Tag: HigherEdLeadership

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Beyond the Billion Dollar Headlines: A Realistic Look at College Endowments

March 16, 2026, By Chet Haskell – Private college and university endowments have been much in the news of late. Most of the attention has been paid to the small group of private non-profit universities with endowments in excess of $10 billion. Federal legislation has increased the tax on these very large endowments. The Trump Administration has sought – and in some cases succeeded – to get payments to “settle” claims against the university and to restore suspended Federal research funding.  But focusing on these institutions obscures some important perspectives on endowments and, by extension, their use.

What are the data?

First, the data demonstrate that the vast majority of endowment assets in American higher education are held by a small percentage of wealthy institutions. According to IPEDS data corroborated by the annual NACUBO Commonfund survey, there are only 16 institutions with endowments in excess of $10 billion. These represent a tiny fraction (1.3 percent) of the 1243 private institutions with endowments (and another 328 without endowments). Yet, together they represent more than 50% of all endowments in terms of dollar value ($326.4 billion of a national total of $638.1 billion).

There are another 79 institutions with reported endowments in excess of $1 billion, representing 6.4% of the institutions and 29.9 percent of the national total. There are also 41 institutions with endowments between $500 million and $1 billion. Thus, together, these 136 institutions control total endowment assets in excess of $548 billion. Put differently, these institutions represent 10.9% of all private institutions with endowments, but also control 85.9% of all private endowment dollars.

At the next level, there are 295 institutions with more than $100 million and less than $500 million in endowments. These average $220 million and represent 10.6% of the national total.

Together, the 430 institutions with endowments in excess of $100 million represent 34.6 percent of all private institutions and a staggering 96.2% of total national endowments.

At the lowest level, the 813 institutions with small endowments (less than $100 million, averaging $30 million) are in essence holding almost nothing. They represent 65% of all private colleges, but hold only 3.8% of national endowment assets. This situation is dire for many reasons. These 813 institutions are financially insecure and may lack the resources or the scale to improve their positions independently. They are most at risk to join the growing list of institutional closures. Many of these institutions are venerable anchors of small communities and have played an important role in the diverse ecosystem of American higher education. They have a wide range of missions, specializations, and academic offerings. Yet, they almost uniformly lack the financial basics for longer-term security.

As will be argued below, the 295 institutions with endowments in excess of $100 million (average endowments of $220 million) are also at risk, given the changing demographics and economics of the higher education landscape. While these institutions are unlikely to collapse completely, they are under significant pressure to change their strategies and to consider the impacts of what many observers have dubbed a “coming era of consolidation.”

A final note about very small institutions. IPEDS also identifies 328 institutions without any endowment. Most are tiny specialized or religious colleges, and others have already announced pending closure.

There are also large endowments among some of the public institutions or systems. NACUBO identifies the following examples. There are eight public entities with endowments in excess of $5 billion for a total of $138.7 billion and an average of $17.3 billion. (These data are skewed by the University of Texas Systems $48 billion endowment, much of which comes from State oil revenues.)

The principal difference between these endowments and those of the private institutions is not size, but another measurement: endowment per student. The eight top public institutions have an average per student endowment of $267 thousand, while the eight top private institutions have per student endowments averaging $1.94 million. This perspective will be discussed further below.

What are the limitations of endowments?

First, we must be clear about what endowments are and are not. Endowments, whatever the size, are not simply a pot of money an institution can dip into as needed. Instead, almost all endowments are restricted in various ways as to their use. According to NACUBO, approximately 48% of endowments are restricted to student financial aid purposes. This is of obvious importance, as such aid not only attracts students and facilitates enrollments, but also represents real cash going into an institution’s operating budget. Such aid is of particular importance at a time when most private institutions are discounting their tuition by 50% or more.

There are many other forms of restriction. Buildings, faculty positions, specific programs, and even football coaches are often funded from restricted endowments. Again, these specific purposes limit an institution’s flexibility, especially in times of financial crisis. In effect, a college or university endowment is a pool of separate endowments, each with its own restrictions and purposes. However, neither these funds nor their generated incomes are typically fungible for budgetary purposes.

There are examples of institutional donor-funded endowments that are not restricted to particular uses. These represent a small minority of endowed funds, as most donors have a particular purpose for their gift. Finally, as discussed below, there is a category of quasi-endowments where the institution has decided to fence in certain assets as a form of reserve fund controlled by an institution’s board.

