Forty-three. That’s the percentage of college freshmen who will drop out of school before getting a bachelor’s degree. Community colleges—even worse. There, over 69 percent of students will drop out before receiving a credential. That means only 57 percent of college freshmen—and a mere 31 percent of first-years in junior college—will earn the degree they ostensibly set out to obtain. By any measure, that’s a failing grade.

Bill Gates is a college drop-out—but he knows he’s the exception that proves the rule. That’s why he has committed his foundation to doubling the number of low-income people who earn a post-secondary credential by age 26. President Barack Obama frequently repeats his goal of returning America to having the most college graduates in the world, per-capita, by 2020. Thought-leaders and eminences from both sides of the aisle call for action.

But while the headline numbers command attention all by themselves, the contours of college completion rates suggest bigger problems:

• Almost 60 percent of black college students do not graduate from a four-year program within six years.
• Almost 54 percent of Hispanic college students don’t graduate within six years.
• Male college students are 7 percentage points less likely to graduate than women; black men are 11 percentage points less likely to graduate than black women.
• White female college students are more than twice as likely as black or Hispanic men to graduate from college.
• College students from the top income quartile are almost twice as likely to graduate as students in the bottom quartile.
• Although these ethnic and gender disparities are slightly smaller at the community college level, they are still substantial.

Nor are college graduation rates uniform across educational institutions. Elite universities such as Harvard and Yale have near-perfect graduation rates. Much lower rates persist among the campuses frequented by the students most at risk of dropping out: low-income young people, ethnic minorities, and first-generation college students.

The consequences for these at-risk students of dropping out are high. A bachelor’s degree continues to offer a hefty long-term wage premium over a high school diploma. Moreover, a student who enters college often takes on substantial debt—but the debt doesn’t disappear if she drops out. And the government has little to show for students who receive federal loans and grants but who fail to graduate.

Failing to graduate from college has financial and emotional consequences for individuals—especially given the expectation of everyone from parents and teachers to the President of the United States that they should be bound for college—but it also takes an expensive toll on the public fisc. For example, less than half of federal Pell Grant recipients studying for a bachelor’s complete a degree within six years. In 2010, that means that more than $13 billion in taxpayer grant money will be given toward degrees that will never be awarded. And the Pell Grants represent just a small share of federal and state funds directed to higher education.

In light of this challenge for low-income students and minorities, philanthropists are changing the conversation about college. For decades, colleges, policymakers, and philanthropists have endlessly promoted college access. Get students in the door. That’s the most important thing. Once there, they’ll take care of themselves—or so went the reasoning. College enrollments responded: from 1973 to 1997, the enrollment rate rose by nearly 20 percentage points to slightly under 70 percent of recent high school graduates, and has remained at that level since.

But now, the emphasis is shifting from access to completion. Dozens of foundations and philanthropists—from mega-foundations to small regional funders to individual donors—have re-centered their education grantmaking on college completion.

Their work is diverse and tailored to the communities they serve. They are sponsoring and disseminating research about the problem—and its solutions. They are working with individual students, helping provide much-needed social capital (what one donor calls “college knowledge”) for first-generation college students. They are thinking through a whole range of incentives (for colleges and students alike), looking for cost-effective ways to get students to stay in school. They are working with institutions, from small community colleges to massive research universities, in an effort to improve advising and measurement.

Perhaps most importantly, many philanthropists are finding ways to work backwards, to reach students well before they enter college, getting them ready for the challenges of higher education. Success in college, they have come to realize, begins in the freshman year—of high school.

Diving into Data

“This is a part of the educational system that has not had the kind of attention toward low-income, African-American, and Hispanic outcomes that our K–12 system has had,” says Marie Groark, senior program officer at the Bill & Melinda Gates Foundation. In fact, because graduation rates do not account for lower high school graduation and college enrollment rates among ethnic minorities and low-income students, disparities in college graduation rates are actually understated, according to William Bowen, Matthew Chingos, and Michael McPherson in their 2009 book, Crossing the Finish Line: Completing College at America’s Public Universities.

Finishing high school without being ready for college is the number-one reason students drop out. According to a report from the Bridgespan Group, “Academic preparation is the most effective means of increasing the odds that students will graduate from high school ready for college, matriculate, and eventually receive their degrees.”

