Strategic Action Group Committee on Resource Competitiveness
An invitation for input
Please review the following report and offer your input before April 22, 2009.
This report presents proposed "Aims" and "Actions" for possible implementation at the University of Houston. These are intended to assist UH to achieve this goal:
You are invited to review this report and offer recommendations, comments, and suggestions to the Committee at:uhstrategicgoal6@gmail.com
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DRAFT, as of March 30, 2009
The University of Houston intends to embark on a series of strategic actions that are bold and innovative so as to serve its students, faculty and staff in the best way possible. It also wants to maximize its impact on, and service to, the region, state, nation, and world. While some of the Action Steps cost little or no money, many come with significant budget requirements. Unfortunately, our timing is less than ideal from an economic standpoint. State budgets are under pressure; endowments have lost value; annual giving is down; and some families will struggle to pay tuition in this environment. The federal picture is complex, with some positive prospects in the stimulus package, but also some troubling long-term aspects with the federal deficit. The University of Houston, though, has considerable momentum guided by a new President and new opportunities for greater recognition at the state level.
This section of the report, then, seeks to identify some ways that UH can expand and diversify its resource base, even during these difficult economic times. We believe that UH can be more strategic about its enrollment strategies that would both improve our academic and financial standing. We believe UH can, long-term, improve its endowment, its annual giving rates, and its connections to its alumni. We believe that we can be more strategic in our approach to tuition and fees and their relationship to need-based aid. We also believe we have further opportunities for improved efficiencies, greater effectiveness, and substantial innovation.
These actions should make a substantial difference when combined with an expansion of the research agenda; greater student success; increased partnerships in the region; an even more competitive athletics program; and greater recognition in the region, state, nation, and world. There is a cost to our ambitions. There’s a greater cost to our inaction.
Action Step F.1.(i). Increase the proportion of undergraduate students enrolled in majors with high state funding formula multipliers.
The state funding formula has variations by program type, in part to reflect various program costs. For example, programs such as engineering, science, pharmacy, and technology all have high formula multipliers. Even though these are higher cost programs, UH already has these programs so the fixed cost portion has already been covered.
The metrics could include increasing the proportion of undergraduate students in high formula multiplier programs by 10% over 5 years.
Action Step F.1.(ii). Increase the proportion of students pursuing Masters degrees, especially professional Masters degrees.
The state funding formula also provides strong support for masters degrees, especially professional masters degrees. Making strategic choices among the masters programs, UH should seek to increase the number of masters students by approximately 500 over a five-year period. Much of the infrastructure is in place for such increases which could yield approximately $5M a year.
The metrics could include increasing the masters degree students by 3% each year for 5 years.
Action Step F.1.(iii). Increase the proportion of Ph.D. and special professional students.
The state funding formula provides significant support for Ph.D. and special professional students. These changes could yield over $4M more per year in state formula funding. Furthermore, the number of Ph.D.s produced is one of the measures in the Top American Research Universities rankings.
The metrics could include increasing the number of Ph.D. students by 100 over 5 years and the number of special professional students by 100 over 5 years.
Action Step F.1.(iv). Secure Health Science formula funding for Pharmacy and Optometry.
In the state funding formula programs classified as Health Sciences receive a high multiplier. While UH does not have a College of Health Sciences, it does have programs such as Pharmacy and Optometry that are health sciences. Receiving this classification would require legislative approval.
The metrics could include the reclassification of Optometry and Pharmacy as health sciences for formula purposes.
Action Step F.1.(v). Increase Student Credit Hours (SCH) taken per student by strengthening advising and scheduling of classes.
The state funding formula is based on SCH generated. The current SCH per student per semester is XXX. Increasing this would not only bring financial benefits, but it would also reduce time to degree and potentially increase four and six year graduation rates. UH will need to expand its advising infrastructure (see also Student Success, Section II.B.) and drive course offerings and class scheduling (including summer school) on a student need basis.
The metrics could include increasing the average SCH per student per semester by 1.0 SCH over 5 years.
Action Step F.1.(vi). Increase line-item funding from the State Legislature.
