Colleges and universities constantly wrestle with thinking, “we need more revenue.”
Perhaps the issue is about increasing revenue. Perhaps the issue is about reducing expenses.
Either way, the resources to achieve your vision and accomplish your mission has to come from one of seven revenue sources.
The seven legal ways to raise revenue include:
- Recruiting more students to increase tuition revenue
- Raising more money through development
- Borrowing money
- Shifting — Avoiding mission drift or stopping something to do something else
- Focus — Create efficiencies by fixing what’s broken, through training through raising awareness and thus generate more revenue in some ways.
- Alternate revenue streams — is there something you're not doing now that you could do in the future?
- Cooperation — a continuum where two or more institutions cooperate to create efficiencies to save money. On the other end of the continuum, discussing the idea of a merger.
Obviously, you can’t attempt to implement all of these. Of the seven legal ways, which do you feel like offers the most opportunity or the most impact for your campus?
- Is it to recruit more students?
- Is it to raise more money?
- Is it to borrow more money?
- Maybe you have an idea about a shift?
A closer look at three revenue-increasing solutions
1. Recruit more students
When it comes to recruiting, there’s a problem: the cost to recruit a student continues to grow. The solution is not to spend more money. The solution is how to ensure that the money you’re spending on recruiting is spent in a way that ensures a strong ROI.
- You need to be working on the tuition revenue stream by making sure your enrollment strategies are strong. If your retention strategies are strong your financial aid strategy must also be sound
- EAB states, “More than any other piece of your communications infrastructure, [an admitted-students website] serves as a go-to resource for students throughout yield season—the one place that aggregates information they might need from you as decision day approaches.”
- In addition to a robust admissions website and portal, engage students and families with these 9 creative ways to increase college enrollment.
- Build an effective enrollment funnel: ABACC Corporate Partner, Credo, offers 5 tips on how to build your funnel so you can trust the data you have and enroll more best-fit students.
2. Shift Focus
To steward resources wisely and direct them where they will be most effective, use an evidence-based approach for financial decision making. Analyze your internal data to reveal what’s working and what’s not so you can reallocate resources to the strongest-performing programs.
- Consider utilizing the marginal revenue analysis tool from CFO Colleague to determine which academic programs are most advantageous to your institution
- “Academic leaders are faced with tough decisions each day. And as the higher education landscape continuously transforms, it’s never been more important for leaders to have data to support these types of decisions.” Read how Salisbury University builds a data-informed culture to allocate resources.
3. Explore Alternate Revenue Streams
Balancing the budget means balancing revenue streams, particularly in a rapidly changing socioeconomic, cultural, and learning environment.
- The one solution that continues to gain favor because it meets demand is online learning. Planning, implementing, and maintaining online learning solutions may mean you invest a disproportionate amount of resources for the amount of return you’re getting, unless you're committed to going all in.
- Know the market: There are three distinct student populations in the online market of which you need to be aware.
“Higher education institutions across North America feel financial pressure from declining or stagnating enrollment they often look to online education as a way to tap into new markets or accommodate a more non-traditional population. However, when it comes to launching these online programs, institutions often perceive modality to be the key differentiating factor in recruitment efforts”
- Meet people where they are, not where it’s convenient for your institution. Credo again states, “The reality is that we must continue to look beyond traditional-age education into more diverse markets and revenue streams where education is most needed. If higher-education institutions of all sizes and types ignore the emerging adult market within their region or beyond, they tie one arm behind their backs in terms of relevant learning, revenue streams, and balanced fiscal portfolios.” Read the full article at Credo.com
Before you jump into any strategy or plan, you must prayerfully and wisely consider which path is the best and which one to pursue:
- First, explore the best ideas that are the right fit with your institution’s mission.
- Second, evaluate how to take those ideas from idea to concept? What will be the impact on personnel, capacity, and current resources?
- Third, consider what may need to change or be eliminated in order to gain a new revenue stream.
- Finally, ask, “How do we measure what this will cost and what is the potential return on the investment?
When you focus on the ways that offer the most opportunity or the most impact for your campus, you’ll be one step closer to sustaining your institution and ensuring student success.
This article is inspired by the 2019 ABACC webinar, “Mission Focus and Shifting Priorities,” presented in cooperation with Credo Higher Education.