The fundamental concept behind endowments is support of an institution’s mission and existence over long time periods (and the “perpetuity nature” of most endowments is designed as support over VERY long times). While providing funding for the future is an important aspect of institutional sustainability, restricting funding purposes may be counterproductive. Specific purposes – or indeed, institutions themselves – may have no relevance today or in the future. Should institutions exist forever? Should they always maintain the same purposes? Should the restricted purposes continue forever?

Institutions seeking to modify or repurpose a restricted endowment face significant challenges. The guiding principle is the intent of the original donors in making the endowment gift. With donor concurrence, a change in restrictions is simple. However, the donors of many endowments may wish to permit such changes or may not even be alive to consider doing so. In such cases, an institution must get the approvals of probate courts and, in some cases, state Attorneys General, a time-consuming and difficult process.

How do endowments affect budgets?

The traditional rule of thumb for most institutions is to limit the actual use of endowments to a portion of the income generated annually. A common metric is 5% of the value of the endowment. In other words, an endowment of $50 million will be expected to generate roughly 5% or less ($2.5 million) for annual expenditure purposes. Even this is limited, as most institutions try to reinvest income into capital in order to maintain value. If, as in recent years, an endowment actually generates more than 5%, the institution may choose to utilize or recapitalize the excess.

While the wealthy institutions have more capacity to exceed 5% returns and thus decide strategies,  5% is the general rule for smaller institutions. However, as Robert Kelchen points out in a recent blog, more and more schools have increased the draw on their endowments. Of 1202 institutions he studies, in 2024, 43% spent between 4% and 6%. In other words, they spent within the range of the general metric. At the same time, 8% of institutions spent more than 10%. And 13% spent zero, as most of these were tiny institutions with less than $5 million in endowment. (Kelchen citation)

And the $2.5 million in this illustrative example represents multiple purposes and is of limited fungibility. Most likely, half is dedicated to student financial aid. Again, this is important because it represents “real” money, as opposed to discounted aid. Endowment funded student aid contributes dollar for dollar to institutional net tuition revenue, whereas discounted aid means a reduction in net tuition revenue. And for all smaller institutions, net tuition revenues (an effective measure of the value of enrollments) is the coin of the realm.

But using $1.25 million for aid means there is only a similar amount available for all other budget purposes. In a typical operating budget of $80 million, this represents less than 2% of needed revenue. Helpful, but not decisive in financial terms.

Another key concept for endowments (and gifts in general) is whether or not they are substitutional – they pay for a necessary expense (like faculty), thus freeing up tuition dollars for other purposes. A properly funded faculty chair for an essential faculty member “relieves” the general budget from having to fund it. And tuition dollars, once received, can be used for any purpose the institution deems proper.

Unfortunately, many institutions have accepted restricted gifts that are incremental in budget terms – they add to the expense budget. The classic example is the endowment gift for a new facility that does not cover the true cost of ongoing facility maintenance. Or an endowment creates a new program that simply is not fully funded, thus requiring subsidization from other budget resources.

In short, in almost every case, endowments are not the answer to institutional funding challenges. Yes, they can contribute to the bottom line, but it takes a very large endowment to relieve institutions of the need for enrollments and tuition revenue. Indeed, endowments can be a kind of buffer against reality when institutions feel secure in their endowment and fail to take forward-looking strategic decisions.

Even the very largest endowments do not always protect the institutions. During the dramatic stock market declines in 2008-2009, some of the wealthiest institutions cut expenses, laying off employees and shuttering programs. Why? If endowment income covers 20% of the $2 billion operating budget of an institution and that income falls by half, that institution suddenly has a $200 million hole in its annual budget.

There is a category of institutional surpluses often called “quasi-endowments.” An institution fortunate to have a cash surplus may decide to set it aside from regular considerations by imposing board of trustee restrictions on its use. This prudent measure enables an institution to protect such a fund while reserving the capacity for the board to lift restrictions if it so wishes.

The absence of such cash reserves is an Achilles heel for many smaller institutions. If annual financial success is defined as a balanced operating budget, the institution will face difficulty if harder times come unexpectedly or if an opportunity for growth through investment arises. Every institution should do all it can to create cash reserves, even if very modest in scale. Doing so is an indicator of fiscal probity that may provide some room for maneuver either to deal with a crisis or to fund an investment.

