Chapter 5 Strategic Finance and Resource Optimization Flashcards
What is the main focus of strategic finance in higher education?
An intentional effort to generate and distribute resources in ways that support aspirations focused on student success, equity, and institutional sustainability.
What external factors are affecting the financial model of higher education institutions?
Economic volatility, demographic shifts, challenges related to college affordability, and changing priorities of state legislatures.
What has prompted college leaders to reconsider their approach to strategic finance?
Increasing unreliability of traditional revenue sources and an ongoing affordability crisis.
True or False: Institutions can rely on traditional state funding for financial stability.
False
What are some critical areas that drive the financial bottom line of institutions?
- Class size and fill rates
- Distribution and opportunity cost of release time
- Program margins
- Activity-based costing
- Energy savings
- Success rates of grantmaking activity
What is one of the first steps senior campus leaders can take to address financial volatility?
Identify volatility drivers.
What demographic trend is affecting higher education funding in New York State?
A graying population leading to increased Medicaid obligations and likely decreases in higher education funding.
Fill in the blank: Strategic finance requires a _______ approach to understand costs and performance.
[data-informed]
What has caused a decrease in public higher education funding in Illinois?
A prolonged budget standoff between the state legislature and the governor.
What percentage of higher education funding is now provided by students, according to the State Higher Education Executive Officers?
More than half
What is the impact of financial volatility on hiring faculty?
Difficulties in hiring and retaining faculty due to uncertainty in future funding.
What has been the trend in international student enrollments in U.S. colleges from 2016-17 to 2020-21?
A decrease of 45.6%
True or False: The aging population in New York State has no impact on higher education funding.
False
What is a significant challenge faced by higher education institutions due to external pressures?
Increased competition for international students and loss of tuition revenue.
What is the role of the National Association of College and University Business Officers (NACUBO) in strategic finance?
Encouraging institutions to integrate data and analytics to achieve strategic goals.
What distinguishes the business model of higher education from other sectors?
It is driven by balance and sustainability, not profits.
What are some elements of a business model in higher education?
- Value propositions
- Resources
- Processes
- Revenue formulas
What has been a consequence of decreased state appropriations for higher education institutions?
Limited ability to diversify revenue streams beyond tuition and fees.
Fill in the blank: Institutions must build bridges between the _______ and financial sides of the institution.
[academic]
What framework was developed by rpk GROUP to help colleges and universities in strategic finance?
A measurement framework to catalyze strategic finance across multiple dimensions.
What is a primary goal of institutions facing financial volatility?
To maximize scarce resources without sacrificing academic quality or critical programs.
What is the role of integrated data in strategic finance for colleges?
Integrated data that spans academic and administrative functions connects programs, performance, cost, and revenues
What measurement framework was developed by rpk GROUP?
A framework to catalyze strategic finance across affordability, revenue and spending, efficiency, and outcomes
How much did tuition and fees increase from 1989-90 to 2019-20 at public four-year institutions?
Tuition and fees tripled
