interested in making charitable contributions can support particular causes. The American Council on Education does a great job of describing what endowments are and how they generally work in a higher education setting. But simply put, money donated to an endowment is invested with the goal of generating interest income. The principal in an endowment usually cannot be spent, but universities can use the interest income to support designated operations as defined by each endowment fund.
Now here comes the math: According to the news report, NYU's medical school tuition costs $55,000/student/year. The school of medicine reports it currently has 481 students enrolled. That means NYU needs enough money in an endowment to generate at least $26.5 million dollars a year in interest in order to cover tuition for every student (55,000 x 481 = 26,455,000). Considering that conventional wisdom assumes an average rate of return of 6-7% on an investment, generating that amount of interest requires some serious cash. To meet its goal of fully funding tuition, NYU raised $450 million up front. Sure enough, a 6% annual return on $450 million provides $27 million/year.
Before you think that raising that kind of money would be impossible for counseling, remember that counseling programs usually charge less tuition than medical schools and enroll fewer students. For example, suppose a public university charges $16,000/year for tuition and fees for in-state graduate students. Now suppose that university has a counseling program which admits 20 students a year. Since most counseling programs take 2 years to complete, we can assume a total enrollment each year of 40 students. To cover tuition for every student enrolled, that program would need an endowment generating at least $640,000 in interest each year. Assuming 6% interest each year, the program would need an endowment of about $11 million. That's still a LOT of money. However, a good fundraising campaign can reach that goal if it can demonstrate the value and impact of a donation to potential donors.
Many traditional colleges and universities have development offices dedicated to raising money for the institution. Some offices have more staff than others, and some institutions have higher profiles and larger alumni bases which attract donors. The challenge for counseling programs at these institutions is that they compete with other academic programs, as well as athletic programs, for attention from donors. An additional challenge is that fundraising campaigns often target graduates of specific programs when trying to raise money for a particular endowment. Medical programs raise money from their alumni, law programs raise money from their alumni, and MBA programs raise money from their alumni. Because graduates of counseling programs generally make less money than graduates of medical, law, or MBA programs, counseling programs are at a relative disadvantage with respect to the overall wealth of their potential pool of donors. Raising enough money for an endowment of the kind we have discussed here would involve a broader approach, soliciting not just potential donors with counseling backgrounds but potential donors with any interest in supporting the mental health professions regardless of their personal degree.
Some counseling programs may be located in institutions that lack any kind of organized development office. These institutions may not view fundraising as an important piece of their mission or operations. Programs housed at these institutions face the challenge of building the case for fundraising to their administration.
All of this leaves a big question: how can programs build their case and get the attention of donors?
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