How Revenue is Spent at Liberty University

Liberty University (Liberty) – a private evangelical Christian university based in Lynchburg, Virginia – has been in the news quite a bit over the past few years.  Seems the US Department of Education has been investigating Liberty for violations related to the public reporting of campus crime.  Faced with a large fine (estimated to be $37 million), Liberty seems to be in the hot seat again (the Jerry Falwell, Jr sexual misconduct saga that resulted in Falwell’s resignation as President of the university hit the public forum in 2020), although $37 million is a drop in the bucket for Liberty who has more than $3 billion in net assets.

Key information about Liberty is summarized as follows:

• The campus has 7,000 acres with 177 buildings containing with more than 7 million square feet of space
• Approximately 16,000 students are “residential” students with about half living on campus
• More than 100,000 students take on-line classes
• Have 20 NCAA Division 1 programs with more than 500 student athletes
• More than 3,500 full and part-time faculty
• More than 350 residential programs (on campus)
• Tuition, room, board, and fees are about $43,000 annually or $172,000 for a 4-year degree

In 2022, Liberty reported total revenue of $1.6 billion, most of which came from tuition, room, board and fees ($1.5 billion).

Expenses totaled $1.2 billion in 2022 (not including $52 million in depreciation) and can be categorized as follows:

• $507 million (32% of revenue):  Compensation
• $345 million (21% of revenue):  Grants
• $154 million (9% of revenue):  Purchased Services, Food Services, and Fees (i.e. investment, legal)
• $ 90 million (6% of revenue):  Office-Related Expenses and Supplies
• $ 80 million (5% of revenue):  Other Expenses (no detail provided)
• $ 17 million (1% of revenue):  Non-Capital Equipment
• $ 15 million (1% of revenue):  Travel and Conferences

Liberty spent $1.2 billion of the $1.6 billion raised, or 75% of what they raised with the remaining 25% allocated to the general fund.  Net assets were $3.5 billion at year-end (compared to $3.5 billion at the beginning of the year with no change primarily attributable to net unrealized losses on investments).

Using the above information every $100 was spent as follows:

$100:  Revenue

-$ 32:   Compensation

-$ 21:  Grants

-$   9:  Purchased Services, Food Services, and Fees

-$   6:  Office-Related Expenses

-$   5:  Other Expenses

-$   1:  Non-Capital Equipment

-$   1:  Travel and Conferences

-$ 75:  Total Expenses

 $ 25:  Revenue Remaining:  To General Fund

If you paid $40,000 in tuition, room and board, then the revenue was spent as follows:

 $40,000:  Revenue

-$12,800:  Compensation

-$ 8,400:  Grants (primarily to students)

-$ 3,600:  Purchased Services, Food Services, and Fees

-$ 2,400:  Office-Related Expenses

-$ 2,000: Other Expenses

-$   400:  Non-Capital Equipment

-$   400:  Travel and Conferences

-$30,000:  Total Expenditures

 $ 10,000:  Unspent Revenue:  To General Fund

So, if you paid $40,000, then $21,600 went to compensate staff, pay office expenses, cover purchased services, food, and fees, pay other expenses, non-capital equipment, and cover travel and conferences.  $8,400 was used for scholarships or student aid to other students while $10,000 was added to the general fund.

To read the IRS Form 990 (2021 for the year ending June 30, 2022), click here.