Some students, of course, drop out because of financial problems—perhaps because they need to work full-time or deal with urgent financial concerns. “At every point in our analysis we find that students from high-income families are significantly more likely to graduate from college, and to graduate ‘on time,’ than are students with comparable qualifications from low-income families,” write Bowen, Chingos, and McPherson.

Many of the grants made in this area thus far have been intended to refine and publicize what we know about college graduation rates. (The official graduation rate, reported to the government as a condition for receiving federal student aid, is calculated as the percentage of first-year, full-time students who graduate within 150 percent of the time normally required.) One of the first foundations to take on college success in a major way was Lumina Foundation for Education. From 2001 to 2003, it awarded what it calls “the hallmark grants” in order to find and collect knowledge on student success.

Lumina learned that higher participation rates in collegiate activities correlate with higher graduation rates. It sponsored research on first-year programs that help students stay on track—when they are most vulnerable to falling behind. It also funded research into how undergraduate “learning communities” can help at-risk college students.

In 2009, with funding from the Gates Foundation (then a new entrant into the world of college completion), the American Enterprise Institute (AEI) published Diplomas and Dropouts, which pointed out not only that colleges were failing to graduate large numbers of students, but that there is wide variance in graduation rates even among four-year institutions of similar selectivity. In the “non-competitive” category—whose colleges are more likely to enroll low-income, minority, and first-generation collegians—the range in graduation rates between the top third and bottom third is 32 percentage points.

The AEI report was directed to policymakers and thought leaders, but there are useful tools available for students, parents, and guidance counselors, too. With support from Lumina, the Education Trust created CollegeResults.org, which allows users to compare graduation rates for thousands of colleges and universities. They can compile a list for comparison or see where a college fits among peer institutions.

“College Knowledge”

Tuesday, 7:30 in the morning. Even as the silent campus of Indiana University–Purdue University at Indianapolis (IUPUI) waits for the sun to rise, 25 young African-American and Latino men, wearing neckties and neatly pressed slacks, are up and about. Their morning appointment: the weekly meeting of the Student African American Brotherhood (SAAB).

Nathaniel Williams was one of those men. Now a high school teacher, Williams was president of the SAAB chapter before graduating from IUPUI in 2009. The agenda for the morning meetings vary—topics include study skills, men’s health, or relationships—but, Williams says, they always address the “seriousness of the crisis facing the black male in America, and especially the black male in college.”

At IUPUI, it was a big crisis:  only 39 percent of African-American men at IUPUI returned after their first year, and just 12 percent graduated in six years. Thus, IUPUI used a Lumina grant in 2003 to launch a SAAB chapter on campus. SAAB (which also targets Latino men, and is open to all students) provides a student-directed community of support, encouragement, and discipline. SAAB members run their own meetings, Williams says. They set up mentoring relationships between freshmen and upperclassmen.

Through its university-sponsored office, SAAB also offers what student success director Khalilah Shabazz calls “intrusive advising.” She meets with students throughout the semester and helps them cut through university red tape. “We do a lot of text messaging with them,” she says wryly—today’s students seldom respond to email. SAAB also works with African-American and Latino men before they arrive at IUPUI, easing the transition with a summer bridge program.

Student initiative plus university support equals rapid adaptation, as SAAB has expanded in Indiana, says Philip Seabrook, assistant vice president at Indiana University. “The guys at Indiana State in Terre Haute are very serious about wearing a shirt and tie or a full suit on their meeting days,” he explains. “The message is that we’re about business, and we’re about helping each other through this process.”

SAAB members “turn personal passion into academic success,” Shabazz says, and their results back up that conclusion. According to a 2007 Lumina report, SAAB retention rates at IUPUI ranged from 62.5 to 90 percent. And, Seabrook says, the six-year graduation rate for African-American men at IUPUI has more than doubled to 25 percent. One student, Williams recalls, partied his way to a 1.3 GPA—before participation in SAAB gave him the purpose and solidarity he needed to graduate with a 3.08.

As SAAB illustrates, money isn’t necessarily the biggest factor in getting students through college. Culture is equally important—if not even more. Students who graduate tend to have a high level of internalized cultural preparedness for college. Cynthia Rivera Weissblum, president and CEO of the Edwin Gould Foundation, calls it “college knowledge”—the social capital that students need in order to succeed.

