$5M gift to wipe out Clarke University’s debt

Dive Brief:

Clarke University, in Iowa, is poised to eliminate all of its long-term debt thanks to a $5 million donation, the private Catholic institution said last week. 
The gift, from Clarke alumna Honmai Goodman and her husband, Joseph, follows an announced restructuring last fall that includes eliminating programs and staff and faculty roles. The gift was factored into the plan then, though the donors were previously unnamed.
The university plans to rename a central campus hub that includes a library and academic support center as the Goodman Center, after the couple.

Dive Insight:

As of May 2024, the institution had just under $5 million in long-term debt tied to bonds — roughly the value of the donation, according to its most recently reported financial statements. 

Goodman’s gift covers that total. The retired therapeutic dietitian said in a statement last week that her education and relationships at the university helped shape her life, and that she wanted to return the favor. 

Clarke is currently undergoing academic restructuring that is set to be completed at the end of the current academic year. On the chopping block are undergraduate programs in English, digital media studies, environmental studies, graphic design, health, music, food science, philosophy, religious studies, and Spanish. 

The university’s arts education master’s and nursing practice doctorate will also be shuttered. University officials described the programs as underenrolled, and said 92% of students wouldn’t be affected by the eliminations. 

“We will realign our academic offerings to focus on programs with the highest enrollment and demand,” the institution said in an October statement. 

Along with the program cuts, Clarke said it aimed to cut 23 faculty positions and 12 to 14 staff positions through attrition. The university also suspended retirement contributions to reduce its costs. 

“Clarke has worked for years to address declining enrollment and rising costs; however, current financial realities require more significant action,” the university said at the time. 

While Clarke’s enrollment has been relatively stable in recent years, its 2024 fall headcount of 962 students was down nearly 20% from a decade earlier, according to federal data. Last fall, it said it admitted 240 new students. 

The university’s fiscal 2024 financials show costs rising 4.6% year over year to $21.3 million. At the same time, the institution got a slight boost in net tuition revenue that year and posted a hefty overall operating surplus at $6.1 million. 

Eliminating the university’s debt through the Goodman donation could leave Clarke with meaningful financial flexibility going forward. Many colleges struggle or even shutter entirely have had debt loads that proved burdensome. 

Most recently, Hampshire College in Massachusetts cited its $21 million bond debt — which it failed to refinance — as one of the causes behind its impending closure.