How Hillsdale College Spends Revenue (2022)

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

~Emma Green

Hillsdale College, a small private liberal arts college with 1,400 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 30-33, mid-range SAT 1350-1490 – 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. Tuition, room, board, and fees are about $46,000 annually.

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 2022, Hillsdale College reported $366 million in revenue (compared to $368 million in 2021, $287 million in 2020) with the primary sources being contributions, gifts, and grants ($272 million), tuition ($48 million), and investment income and gains ($30 million).  Unlike most colleges and universities, tuition is not the primary source of income for Hillsdale College.  Over the past 6 years, Hillsdale College has received $1.1 billion (61-74% of total revenue) from contributions, gifts, and grants.

Expenses totaled $214 million (not including $8 million in depreciation) and can be categorized a follows:

• $65 million (17% of revenue):  Compensation
• $41 million (11% of revenue):  Office-Related Expenses
• $35 million (10% of revenue):  Grants (primarily scholarships)
• $29 million (8% of revenue):  Fees for Services (primarily fundraising)
• $17 million (5% of revenue):  Travel and Conferences
• $18 million (5% of revenue):  Other Expenses
• $ 9  million (2% of revenue):  Advertising and Promotion

Hillsdale College spent 58% of revenue, which means every $100 was spent as follows:

$100:  Revenue

-$ 17:  Compensation

-$ 11:  Office-Related Revenue

-$ 10:  Grants (primarily scholarships)

-$  8:  Fees for Services (primarily fundraising)

-$  5:  Travel and Conferences

-$  5:  Other Expenses (no detail provided)

-$  2:  Advertising and Promotion

-$ 58:  Total Expenses

$ 42:  Revenue Remaining:  To General Fund

As illustrated above, $58 out of every $100 was spent on expenses – primarily compensation, office-related expenses, scholarships, and fundraising.  $42 out of every $100 was unspent and added to the general fund,

It is important to note that Hillsdale College received $48 million in tuition fees, which means the average tuition was about $34,000, given a student population of 1,400. $33 million of the $35 million in grants were awarded in scholarships and grants to 1,513 students (about $22,000 each). Note:  the college’s website reports that 99% of students received aid (note:  It is unclear why the website reports 1,400 students while financial aid reports aid to 1,513 students).

At the beginning of the year, Hillsdale College had $1.4 billion in net assets. After adding unspent revenue ($152 million) and subtracting net unrealized losses on investments ($106 million),  Hillsdale College had $1.45 billion in net assets at year-end.

Whether or not an observer agrees with Hillsdale approach to higher education, the school’s numbers are commendable.  Tuition, room and board is about half as expensive as other private liberal arts colleges and yet the school still distributes substantial grants (about $22,000 per student), covers all expenses, and was able to spent $150 million less than they received.

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