The at-risk students philanthropists are keen to help don’t have that reserve of college knowledge, and they have to accumulate it from scratch. They don’t know where to go when they have an academic problem—or even for routine matters like paying tuition and getting a student ID. They don’t know that they can meet with professors during office hours, and their work schedules are busy enough besides that they can’t even make them. And although a young person may have triumphed over the low expectations of an urban high school, college classes are on a whole different level.

Ideally, students should arrive on campus with a reserve of college knowledge. Some grantees are working to achieve this by involving students’ families in the process. “Strategies include engaging parents before their son or daughter starts college, or very early in the first year of college,” says Wendy Ault, executive director of the MELMAC Education Foundation, which supports college retention and completion initiatives exclusively in Maine. “In the freshman year,” she adds, “when the students are quite connected developmentally to their parents, it’s good to have a parent asking, ‘Don’t you have a test in economics coming up?’” One-third of MELMAC’s 18 grantee colleges are engaging parents during the freshman year.

Gains in college knowledge can be fleeting, however. They require hard work in order to be sustained. In 2003, the University of Southern Indiana (USI) used a grant from Lumina to launch a series of online “lessons” for students and their parents. The lessons allowed students and parents to identify areas of struggle with sufficient time to resolve them. “Freshman-to-sophomore retention jumped by more than 10 percentage points when both students and parents participated in the ‘lessons,’” Lumina reported in 2007. But these promising results have failed to translate into gains at USI. The program was discontinued; USI’s six-year graduation rate rose from 31.3 percent in 2003 to 33.2 in 2005, before falling to 30.7 percent in 2007, the last year for which data is available.

There are more promising philanthropic interventions elsewhere in Indiana. “We know that the work that happens in the first year, and particularly in the first semester, makes an enormous impact, particularly for low-income and first-generation students,” says IUPUI’s Scott Evenbeck. Evenbeck is dean of University College—founded in 1997 with support from the Lilly Endowment—into which entering students are enrolled as a “launch pad” to their degree-granting colleges. “We’ve brought retention from the low 60s to 74 percent this year, and the graduation rate has come from the teens to just about 34 percent,” he explains.

University College’s programs for first-year students include mandatory orientation and a summer bridge program to get students acquainted with college life. IUPUI also offers “learning communities”—courses that help freshmen get connected to IUPUI and its academic programs. They are taught by an “academic support team” that includes a faculty member, academic advisor, student mentor, and librarian. “That’s clearly the intervention that’s made the biggest difference,” Evenbeck says.

[For a look at the two big foundations working on college completion today, click here.]

Mastering the Incentives

College knowledge can propel a student to a degree. So can incentives. Philanthropists are well aware of the power of incentives in other areas, from welfare reform to prizes.

The Gates Foundation is examining how incentives—those of both students and colleges—affect graduation rates. “We’re going to explore how the huge amount of financial aid in this country could be used as an incentive to encourage completion,” Melinda Gates said in a November 2008 speech announcing the foundation’s post-secondary strategy. “This will include working with partners to develop changes in tuition and government funding so the college gets less money at the front end, just for enrolling a student, and more at the back end, after that student receives a diploma or credential.”

According to Richard Vedder, executive director of the Center for College Affordability and Productivity, many colleges don’t have the right incentives to graduate students in a timely manner. “There’s actually a cash incentive for colleges not to graduate students!” he exclaims, his voice rising with anxious energy. “From the schools’ point of view, in many cases, they get per-student state subsidies.” Vedder proposes that state and federal policymakers re-orient student aid and college subsidies to focus on student outcomes, especially for students at the margins of performance. Policymakers should restructure subsidies to public colleges to tilt the institutional incentive toward student success.

The Gates Foundation is also experimenting with financial incentives to spur students to finish their degrees. “We will explore how performance-based scholarships can provide greater financial incentive to finish school,” Melinda Gates said. “We have evidence from a pilot study in Louisiana that giving students scholarships if they increase their course load to full-time dramatically increases completion rates. We will be funding a demonstration of performance-based scholarships over the next three years in as many as 8 states and 15 post-secondary institutions.”