What are the strategic considerations?

A rhetorical question that should face every president and CFO is: Would you rather have endowment gifts or current use gifts? Would you rather have a $10 million endowment gift that will generate $500,000 every year in perpetuity or would you rather have three annual current use gifts of $3.3 million? If your short-term future is under stress, the endowment income may be of limited utility, whereas the larger current use income may enable you to make investments or changes necessary to ensure enrollment growth and sustainability.

The strategic plans of most smaller institutions often call for establishing endowed funds of a certain scale. This may not be the best strategy. In the first instance, endowment gifts usually require long periods of engagement and cultivation with potential donors, and time is not on the side of institutions under pressure. While most institutions are unlikely to decline a sizeable endowment gift unless it is truly incremental or it would skew the basic mission, institutions based on enrollments (namely, almost all) must be able to have funding to invest in initiatives designed to grow those enrollments in the near term. An announced strategic goal of establishing an endowment of $100 million may be laudable. But even if achieved, it may not be sufficient to help short-term budgets.

There are examples of smaller institutions engaging in significant capital campaigns that involve a mixture of longer-term endowment objectives. These include restricted endowments for purposes like scholarships or faculty positions and unrestricted funds, as well as amounts of current use non-endowed funds. This type of approach can be successful if there is a strong alumni donor base and there are opportunities for very large gifts. But as all academic development staff know, preparation for such a campaign takes tremendous seedwork and preparation. This approach is unlikely to be successful with institutions lacking a long-term donor engagement and cultivation record.

Another more subjective possibility is the degree to which a commitment to such a campaign strengthens the institution. Perhaps large gifts stimulate other large gifts. Perhaps the raised profile of an institution and its avowed direction encourages potential students choose to enroll. A basic purpose of such a campaign is to make an institution more attractive to students, including through such objectives as new facilities, increased scholarship aid or new programs. It is difficult to imagine a capital campaign that does not also seek to encourage enrollment growth.

The reality – as is often said – is that the three most important things for private higher education are enrollments, enrollments, and enrollments. Sustaining and building enrollments is a complex, Herculean task in an extremely competitive environment. Focusing on enrollment growth – and specifically, net tuition revenue growth – must be the highest priority. The more than 800 institutions with endowments smaller than $100 million are not going to be saved by anything except enrollment growth. Gifts and endowments are positive, but rarely make the survivability difference for smaller institutions.

Conclusion

Indeed, in the context of the current undergraduate demographic decline and the rising costs of providing competitive higher education program, it is hard not to conclude that many smaller institutions will either find some form of partnership or merger in order to achieve economies of scale and resources or they will fail.

The 295 institutions with endowments between $100 million and $500 million are best placed to control their destinies, not because their endowments alone will sustain them, but because they have sufficient resources to buy some time and implement new strategies. Their resources will likely provide opportunities for them to initiate partnerships or to absorb other, weaker partners.  But it is incumbent upon their leadership to be clear-eyed about their strategies and the implementation of these plans.

The 813 institutions with endowments less than $100 million have much less room to maneuver. One possibility is to seek a partnership where they are acquired or are the junior partner. Another is to try to band together with like institutions to build scale. However, it will become increasingly difficult for these institutions to “go it alone.” In the absence of significant enrollment growth, they will always be at high risk.

There is an important potential role for philanthropy here. One example is the Transformational Partnerships Fund, the supporters of which include the Kresge Foundation. This Fund seeks to encourage partnerships between institutions by providing grants for technical, legal, and consulting resources, although their maximum grant of $100,000 is clearly insufficient, especially for institutions already in significant financial trouble. Another example is the State of New Jersey program to encourage consolidation of institutions in that State. The fact of the matter is that it is expensive and time-consuming to plan and consummate a partnership agreement in any circumstance. The institutions most in need of such partnerships are likely the institutions with the least financial capacity to accomplish this.

The coming era of institutional consolidation will favor those institutions that are looking forward in coldly realistic ways. Increased endowments will not provide the difference between success and failure for most institutions. Growing net tuition revenue is the key, and this can only be accomplished through effective enrollment growth combined with sensible expense decisions. And for most institutions, this will mean finding ways to increase scale through some form of partnership or consolidation. The alternatives are grim.

