income generation strategies income generation strategies financing reforms for tertiary education...
TRANSCRIPT
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Income Income Generation Generation StrategiesStrategies
Financing Reforms for Tertiary Education in Financing Reforms for Tertiary Education in the Knowledge Economythe Knowledge Economy
Seoul, 6-8 April 2005Seoul, 6-8 April 2005
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outline of the presentation...
the need for income diversification
the range of income generation sources
the challenges ahead
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outline of the presentation...
the need for income diversification
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reasons to seek reasons to seek additional additional resourcesresources
shrinking public budgetsshrinking public budgets
desire to reduce desire to reduce dependencedependence
increased competitionincreased competition
entrepreneurial cultureentrepreneurial culture
implementation of strategic implementation of strategic planplan
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outline of the presentation...
the need for income diversification
the range of income generation sources
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Resource Diversification Resource Diversification MatrixMatrix
Source: Compiled by Jamil Salmi.
Category of incomeCategory of income
Source of incomeSource of income
GovernmGovernment ent
(national, (national, state, state,
municipalmunicipal))
StudenStudents and ts and familiefamilie
ss
Industry Industry and and
servicesservices
Alumni and Alumni and other other
philanthropisphilanthropiststs
InternationInternational al
cooperatiocooperationn
Budgetary contributionBudgetary contributionGeneral budgetGeneral budgetDedicated taxes (lottery, tax on liquor sales, Dedicated taxes (lottery, tax on liquor sales, tax on tax on contracts)contracts)Payroll taxPayroll tax
XX
XXXX
FeesFeesTuition feesTuition fees Degree programsDegree programs Non-degree programsNon-degree programs Advance paymentsAdvance payments ChargebackChargebackOther fees (registration, labs)Other fees (registration, labs)Affiliation fees (colleges)Affiliation fees (colleges)
XX
XXX X XX
XX
XX
XX
Productive activitiesProductive activitiesSale of servicesSale of services ConsultingConsulting ResearchResearch Laboratory testsLaboratory tests Patent royalties, share of spin-off profits, Patent royalties, share of spin-off profits, monetized patent royalties dealmonetized patent royalties deal Operation of service enterprises (television, Operation of service enterprises (television, hotel, retirement homes, malls, parking)hotel, retirement homes, malls, parking)Financial products (endowment funds, shares)Financial products (endowment funds, shares)Production of goodsProduction of goods Agricultural productsAgricultural products Industrial productsIndustrial productsRental of facilities (land, classrooms, Rental of facilities (land, classrooms, dormitories, laboratories, ballrooms, drive dormitories, laboratories, ballrooms, drive through, concert halls, mortuary space)through, concert halls, mortuary space)Sale of assets (land, residential housing)Sale of assets (land, residential housing)
XXXXXX
XXXXXX
XX
XXXX
XXXXXX
XX
XX
XX
XX
XX
XXXX
Fund raisingFund raisingDirect donationsDirect donations Monetary grantsMonetary grants EquipmentEquipment Land and buildingsLand and buildings Scholarships and student loansScholarships and student loans Endowed chairsEndowed chairsIndirect donations (credit card, percentage of Indirect donations (credit card, percentage of gas sales, percentage of stock exchange gas sales, percentage of stock exchange trade)trade)Tied donations (access to patents, share of Tied donations (access to patents, share of spin-off spin-off profits)profits)Concessions (products sold on campus, Concessions (products sold on campus, names)names)Lotteries and auctionsLotteries and auctions
XXXX
XX
XX
XXXX
XXXXXX
XX
XXXX
XXXXXXXXXX
XX
XX
LoansLoansRegular bank loansRegular bank loansBond issuesBond issues
XX XXXX
XX
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main categories of main categories of revenuesrevenues
budgetbudget
tuition feestuition fees
productive activitiesproductive activities
fund raisingfund raising
loansloans
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tuition feestuition fees
activitiesactivities– degree / non degree programsdegree / non degree programs– labs, exams, etc.labs, exams, etc.– affiliation fees (colleges)affiliation fees (colleges)
clientsclients– in state / out of statein state / out of state– domestic / foreigndomestic / foreign
timingtiming– discounted advance paymentsdiscounted advance payments– charge back paymentscharge back payments
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University of University of LeicesterLeicester
income from fees income from fees (£37m)(£37m)
0
2
4
6
8
10
12
14
Homestudents
Int'lstudents
part timestudents
Distancelearning
£m 2003
Source: John Fielden
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productive activitiesproductive activities Financial Products Financial Products (endowment funds, (endowment funds,