MDRC, a research organization that evaluates programs to help low-income families, conducted the Louisiana study. It offered grants of up to $2,000 to low-income students at two New Orleans community colleges who maintained a minimum credit-hour level and GPA. The grants were paid directly to the students, who could use them for non-educational expenses—which can be just as big a reason for dropping out as hefty tuition bills.

Thirty percent more students in the grant-receiving group enrolled in courses in their second semester than in the group that did not receive the support—and MDRC reported that positive effects persisted into subsequent semesters, even though no grant was offered. Although the encouraging results were disrupted by Hurricane Katrina, they are now being tested through 2012 in Ohio, New York, New Mexico, and California.

“In many cases, dropouts, especially low-income students, turn out to be a function of very small amounts of money,” says Mark Schneider, vice president at the American Institutes for Research. “For example, a student might be only $100 short of buying textbooks needed for a course. The student withdraws from the course or, worse yet, fails, loses financial aid, and then drops out. A small but targeted support program can make a big impact—a good opportunity for a donor new to the field or with limited resources.”

From Junior College to Senior Year

Community colleges enroll 44 percent of America’s undergraduates, offering career-focused degree and certificate programs or general coursework that prepares graduates to matriculate at a university. Community colleges are more likely to serve minorities, low-income students, and adult learners. Their three-year graduation rate in 2004 stood at just under 31 percent, although a larger proportion of entering students eventually obtained a two-year degree, four-year degree, or successfully transferred within six years.

These colleges represent a place where philanthropists can drive a wedge in college completion. According to Bowen, Chingos, and McPherson, “students who began their studies at two-year colleges were much less likely to earn bachelor’s degrees than were similar students who started at four-year institutions.” However, they add, students who succeed at community college and transfer to universities “graduate at higher rates than first-time freshmen with similar entering credentials.” If community colleges can boost their own completion and successful transfer rates, suggest Bowen, Chingos, and McPherson, it will boost graduation rates at four-year colleges, too.

To that end, Lumina launched Achieving the Dream in 2004. It’s a coalition of community colleges and charitable organizations with “a student success agenda based on data, making student success the highest priority at the institution,” says Samuel Cargile, Lumina’s vice president for grantmaking. Since then, Achieving the Dream has grown to comprise 102 institutions in 21 states. Lumina’s initial investments have been joined by other philanthropic partners; the other partners’ support for Achieving the Dream now outstrips the $60 million that Lumina has given. Other philanthropies supporting Achieving the Dream colleges include the Winthrop Rockefeller Foundation in Arkansas, Houston Endowment in Texas, College Spark in Washington state, the Heinz Endowments in Pennsylvania, the W. K. Kellogg Foundation and the Kresge Foundation in Michigan, and Knowledge Works Foundation in Ohio.

[For a look at donors who are skeptical about sending all kids to college, click here.]

The goal: practical application. “We’re interested in research that’s action-oriented,” explains James Applegate, Lumina’s senior vice president for program development. Once a college joins Achieving the Dream, it is required to bore down on its student achievement data. Only after rigorous self-analysis is the college guided through a strategy-development process. For example, several colleges wanted to upgrade their remedial education offerings, so they have worked on refining course placement, instilling study skills through remedial classes, and offering individual education programs. Achieving the Dream colleges have found good results with “learning communities,” said Applegate, and Lumina is sponsoring research to learn how to make them work better. Achieving the Dream colleges have also refined their advising and worked with K–12 education leaders to improve college readiness.

Take a look: at Tallahassee Community College (TCC) in Florida, a student opens her computer and logs on to TCC Passport—the student portal. She can access her email and course readings, check on her financial aid, and search the library catalog. And she can keep tabs on how fast she’s completing her degree requirements. TCC Passport gives students red, yellow, and green lights on key college requirements, from courses completed to tuition payments.

“We know a lot about our students that we didn’t used to tell them. Now everything we know about a student shows up in that student’s portal,” says William D. Law Jr., president of TCC. “The student has access to his or her whole record. When the faculty member sits down with a student, the record is fully available to both parties.” TCC Passport is not the college’s only student success initiative. Orientation and advising programs use data to identify students who are falling behind. TCC—one of the first Achieving the Dream colleges—also requires students who are placed into two or more remedial courses to take a “College Success” class.