Dr. Chet Haskell serves as Co-Head for the College Partnerships and Alliances for the Edu Alliance Group. Chet is a higher education leader with extensive experience in academic administration, institutional strategy, and governance. He recently completed six and a half years as Vice Chancellor for Academic Affairs and University Provost at Antioch University, where he played a central role in creating the Coalition for the Common Good with Otterbein University.

Earlier in his career, he spent 13 years at Harvard University in senior academic positions, including Executive Director of the Center for International Affairs and Associate Dean of the Kennedy School of Government. He later served as Dean of the College at Simmons College and as President of both the Monterey Institute of International Studies and Cogswell Polytechnical College, successfully guiding both institutions through mergers.

An experienced consultant, Dr. Haskell has advised universities and ministries of education in the United States, Latin America, Europe, and the Middle East on issues of finance, strategy, and accreditation. His teaching and research have focused on leadership and nonprofit governance, with a particular emphasis on helping smaller institutions adapt to financial and structural challenges.
He earned DPA and MPA degrees from the University of Southern California, an MA from the University of Virginia, and an AB cum laude from Harvard University.

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The Inevitable Question: How Can Small Colleges Survive in an Era of Consolidation?

January 5, 2026 – Editor’s Note: Last week we published a synthesis of insights from Small College America’s 2025 webinar series, featuring voices from seven leaders navigating change, partnerships, and strategic decisions. Here, two expert panelists from the December webinar on mergers and partnerships provide a deeper analytical examination of the economic forces and partnership models reshaping small colleges.

By Dr. Chet Haskell and Dr. Barry Ryan. During a recent national webinar titled Navigating Higher Education’s Existential Challenges: From Partnerships and Mergers to Reinvention, in which we served as panelists, we were struck by both the familiarity and the seriousness of the questions raised by senior higher education leaders—particularly those concerning the growing consideration of mergers and partnerships. Most were no longer asking whether change is coming, but which options remain realistically available.

This article builds on conversations from that webinar and complements the recent synthesis of insights shared by our fellow panelists and the college presidents who participated in Small College America’s fall webinar series. Here we examine more systematically the economic forces and partnership models small colleges must now navigate. This article represents our attempt to step back from that conversation and examine more deliberately the forces now reshaping higher education.

Anyone involved with higher education is both aware and concerned about the struggles of small, independent colleges and the challenges to their viability. Defined as having 3000 or fewer students, more than 90% of these institutions lack substantial endowments and other financial assets and thus are at risk.

For many of these institutions, the risk is truly existential. Many simply are too small, too under-financed, too strapped to have any reasonable path to continuity. The result is the almost weekly announcement of a closure with all the pain and loss that accompanies such events.

Why is all this happening? Most of the problems are well known and openly discussed. Since almost all of these institutions are tuition revenue dependent, the biggest threat is declining enrollments. Demographic changes leading to fewer high school graduates are central, a situation exacerbated in many cases by Federal policy changes that discourage international students. But there are many others: excessive tuition discounting leading to reduced net tuition revenue, rising operating costs for everything from facilities to insurance to employee salaries, changes in state and Federal policies, especially student aid policies and restrictions on international students are just some examples.

The reality is that higher education is in a period of consolidation. After decades of growth beginning after the Second World War, the basic economic drivers of the private, non-profit residential undergraduate institutions are slowing down or even reversing. There simply are not enough traditional students to make all institutions viable. The basic financial model no longer works. If it did work, one could expect to see new institutions springing up. This has not happened except in the for-profit sphere, a totally different model known mostly for its excesses and failures. While there is a place for the for-profit approach, it is not in the small liberal arts college world. This is true for the same reason that the small institutions are under stress: the economics do not work.

One crucial challenge is simple scale or, rather, lack thereof. Small institutions have fewer opportunities for achieving economies of scale. Unlike larger public institutions (that have different challenges of their own) these colleges cannot have large classes as a significant characteristic of their modes of delivery. Their basic model assumes a relatively comprehensive curriculum provided through small classes, giving a wide variety of choices and pathways to a degree for undergraduates. But the broader the curriculum, the fewer students per program, almost always without commensurate faculty reductions. The economic inefficiency of the current model is clear.

