UNCF ICB 2015 CFO InstituteKEYNOTE The State of Higher Education: HBCUs

Welcome  Governance and Leadership  Value Proposition  Enrollment Management and Affordability  Academic Quality, Student Success and Completion  Federal and State Policy Shift  Infrastructure  Fiscal Viability: Financial Resources and Stability The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

Governance and Leadership  Trustee qualifications, experiences and selection (diversity)  Presidential qualifications, experiences and selection  Trustee development and training  Presidential development and training  Mission driven, decision-making agility and innovation  Focus on strategic goals and outcomes  Philanthropic culture The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

Value Proposition  Clear definition of the value of an HBCU degree vs other institutions  Changing the public perception of HBCUs  Marketing and branding the value  Appealing to millennials  Ingrain the HBCU value proposition in all faculty, staff and students The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

Enrollment Management and Affordability  Enrollment trends at UNCF institutions (IPEDS)  Federal Parent PLUS Loan Program impact and recent changes effective for  Tuition and discount trends  Rethinking and devising new strategies for recruiting students  More creative ways to enhance student retention The Wesley Peachtree Group, CPAs ____________ wpg-inc.com AVERAGE RESULTS Ratio FTE Enrollment54,39654,71853,81252,93251,000 Tuition Discount25.7%25.1%21.5%22.3%22.9% Tuition Dependency41.0%42.0%43.8%44.2%43.5%

Academic Quality, Student Success and Completion  Reassessment of academic offerings for relevance to mission and market place  Improving student learning outcomes and assessment: standardized assessment tools  Improving student graduation rates and job placement  More effective use of student support programs, mentoring, opportunity exposure  Talented faculty recruitment and retention (knowledge, skills and dedication)  Mode of delivery: online, face-to-face, or a mix The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

Federal and State Policy Shift  Policymakers shifting from making higher education accessible to focusing on outcomes.  30 or so states have at least some form of performance based funding.  Trend will continue even though the present federal administration has abandoned its score card funding model  HBCU inflows are heavily dependent on Title III, IV and other funding (about 80%) very sensitive to any policy changes (eg, PLUS debacle)  Must continue to explore ways to become less dependent on government funding. The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

Infrastructure  UNCF members: Average Age of Facilities, Renewal, Burden and Maintenance  Need to continue to invest in infrastructure to be competitive; tech savvy campus  Since 2006 five years plant indebtedness at UNCF institutions increased by 66% to $1.3 billion (about half came in last 5 years). Net PPE is $2.2 billion. The Wesley Peachtree Group, CPAs ____________ wpg-inc.com AVERAGE RESULTS Ratio Age of Facilities Physical Asset Reinvestment2.0x 2.2x1.9x1.6x Facilities Burden21.0%21.1%19.4%18.0%16.4% Facilities Maintenance13.3%13.9%12.8%12.6%11.9%

Fiscal Viability: Financial Resources and Stability  A look and UNCF member overall financial strength (2014)  Need to reengineer the current business model of low rates, low costs and thin margins  More active engagement of trustees in development and fundraising  Engage in strategic business analysis to enhance revenue, accomplish cost savings through efficiencies, strategically generate and deploy resources  Expand affiliations, collaborations and partnerships  Adopt cost management model to understand institutional costs, break even points, instructional cost drivers, etc.  Unbundling services for pricing affordability The Wesley Peachtree Group, CPAs ____________ wpg-inc.com AVERAGE RESULTS Ratio Composite Financial Index

Closing Comments The Wesley Peachtree Group, CPAs ____________ wpg-inc.com

FCPA, CFE, CGFM, CGMA CEO & Managing Associate Donald K. Murphy, CPA The Wesley Peachtree Group, CPAs UNCF ICB 2015 CFO Institute The State of Higher Education: HBCUs THANK YOU Contact: (404)