This booklet for trustees of institutions of higher education offers guidelines to enable trustees to fulfill their fundamental responsibility of ensuring the financial health of the institution. Introductory sections address: challenges of the financial environment in which trustees must make decisions; specific responsibilities of the institution's governing board; and the importance of partnership with the administration. The following section raises four central questions for boards that relate to institutional mission, financial planning, and available resources. A method for comparing the institution's strategic indicators with those of similar institutions is offered. Also noted is the importance of monitoring the data sources used for financial decisions. Among principles highlighted in the booklet are the following: (1) for independent institutions in particular, adequate financing is the key to quality and reputation (as well as survival); (2) ideally, boards should focus on review and authorization, the administration on recommendation and management, and both on evaluation; and (3) over time, the total yearly return, including income and capital gains, of the endowment must be equal to or greater than spending for the budget plus inflation. (DB)