And there are certain base personnel costs beyond the faculty. Every institution needs a range of administrative personnel (often required by accreditors) regardless of size. Attracting experienced personnel to such institutions is neither easy nor inexpensive.

The undergraduate residential model is both a key element in the American higher education ecosystem and a beloved concept for those fortunate enough to have experienced it. These schools are often cornerstones of small communities. They have produced an inordinate number of future professors and scholars. For example, a 2022 NCSES study provided evidence of doctoral degree attainment being at higher ratios for graduates of baccalaureate arts and science institutions than for baccalaureate graduates of R1 research universities.* The basic matter of scale is central to the liberal arts institutions’ attractiveness for students who may go on to doctoral study: small classes with high levels of faculty interaction; a focus on teaching instead of research; the sense of intimacy and a clear mission.

With proper planning and courage, some of these colleges may yet find ways to survive through some form of merger with – or acquisition by – a larger and stronger institution. Further, with sufficient foresight, many other seemingly more solid colleges may find ways to assure survival through other forms of partnerships.

However, the fact is that only the wealthiest 10% of institutions are not at immediate risk, even though prudence would suggest even they should be considering possible changes in their paths.

What can be done?

There have been multiple efforts to reimagine higher education. Some have been based on technology and have led to the growth of various distance or remote models, some quite successful, other less so. MOOCs were going to take over education generally, but have faded. For-profit models have all too often led to abuses, especially of poorer students. Artificial intelligence is at the forefront of current change concepts, but it is too early to assess outcomes. But small residential colleges have resisted such innovations, in part because they are clear about their education model and in part because they often lack the expertise or the resources to take advantage of change.

Some institutions have sought to mitigate the impacts of their scale limitations through consortia arrangements with other institutions. While significant savings may be achieved through the sharing of administrative costs, such as information technology systems or certain other “back office” functions, these savings are unlikely to be more than marginal in impact.

Other impacts for a consortium may come from cost sharing on the academic side. Small academic departments (foreign languages, for example) may permit modest faculty reductions while providing a wider range of choices for students. Athletic facilities and even teams may be shared, as well as some academic services such as international offices or career services operations. In the case of two of the most successful consortia, the Claremont Colleges and the Atlanta University Center, the schools share a central library. Access to electronic databases certainly creates an easier and less expensive pathway to increased economically efficient use of critical resources.

While the savings in expenses may be considered marginal, the true potential in such arrangements is the chance to grow collective student enrollments by offering more options and amenities than would be possible for a single institution.

However, there are other challenges to the consortium model. A primary one relates to location. Institutions near each other likely can find more ways to take advantage of the contiguity than those widely separated. Examples might be the Five Colleges in Western Massachusetts, the previously noted Claremont Colleges or the Atlanta University Center that links four HBCU institutions in the same city. New examples of cooperation include the recently announce CaliBaja Higher Education Consortium, a joint effort of both private and public institutions reaching across the border in the San Diego/Baja California region.

A different kind of sharing arrangement is represented by initiatives to share academic programs though arrangements where one institution provides courses and programs to others through licensing agreements and the like. An example would be Rize Education, an initiative that seeks to enable undergraduate institutions to expand and enhance academic offerings through courses designed elsewhere that can be readily integrated into existing curricula, thus avoiding the costs of time and money needed to build new programs.

At the other end of the spectrum are straightforward mergers and acquisitions. One institution takes over another. Sometimes this is accomplished in ways that preserve at least parts of the acquired school, even if only for political reasons related to alumni, but the reality is that one institution swallows another.

Another version is a true merger of rough equals. There are numerous examples, one of the best known being Case Western Reserve University in Ohio. In this situation, two separate institutions decided they could both be better together and, over time, they have built an integrated university of quality. A recent example may be the announced merger of Willamette University and Pacific University in Oregon. Such arrangements are quite complex, but may provide a model for certain institutions.

A third model might be the new Coalition for the Common Good. Initially a partnership of two independent universities, Antioch and Otterbein Universities, the Coalition is built on three principles: symbiosis, multilateralism and mission. The symbiosis involves Antioch taking on and expanding Otterbein’s graduate programs for the shared benefit of both institutions. Multilateralism refers to the Coalition basic concept of being more than two institutions as the goal: a collection of similar institutions. Mission is central to the Coalition. The initial partners share long histories of institutional culture and mission, as reflected in the name of the Coalition itself.