The State Legislature includes line-item funding in the state budget, especially in areas of high state interest. While UH has benefited from such special funding, it could be even more competitive, including seeking special support for the six themes of the Strategic Actions and other areas of importance to UH and of interest to its legislative delegation.
The metrics could include at least 1 additional special line-item per legislative session with an established target dollar amount.
Action Step F.2.(i). Develop and implement a tuition and fee increase plan, including an increase in need-based aid.
Tuition and fees have increased nationally, particularly in states where state appropriations have been under economic pressure. They will need to increase at UH if its overall resource base is to be competitive and if program quality is to be strengthened. A comprehensive and transparent plan would benefit students and their families. In particular, increases in tuition and fees must not prevent qualified students from benefiting from a UH education; therefore, the plan needs to have an aggressive need-based aid component.
The metrics could include a designated tuition/fee revenue target.
Action Step F.2.(ii). Increase contract teaching revenue.
Contract teaching can include corporate programs, continuing professional education, certain programs with international universities, and special summer programs. All of these should be net revenue producing. UH will need to develop incentives for the development and offering of such programs and expand the entrepreneurial culture.
The metrics could include the number of each type of program offered and the net revenue produced.
Action Step F.2.(iii). Maximize returns from auxiliary enterprises.
The entrepreneurial culture needs to be extended to auxiliary enterprises so that the returns can be reinvested to support related UH goals. Auxiliary enterprises should be market-driven and a comprehensive plan, including revenue expectations, should be developed.
The metrics could include a targeted revenue over expenditure amount for each auxiliary category.
Aim F.3. Restore then Increase UH Endowment Levels.
Action Step F.3.(i). Continue reduced annual payout rate from endowments, at least until the corpus returns to the end of FY08 levels.
At the end of FY08 the UH endowment level was $XXX, as of 1 March 2009 it is $XXX. This reflects the rapid international economic decline which, along with a decline in annual giving, has severely impacted universities and their private funding. For both financial and ranking reasons, it is essential that UH reestablish its endowment base.
The metrics could include a payout plan tied to certain endowment plateau levels.
Action Step F.3.(ii). Increase the number and funding level of endowed professorships and chairs.
There are currently approximately 150 endowed professorships and chairs at UH. This number is inadequate for UH’s Tier One aspirations. Furthermore, the funding level for a professorship and chair is frequently below that of UH’s aspirational universities. With reduced returns and corpus in endowments, it will be important for UH to increase the endowment amounts as it seeks, as a priority, additional endowed professorships and chairs.
The metrics could include a specific goal, such as the addition of at least 10 new endowed professorships/chairs for each of the next 5 years with newly established minimums based on peer and aspirational university levels.
Action Step F.3.(iii). Increase the number and funding level of endowed scholarship.
There are currently approximately 400 endowed scholarships at UH with a minimus corpus of $25,000. With its ambitions to recruit top students from Texas, the nation, and the world, UH will need to nearly double that number. With the reduced payouts of endowments, UH will also need to increase the amount for an endowed scholarship. It will be crucial that UH develop a strategic use for its endowed scholarships.
The metrics could include a specific goal, such as the addition of at least 60 additional new endowed scholarships for each of the next 5 years with newly established minimums based on peer and aspirational university levels.
Action Step F.3.(iv). Increase the number and funding levels for endowments that support specific programs or that provide institutional support.
There are currently approximately $120M in endowments dedicated to specific programs or institutional support. This is significantly below the levels at aspirational universities. Such support can free up resources for other purposes and/or provide significant quality enhancements.
The metrics could include a specific goal, such as adding $4M a year for each of the next 5 years either to existing endowments or new endowments for these purposes.
Action Step F.4.(i). Develop, support, and implement a comprehensive advancement training program for Deans, Chairs, and faculty.
Annual giving can be motivated by everything from overall institutional pride to personal appreciation for a single faculty member. Therefore, it is critical that multiple players be asked to assist in increasing the number of annual givers and the average amount given. This is especially critical when the economic downturn has led to a decline nationally for universities in both the number of contributors and the amount contributed. To be effective, however, Deans, Chairs, and select faculty must receive ongoing training and support for their fundraising efforts.