To support its members’ reforms, Achieving the Dream provides coaches and “data facilitators” to work side-by-side with college administrators. It also works to build a more robust public policy framework for student success. And Achieving the Dream continues to grow. “We have learned a lot, and we think we’re ready to begin connecting to more community colleges with what we’ve learned,” says Applegate.

Ready on Day One

It’s the fact that can’t be ignored.

The number-one factor in college completion isn’t mentoring programs, scholarships, incentives, or institutional reforms. Those can all be helpful. But none of them is nearly as important as a student’s readiness for college-level work. Completion of a rigorous high school course load makes students several percentage points more likely to finish college. Thus, for many philanthropists, college completion begins in high school.

“High schools as currently configured are not working,” says Anne B. Stanton, program director for youth at the James Irvine Foundation in California. “We have young people spending long hours in remedial courses in college.” The problem: by taking a one-size-fits-all approach, many high schools fail to catch the interest—or imagination—of students. By turning them off to education, schools turn students away from post-secondary opportunities—and from opportunities to earn a good living and participate in civic life.

In 2006, the Irvine Foundation created ConnectEd: The California Center for College and Career. ConnectEd promotes “Linked Learning,” a set of reforms at the high school level that combines rigorous academics with relevant experience and the boost students need to pursue post-secondary training. Linked Learning includes four core components: academics (of sufficient rigor to ensure students succeed, without remediation, at a California state university), technical training (an eye toward skill-intensive, well-paying jobs), work-based learning (internships, apprenticeships, and school-based enterprises), and support services (including counseling and supplemental education).

All of these components constitute a “pathway” in a particular industry. However, the academic component leaves students well-prepared to take a different path if they choose, and students can switch between pathways if they like. As an example, ConnectEd’s engineering pathway includes the standard academic core, as well as a series of technical courses designed by Project Lead the Way, such as “Digital Electronics” and “Computer-Integrated Manufacturing.” To engage and inspire students, the engineering pathway includes “integrated units” on topics like naval architecture, bridge building, and ballistic weaponry.

“We believe that Linked Learning will fuel young people’s success in post-secondary education, ensuring that students will be more enthusiastic and boosting their achievement,” Stanton explains. One initial study found that students graduating from a Linked Learning program were more likely to pass the California High School Exit Exam, complete more rigorous courses, and graduate from high school.

In 2009, six California districts (out of 17 that applied) were chosen by ConnectEd to receive funding to offer at least four pathways each. Since each pathway can accommodate 400–500 students, Stanton adds, Irvine’s current grant could affect up to 12,000 young people—and up to 18,000 as three more districts receive implementation grants this spring.

“We’re continuing to build out the post-secondary side of Linked Learning,” Stanton says—focusing primarily on community colleges. Nonetheless, it is a promising approach to setting students on their way to post-secondary success well before they leave high school.

Getting—and Staying—on Track

There are hundreds of programs that help high school students get into college, and probably as many that help them succeed once they’re in. But very few provide a complete bridge to college, spanning the eight or more years from being a high school freshman to college graduation. In New York City, Sponsors for Educational Opportunity (SEO) does just that.

Founded in 1963 in Manhattan, SEO delivers a rigorous academic enrichment program for under-served, low-income minority students. Through SEO’s Saturday Academy, after-school programs, and vacation days spent in school, students spend a total of 60 extra days each year—a 33 percent increase—doing academic work. “Extended education is really the single most significant intervention,” says Cynthia Rivera Weissblum of the Edwin Gould Foundation, which has funded SEO for decades. “We’re talking about sending a young person to college equally as prepared as any student who comes from a well-resourced family.”

SEO offers programs that work to transmit “college knowledge” to students. When it comes time for them to make the leap to college, SEO helps them identify colleges with high graduation rates. In both high school and college, students tap into SEO’s network of 6,000 alumni.

One of the Gould Foundation’s primary contributions to SEO, Weissblum said, has been a rigorous, college-preparatory curriculum that would be the pride of any affluent suburban high school. SEO doesn’t just push its students into college; it makes sure they’re ready for the coursework. “It is irresponsible to send a student to a college where he or she is ill-equipped to compete,” Weissblum emphasizes.

