How Hillsdale College Spends Revenue

by Anne Paddock

Conservative movements to reform education are often defined by what they’re against.

~Emma Green

Hillsdale College, a small private liberal arts college with 1,600 students in southern Michigan (Hillsdale) is the college virtually no one heard of 20 years ago. Founded by abolitionist, Free Will Baptist preachers nearly 200 years ago in 1844, Hillsdale until recently maintained a small word of mouth following among conservatives attracting students (and conservative parents of smart (avg ACT 30-34, mid-range SAT 1370-1480 – 89-96 percentile, mid-range GPA 3.9-4.0) young people) who want a conservative liberal arts education, which is kind of an oxymoron. Approximately 20% of applicants are accepted, of which 62% opt to enroll.

In “The Citadel” – an article written by Emma Green that appeared in the New Yorker recently – Hillsdale is portrayed as having several hallmarks including a devotion the the western canon (music, philosophy, and works of art that are highly valued in western culture), an emphasis on primary sources rather than an academic’s interpretation, and a focus on producing able, virtuous citizens of students.

In 2021, Hillsdale College reported $368 million in revenue (compared to $287 million in 2020) with the primary sources being contributions, gifts, and grants ($256 million), investment income and gains ($51 million) and tuition ($46 million). Unlike most colleges and universities, tuition is not the primary source of income for Hillsdale College. Over the past 5 years, Hillsdale College has received $861 million (61-70% of total revenue) from contributions, gifts, and grants.

Expenses totaled $184 million (not including $8 million in depreciation) and can be categorized a follows:

$61 million (17% of revenue): Compensation
$35 million (10% of revenue): Office-Related Expenses
$32 million (8% of revenue): Grants (primarily scholarships)
$27 million (7% of revenue): Fees for Services (primarily fundraising)
$12 million (3% of revenue): Travel and Conferences
$10 million (3% of revenue): Other Expenses (no detail provided)
$ 7 million (2% of revenue): Advertising and Promotion

Hillsdale College spent 50% of revenue, which means every $100 was spent as follows:

$100: Revenue

-$ 17: Compensation

-$ 10: Office-Related Revemue

-$ 8: Grants (primarily scholarships)

-$ 7: Fees for Services (primarily fundraising)

-$ 3: Travel and Conferences

-$ 3: Other Expenses (no detail provided)

-$ 2: Advertising and Promotion

-$ 50: Total Expesnes

$ 50: Revenue Remaining: To General Fund

As illustrated above, $50 out of every $100 was spent on expenses – primarily compensation, office-related expenses, scholarships, and fundraising.

It is important to note that Hillsdale College received $46 million in tuition fees, which means the average tuition was about $29,000, given a student population of 1,600. $31 million of the $32 million in grants were awarded in scholarships and grants to 1,559 students (about $20,000 each). Note: the college’s website reports that 99% of students received aid.

At the beginning of the year, Hillsdale College had $1.1 billion in net assets. After adding unspent revenue ($176 million), net unrealized gains on investments ($116 million), and subtracting $6 million for changes in split interest agreements, Hillsdale College had $1.4 billion in net assets at year-end.

To read the IRS Form 990 (2020 for the year ending June 30, 2021), click here.