The metrics could initially include the number and percentage of Deans, Chairs, and identified faculty who complete training. Ultimately, the metrics could include specified increases in the number of contributors and the amount contributed.
Action Step F.4.(ii). Identify and make contact with an expanded donor base.
UH must expand its donor base through a comprehensive approach that includes current contact information for prospective donors, including alumni, philanthropists, corporations, and foundations. Once identified, donors must be effectively approached by the right representative from UH.
The metrics could include the completion of current and accurate directories and an established minimum number of contacts with each defined prospective giver by each identified contactor.
Action Step F.4.(iii). Plan a comprehensive, University-wide capital campaign, including an annual giving component.
UH will need to establish a well-defined set of priorities for its case statement, as well as a specific set of targets for the institution that is disaggregated by college. A feasibility study, including identifying staffing needs, will have to be completed and the timing of the capital campaign will need careful consideration in the current climate.
The metrics would include a capital campaign goal that should include a specified annual giving element.
Action Step F.5.(i). Develop and implement a comprehensive alumni communications plan at both the university and college levels.
The annual giving rate of UH alumni is a currently low 5% (U.S.News 2009). Not only does this impact the financial standing of UH, it is also a measure in some rankings. Most of all, though, great research universities have active and loyal alumni. UH needs to reconnect to more of its alumni using multiple means (mail, electronic, phone, and personal) in a planned and comprehensive approach.
The metrics could include each identifiable alumni having some form of UH contact between 5-7 times a year.
Action Step F.5.(ii). Develop and implement proven activities that reconnect alumni to the University and to their campus.
UH should study proven activities at peer and aspirant institutions that have high alumni annual giving rates and implement those that seem to have the best prospect of success at UH. For example, a number of universities have productive “class of XX” activities; others have university and college open houses.
The metrics could include the establishment of a minimum of 3 events that have high levels of participation and that receive high evaluations from participants.
Action Step F.5.(iii). Identify and implement greater integration of alumni with areas of University life, such as recruitment and admissions, career placement, academic programs, and government relations.
Many universities benefit from establishing formal roles for alumni in helping recruit new students in assisting with career advice and placement, in serving as guest lecturers, and in advocating for the University with the Legislature. These activities need coordination and marketing, as well as a training component.
The metrics could include the number of alumni formally involved in specified activities and an evaluation of their effectiveness.
Aim F.6. Increase Efficiency, Effectiveness, and Innovation.
Action Step F.6.(i). Identify and eliminate, where appropriate, “shadow systems”.
When central operations or services are deemed inadequate, colleges and departments often, understandably, create “shadow systems” (for example, college-based grants accounting; multiple e-mail systems; duplicative budgeting and purchasing activities). UH should conduct a survey to determine where it has multiple shadow systems. It should then solve the central service issue before reducing or eliminating shadow systems.
The metrics could include a reduction in shadow systems and a resulting reallocation of resources towards the aims and action steps in this report.
Action Step F.6.(ii). Develop an incentive program for proposals to increase efficiency, effectiveness, and innovation.
Personnel closest to an operation often can see a better way to do business. However, there are rarely incentives or processes for them to suggest solutions. Indeed, there are often real or perceived disincentives.
UH should develop, support, and market a process to encourage and reward employee proposals that increase efficiency, effectiveness, and innovation.
The metrics could include the number of innovation ideas submitted and the resultant dollars saved.
Action Step F.6.(iii). Reexamine and reengineer summer school to make student need, curriculum sequencing, and revenue enhancement the priorities.
The efficiency of the academic program can often be increased by rethinking summer school. UH should examine whether it should centralize summer school or at least establish guidelines on course selection, minimum enrollment levels, and appropriate compensation levels. Furthermore, it should examine ways to market summer school to new audiences (for example, the large number of Houston college students home for the summer from other institutions who need to pick up a course).
The metrics could include the number and percentage of students taking required courses in the summer; the enrollment level of offered courses; and overall revenue generated.
Some would argue that UH should modify its ambitions to be in line with the current economic climate. However, we believe that by thinking long-term and expanding and diversifying its resource base as described above, UH can afford its ambitions, only adjusting its timetable to align with the available resources.