SEO costs $4,000–$5,000 per student per year in high school, and $2,000–$2,500 per student in college, Weissblum says. “And the results are quite outstanding,” she adds. “The average college student at SEO maintains a 3.0 GPA. Ninety-four percent graduate from college within four years.” The high school class of 2009 gained an average of more than 150 points from the PSAT to the SAT—bringing their scores up to the level of students from families earning $160,000 to $200,000 annually. The average SEO student’s annual family income? $33,000.

“Pre-college preparation is the best bang for the buck,” concludes Weissblum.

A continent away, another nonprofit provides students with a bridge and path to college graduation. College Track combines after-school tutoring with college advising, mentoring, and leadership development. The program has one goal: to make sure that every one of its students earns a college degree. In 1997, Laurene Powell Jobs and Carlos Watson founded College Track in East Palo Alto, California. As volunteers working with seniors in a local high school, Powell Jobs and Watson realized that too many motivated students had not taken—or even been offered—the classes required to get into college.

To ensure that kids in the program are ready for college by the time they graduate, College Track enrolls students before they start high school. At least three times a week for four years, students gather at one of College Track’s four centers—there are currently three in the Bay area: East Palo Alto, Oakland, and San Francisco—for three hours of intensive instruction and mentoring support. Indeed, students spend so much time at College Track that they receive the equivalent of a full extra year of high school.

Since 80 percent of College Track students are the first in their families to go to college, the program includes comprehensive college prep activities beyond academics, including college tours and counseling, assistance navigating the application process, and help locating financial aid. To date, College Track students have been immensely successful at getting into college. “Everybody graduates from high school and continues with their education,” says Powell Jobs. What’s more, about 90 percent of them enroll in four-year institutions.

Once in college, students stay in touch with College Track’s college success director, who helps students connect with resources on their campuses. There are also peer groups at colleges where College Track alums have achieved critical mass. Alumni involvement is a core element of College Track. “Our most valuable assets are the students themselves, and we teach the older students how to support younger ones,” Powell Jobs explains.

The results speak for themselves: 70 percent of College Track graduates finish college in six years. Compare that to 24 percent of first-generation students nationwide. Of the College Track students who have already gone on to college, only 7 percent have left without earning a college degree. In 2009–10, the organization had expenses of about $5,000 per student, which includes some small scholarships and grants provided to the students themselves.

Both SEO and College Track have attracted substantial philanthropic capital. SEO’s roster of supporters includes some of New York City’s leading philanthropists, foundations, and companies. College Track draws support from major Bay area philanthropies like the Koret Foundation, the Silicon Valley Community Foundation, and the Stuart Foundation.

SEO is looking to grow, says Weissblum. The cost to double the program’s size over the next four years: $1.2 million. Growth—steady and deliberate, in order to preserve quality—is also on the way for College Track. Its New Orleans center opened in 2008 and now serves 100 students. Overall, College Track currently serves 850 high school and college students. “We have a wait list of five cities where we’d like to open up centers,” Powell Jobs explains. “We want to keep our standards high, though, and are reluctant to grow through franchising or through dissemination of our curriculum and training.”

From Access to Success

A 43 percent drop-out rate is discouraging. Even more dispiriting are the numbers for the students most at risk of dropping out: men, African Americans, Hispanics, and first-generation college students. And if the numbers are dispiriting, imagine the toll on the students who don’t cross the finish line. They’ve fallen short of their country’s aspirations for them—and their aspirations for themselves.

The numbers are important, but not as much as the personal touch. Likewise, reforms in public policy and institutional process at colleges are useful, but the best way to help students succeed is to meet them on an individual, personal level. That might mean peer relationships like those in the Student African American Brotherhood in Indiana, or making information about their academic progress easily accessible, like in Tallahassee. It might mean putting them on a pathway through college to a career that clicks, or building bridges from high school, like at SEO in New York or College Track in East Palo Alto. Big or small, comprehensive or tailored, national or regional—there are many models for philanthropic excellence in college success.

Philanthropists have turned their attention to college success, but they are still at the outset of their work. What they’ve learned thus far will help at-risk students achieve their goals, making the numbers less discouraging along the way.

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This article was originally published in Philanthropy‘s spring 2010 issue.