How does your institution fund renewal and replacement needs, and is that funding tied to current facility condition data?

Deferred maintenance is rarely just a facilities problem. For colleges and universities, it is a long-term capital-planning challenge that affects financial stability, the campus experience, safety, and the useful life of physical assets.

How Universities Fund Deferred Maintenance: 4 Strategies from Campus Facilities Leaders

The question is not simply how much work a campus needs. It is how an institution can create a durable strategy for funding renewal and replacement while making priorities clear to finance leaders, executives, trustees, and the campus community.

A 2025 discussion in the NACUBO Community Exchange surfaced several practical approaches from higher education leaders. The examples differ, but they point to a common lesson: successful renewal programs integrate condition data, prioritization, funding, and long-term governance.

1. Build renewal programs into the long-term financial plan

One of the strongest examples came from the University of California, San Francisco. The institution described separate, specifically funded programs for facilities investment needs and scheduled renewal. These programs addressed deferred maintenance, code compliance, building systems, and finishes over defined time horizons.

The programs were included in a ten-year capital plan and a ten-year campus financial plan. Recurring operational funding also supported the team responsible for managing the work.

This structure matters because renewal funding becomes part of the institution's ongoing financial conversation rather than an occasional request assembled after a problem becomes urgent. It also creates a framework for prioritizing projects, adjusting timing when conditions change, and maintaining progress through difficult budget cycles.

What to take away: Treat renewal as a continuing program with dedicated ownership, recurring funding, and a defined planning horizon.

2. Create a dedicated renewal fund with a transparent formula

Duke offered a different approach: a dedicated deferred-maintenance fund established decades ago and supported by a charge based on building area. More recently, the institution adjusted its funding approach to account for inflation and created targeted renewal programs for categories such as roofing, elevators, interior finishes, and smaller projects.

A transparent formula can make renewal needs easier to explain and administer. It provides leaders with a consistent way to discuss the relationship among campus size, asset exposure, and annual funding needs. It also creates a mechanism that can be refined as construction costs, building conditions, and institutional priorities change.

A formula is not a substitute for project prioritization. It is a way to create a repeatable funding base that can then be directed toward the highest-risk and highest-impact needs.

What to take away: A clear funding formula can improve predictability, but it should be paired with current condition data and a risk-based project list.

3. Connect renewal funding to the institution's operating model

Higher education institutions do not all fund renewal in the same way. Housing, auxiliaries, academic facilities, research space, athletics, and administrative buildings may each have different revenue sources, operating requirements, and risk profiles.

In the NACUBO discussion, University of North Texas Housing shared an approach that set a target percentage of gross revenue aside for renewal and replacement, while acknowledging that actual results varied. The broader lesson is that institutions can link renewal funding to the managed portfolio's financial model.

This approach can help facilities and finance teams ask more useful questions:

• Which facilities generate revenue that can support renewal?
• Which buildings require central institutional support?
• How should renewal needs be funded when occupancy, enrollment, or revenue changes?
• Which assets create the greatest operational, safety, or compliance risk?

What to take away: The funding strategy should reflect how each part of the campus operates while maintaining consistent data and prioritization standards across the portfolio.

4. Combine disciplined saving with strategic financing

The University of San Diego described an approach that combined an annual deferred-maintenance budget with a longer-term renewal plan. Its Renaissance Plan used a "save, then spend" model and was paired with bond financing when market conditions were favorable.

This illustrates an important point: institutions may need more than one funding source to address a complex backlog. Annual allocations, reserves, bonds, grants, donor support, and auxiliary revenue can each play a role. The right mix depends on the project type, urgency, repayment capacity, institutional priorities, and timing.

Strategic financing works best when the institution can clearly show which projects are being funded, why they matter, what risks they address, and how they fit into the broader capital plan.

What to take away: Financial flexibility increases when institutions maintain a prioritized project pipeline that can support different funding opportunities as they become available.

What these approaches have in common

These examples use different formulas and funding mechanisms, but they share several foundations:

1. A reliable view of facility conditions: Leaders need current information about asset condition, remaining useful life, risk, and estimated cost.
2. A consistent prioritization method: Projects should be ranked based on factors such as safety, compliance, mission impact, urgency, cost, and operational consequences.
3. A multiyear planning horizon: Renewal needs should be connected to capital and financial plans that extend beyond the next budget cycle.
4. Clear governance: Someone must own the process of reviewing priorities, updating assumptions, and communicating decisions.
5. Stakeholder communication: Facilities, finance, leadership, and campus users need a shared understanding of why projects are prioritized and how funding decisions are made.

A practical framework for building a campus renewal strategy

Institutions looking to strengthen their approach can start with five steps:

1. Establish a baseline. Centralize assessment findings, asset information, useful-life estimates, cost assumptions, and risk indicators.
2. Group needs into renewal categories. Organize projects by building systems, urgency, compliance, operational impact, and expected timing.
3. Model funding scenarios. Compare annual allocations, reserves, revenue-based contributions, bonds, grants, and donor funding.
4. Build a phased capital plan. Map projects across near-, mid-, and long-term horizons so decision-makers can see the full sequence of work.
5. Review the plan regularly. Update priorities as asset conditions, costs, enrollment, campus strategy, and available funding change.

This process turns facility condition information into a decision framework. It helps institutions move from a list of needs to a clear explanation of what should happen first, what can wait, and how different funding paths could support the work.

How Foundation supports data-driven renewal planning

Foundation by Intellis helps higher education teams centralize facility condition data, prioritize investments, and build data-driven long-term capital plans. By connecting assessment findings with risk, cost, timing, and funding scenarios, teams can create a clearer basis for renewal decisions and communicate priorities with greater confidence.

The goal is not simply to document facility needs. It is to create a defensible plan that helps an institution decide where to invest, when to act, and how to extend the life of its assets.

Frequently asked questions

How do universities fund deferred maintenance?

Universities may combine recurring operating allocations, dedicated renewal funds, building-area formulas, auxiliary revenue, reserves, bonds, grants, and donor support. The most effective approach depends on the institution's portfolio, financial model, and project priorities.

What data is needed to prioritize campus renewal projects?

Useful inputs include asset condition, remaining useful life, safety and compliance risk, estimated cost, operational impact, facility criticality, and the timing of likely failure or renewal needs.

How often should a campus renewal plan be updated?

A renewal plan should be reviewed on a regular cycle and whenever major conditions change, such as updated assessment findings, significant cost changes, new compliance requirements, enrollment shifts, or changes in institutional strategy.

Is a fixed funding formula enough to manage deferred maintenance?

No. A formula can create a predictable funding base, but institutions still need reliable condition data and a consistent method for ranking projects by risk, impact, urgency, and cost.

Final thought

There is no single funding model that works for every campus. The strongest strategies are built on the same principles: understand the portfolio's condition, prioritize transparently, plan over multiple years, and connect funding decisions to institutional goals.

When facility data and financial strategy work together, deferred maintenance becomes more than a backlog to manage. It becomes a visible, structured investment plan for the campus's future.