Other partnership models are possible and should be encouraged. While it is rare to see a partnership of true equals, as one partner is usually dominant, this middle ground between a complete merger or acquisition and consortia should be fertile ground for innovation for forward thinking institutions not in dire straits. Since there is no single approach to such structures, the benefits to participating partners should be at the core of the approach. These partnerships may be able to address the challenge of scale and provide opportunities for shared costs. Properly presented, they should be attractive to potential students and provide a competitive edge in a highly competitive environment.

The importance of mission and culture

While the root cause of most college declines and failures is economic in nature, it is all too easy to forget the role of an institution’s mission and culture. Many colleges look alike in terms of academic offerings, yet institutions usually have a carefully defined and defended mission or purpose. These missions are important because they help define the college as more than just a collection of courses. Education can serve many different missions and thus mission clarity is crucial to institutional identify. And identity is one way for institutions to differentiate themselves from competition, while also helping to attract students.

Mission is also tied to institutional culture. Colleges have different subjective cultures that serve to attract certain students, as well as faculty and staff members. Spending four years of one’s life ought not to be spent in an impersonal organizational setting. There are multiple individual personal reasons for attending one institution instead of another. Most of these reasons are not entirely objective, but instead depend on an individual’s sense of ‘fit’ in the college setting.

What should institutions be doing?

The stark reality is that for many smaller institutions the alternative to some sort of partnership is likely to be closure. But closure is not to be taken lightly. The impact of these institutions is far-reaching and the human, educational and community costs are very real.

All institutions, regardless of financial assets, should be openly discussing their futures in a changing world. As noted, a few may be able to simply proceed with what they have been doing for years. But this luxury (or blindness) is not a viable or attractive option for most.

Every institution should be looking into the future at its basic model. Is there a realistic path to assuring enrollment and revenue growth in excess of expenses over time? Is there a budget model that provides regular surpluses that can provide a cushion against unanticipated challenges or can enable investment in new initiatives? Are there alternative paths to revenues that can augment tuition, such as fundraising, auxiliary enterprises or the like? And in looking at such questions, an institution should be asking how it can be better off over time with a partner or partners.

Even institutions that examine such matters and conclude it would be advantageous to engage a partner are faced with daunting challenges. First is determining what is desired in a partner and then identifying one. Some colleges feel bound by geography, so can only think about like institutions nearby. Others are more creative, looking to use technology to enable a more widely dispersed partnership.

Once a partner is identified, the path to an agreement is arduous, complex, lengthy and costly. Accreditors, the Department of Education, state boards of higher education, alumni, and all manner of other interested parties must be addressed. This requires external legal and financial expertise. This process is excessively demanding of an institution’s leaders, especially presidents, provosts and chief financial officers. Boards must be deeply involved and internal constituencies of faculty and staff must be brought along.

And once a final agreement is reached, signed and approved, the work has only begun. The implementation of any partnership is also arduous, complex, lengthy and costly. Furthermore, implementation involves deep human factors, as institutional cultures must be aligned and new personal professional partnerships must be developed.

The fact is that many institutions will either enter into some form of partnerships in the coming years, as the alternative will be closure. Unfortunately, the clock is ticking, and unnecessary delays create limitations on available options and increase risks. Every institution’s path into partnerships will vary, as will the particulars of each arrangement. It is incumbent upon boards of trustees and institutional leaders to face such facts realistically and to devise practical plans to move forward. Not doing so would be a dereliction of duty.

Dr. Chet Haskell is an experienced higher education consultant focusing on existential challenges to smaller nonprofit institutions. and opportunities for collaboration. Dr. Haskell is a former two-time president and, most recently, a provost directly involved in three significant merger acquisitions or partnership agreements. including the coalition. for the common good, the partnership of Antioch and Otterbein University.

Barry Ryan is an experienced leader and attorney. has served as a president and provost for multiple universities. He helped guide several institutions through mergers, acquisitions, and accreditation. Most recently, he led Woodbury University through its merger. with the University of Redlands. He also serves on university boards and is a commissioner for WASC.

Haskell and Ryan are the Co-Directors of the Center for College Partnerships and Alliances, launched by Edu Alliance Group in late 2025. It is dedicated to helping higher education institutions explore and implement college partnerships, mergers, and strategic alliances designed to strengthen sustainability and mission alignment.