Economic Downturn Hurts Endowments, Buoys Enrollment

By Beacon Staff

Like most investors, Flathead Valley Community College had a rough month in September: The school’s endowment saw about a $475,000 decline. But at the same time, tough economic conditions – coupled with expanded degree programs and class offerings – are ushering more students through the school’s doors.

FVCC’s endowment total had reached about $6 million, according to Ruth Ackroyd, director of college relations, before seeing a 7.9 percent decrease in September. October returns weren’t calculated as of last week, but Ackroyd expected more of the same.

An endowment is created through donations intended for the long-term support of an organization. The endowment principal is invested and the earnings are used to support projects – in the case of FVCC, primarily student scholarships.

Still, Kalispell’s community college fared better than – or the same as – many area schools. Through June 30, the close of the last fiscal year, Carroll College’s endowment was down 5.7 percent or $2.1 million. The University of Montana’s endowment was down about 6.6 percent — a paper loss of about $7.9 million, while Montana State University’s endowment was down 4.5 percent, or about $5.4 million.

“Like other schools, we’re used to weathering these financial storms,” Ackroyd said. “We’re not short-term investors – we’re looking at this over the long haul. Our investments are diverse and fairly conservative, so this hurts, but it’s where you stick it out.”

While the recent economic downtown hurts endowments, it lends itself to increasing enrollment numbers – especially at two-year institutions.

Nationally, two-year community colleges are seeing record enrollment as families squeezed by tough economic times steer high school graduates away from more expensive four-year universities. Also, people who are laid off from their jobs or who want to increase their earning capacity often use economic slowdowns as an opportunity to go back to school.

In early September, FVCC’s enrollment was up about 6 percent over last fall to about 1,300 full-time students, according to Faith Hodges, FVCC director of enrollment planning and research. And late enrollment numbers look like they may push that increase closer to 7.5 percent, she added.

“The economy is definitely playing a part,” Hodges said. “When you take our enrollment and put a trend line along it for unemployment they historically track pretty well.”

Hodges points to the 2003-2004 academic year, when there were several plant closures and the unemployment rate climbed to 5.5 percent as evidence of the trend: FVCC saw its highest enrollment ever that year.

FVCC officials are also quick to point to new programs and class offerings as important contributors to the recent enrollment boost.

“Over the last two to three years, we’ve really seen some significant growth on campus,” Kathy Hughes, FVCC’s vice president of instruction, said.

In that time, Hughes said the school has added at least five new programs, including electrical technology, nursing and graphic design. New buildings such as the Arts and Technology Building and Early Childhood Learning Center as well as new equipment are boosting departments like culinary arts, education and occupational trades, she added.

Efforts to grow FVCC’s online program resulted in a 42-percent online enrollment increase in the 2007-2008 school year. With 60 online courses being offered this fall semester, a majority of students at the school are taking at least one distance education class.

This summer, the school received a grant to start a two-year transfer program in entrepreneurship with the UM and area high schools. The project will also develop an entrepreneurship curriculum to be imbedded in the college’s career and technical programs and put an Entrepreneurship Certificate of Applied Science and entrepreneurship classes entirely online.

“A lot of our students who graduate from programs like culinary arts, electrical technology or building trades plan to start their own businesses,” Hughes said. “Those students can integrate these entrepreneurial classes with that curriculum and get, at least, a basic business understanding.”

In the next year, Hughes said the college will also be working on a common course numbering system with the Montana University System so that credits more easily transfer from a two-year college to any of the system’s four-year colleges.

The school is also hoping to add an aviation program in conjunction with Rocky Mountain College in Billings, where students would complete their first two years – including their pilot’s license and general education credits – in Kalispell.

“It will be a fiscal balancing act if the economic troubles continue,” Hughes said. “But we’re working to give students who are looking to come back to school even more options and opportunity.”