Sustaining the mission of a public university these days requires acting like a private enterprise. With state support barely returning to pre-recession levels, public university presidents and trustees face a stark choice: think and act entrepreneurially or descend into mediocrity—or worse.
Philanthropy has become more important than ever, but fundraising will seldom make up the funding gap.
Additional sources of net income must be developed.
Three possibilities to explore include monetizing university-owned facilities, partnering with business to support facilities costs, and developing or expanding academic programs that yield high income.
- Who said that universities need to own and operate parking lots or dining facilities, much less hold vacant land forever? Turning these resources into usable income through sale or leasing arrangements can help sustain expensive programs in the arts and humanities, for example.
- Developing residence halls in concert with private developers is a tricky business to be sure. But hosting retail operations on the ground level, for example, is one way to add beds at lower or no cost to the institution.
- Creating or expanding specialized, high-demand programs that merit higher tuition and fees can go a long way to maintaining excellence and in subsidizing programs not favored by the market.
To engage in these and similar enterprises demands special knowledge and experience not usually part of the academic administrator’s repertoire. It is important to seek expert legal and financial advice and to learn from the experiences (as well as the mistakes) of other entrepreneurial institutions. Presidents and boards should not wait for the next downturn before pursing these alternatives. Going forward, sustaining public universities will demand strategies that respond to economic realities and opportunities long-familiar to leaders of private enterprises.