shares)shares) ServicesServices
– ConsultingConsulting– ResearchResearch– Laboratory TestsLaboratory Tests– Patent RoyaltiesPatent Royalties– Operation of Service Enterprises (hotel, Operation of Service Enterprises (hotel,
retirement home, mall, parking, driving retirement home, mall, parking, driving school)school)
Production of GoodsProduction of Goods (agricultural & (agricultural & industrial products)industrial products)
Themed MerchandisesThemed Merchandises Rental of FacilitiesRental of Facilities (land, buildings, (land, buildings,
laboratories, dorms, driving-through, laboratories, dorms, driving-through, mortuaries)mortuaries)
Sale of AssetsSale of Assets
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fund raisingfund raising
directdirect– monetary grantsmonetary grants– equipmentequipment– land & buildingsland & buildings– ScholarshipsScholarships
indirect indirect (credit card, gas sales, % of (credit card, gas sales, % of stock exchange trade)stock exchange trade)
tied tied (access to patents)(access to patents)
concessions, franchising, concessions, franchising, licensing, sponsorship & licensing, sponsorship & partnershipspartnerships
lotteries and auctionslotteries and auctions
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toll universitytoll university
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loansloans
loans from commercial loans from commercial banksbanks
loans from development loans from development banksbanks
bond issuesbond issues
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scopescope
fees: 10-30% fees: 10-30%
other revenues: 10-50%other revenues: 10-50%– USA (public institutions 25%, USA (public institutions 25%,
private institutions 50%)private institutions 50%)
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32.2%
21.7%
19.4%
1.3%
21.3%
4.0%
Government budget
Tuition and fees
Research contracts,grants and donationsEndow ment income
Sales and services
Misc
Sources of Revenues, Public 4-year Institutions in USAYear 2000
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University of Leicester University of Leicester income in 2003 income in 2003
0
5
10
15
20
25
30
35
40
Govt Grants Fees Research Other
% of £155m.UK
Source: John Fielden
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outline of the presentation...
the need for income diversification
the range of income generation sources
the challenges ahead
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the challenges the challenges aheadahead
favorable regulatory favorable regulatory environmentenvironment
enhancement of enhancement of academic missionacademic mission
adequate managementadequate management
level-playing competitionlevel-playing competition
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favorable regulatory favorable regulatory environmentenvironment
budget incentivesbudget incentives
tax advantages for tax advantages for donationsdonations
flexible financial flexible financial proceduresprocedures
legal statuslegal status
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preserving the preserving the academic missionacademic mission
insufficient alignment with insufficient alignment with institutional and academic missioninstitutional and academic mission
teaching staff too busy to teach or teaching staff too busy to teach or do untied researchdo untied research
loss of institutional controlloss of institutional control– what taughtwhat taught– what researchedwhat researched– access for sons or daughtersaccess for sons or daughters
ethical dimensions ethical dimensions
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management management requirementsrequirements
generation of new net returnsgeneration of new net returns
clear and transparent income clear and transparent income distribution rules (and related distribution rules (and related human resources incentives)human resources incentives)
fund raising professionalsfund raising professionals
investment specialistsinvestment specialists
cash-flow managementcash-flow management
contingent planningcontingent planning
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unfair competition?unfair competition?
public institutions using public institutions using public subsidiespublic subsidies
private institutions private institutions indirectly subsidized by indirectly subsidized by public institutionspublic institutions
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conclusionconclusion
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what is the best method?
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it depends…
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Alice in WonderlandLewis Carroll
Alice
Would you please tell me which way I ought to go from here?
Cheshire Cat
That depends on where you want to get to.
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it depends on…it depends on…
country / local circumstancescountry / local circumstances
type of institutiontype of institution
promising fields promising fields
strategic or ad-hoc?strategic or ad-hoc?
linked to academic linked to academic orientation orientation