70 Smart Revenue Generators (and Moneysavers)
Is there a school in the land uninterested in finding new, additional dollars? Not in these tough times. Here, gleaned from institutions of higher ed all over the country, are good, solid, revenue-generating ideas that are not related to tuition management. Some are classics, beautifully executed, others are novel ideas truly worth noting, and some are so, well, obvious, you may shake your head and say, "Now why didn't we think of that?"
1. Using a bad economy to boost fundraising. Use the bad economy to boost fundraising, and let it push you to ask "unasked" alums for money. At Monroe Community College (NY; part of the SUNY system), the school's annual fund was up a remarkable 36% in 2002 (over 2001), despite the recession. School fundraisers simply "connected the dots" between a trained workforce, and local-area business getting out of the economic slump (90% of Monroe CC grads stay in the community). Those businesses are now "educated" to invest in the workforce development.
2. Increase the number of individuals to approach. At the University of Oklahoma, Development had only 931 prospects in 1995. But in 2002, it developed 3,400 via technology and the use of a search firm hired to match records with databases of the wealthiest people in the U.S., and board members of organizations throughout the world. Development staffers also met with alumni volunteers and had them rank other alumni on the basis of ability to give.
3. Create internal fundraising events. More from Monroe Community College: Don't just create fundraising events, create internal fundraising events to bring in $$ and create a new network of fundraisers. At the Annual Gold Star Dinner, faculty skills such as French lessons, Web page development, even fly-fishing instruction are auctioned off to 250 members of the campus community.
4. Invest in PR, marketing, and internal marketing. Fairfield University (CT) produced a truly comprehensive campaign brochure spelling out the campaign's needs, goals, rationale, institutional impact, volunteer leadership, etc. The school releases a campaign video and publishes an internal/external campaign newsletter three times a year, reporting on progress, gifts, and profiles of selected donors. "Don't underestimate the power of internal marketing; you never know where your next good lead or suggestion will come from," say administrators there.
5. Employ "personalized" telemarketing. Monroe Community College uses a telemarketing firm that hires the school's own students to ask parents for contributions. Instead of ducking commercial marketers, parents are engaged in conversations with students much like their own sons or daughters, who need support to get an education. The campaign targets only parents with a predetermined income level.
6. Put a "face" on donations. Dartmouth College (NH) provides opportunities for donors to meet financial aid students and read their profiles. Administrators figure it's harder to walk away from a needy student you've met.
7. Identify big prospects for big dollars. For major gifts campaigns, Greenville Technical College (SC) identifies big prospects, and then asks for the big dollars. Greenville even eliminated their small gift phone-a-thon to concentrate efforts on the big $$. Bad economies have greater negative impact on smaller gift givers, not bigger gift givers, say Greenville fundraisers. So, focus 80 percent of your time on the 20 percent of donors who give you 80 percent of your money.
8. Use restricted giving. At Dartmouth, administrators adjusted capital campaign strategy after they discovered that financial aid was the single most successful driver of the campaign. Don't be afraid to use restricted giving!
9. Make giving addictive. For Greenville Technical College, the largest single gift ($2 million) came from a donor the consultants predicted would give $10,000. But the school went out of its way to recognize the donor in local papers and newscasts, so he came back and asked what else he could do. The fundraisers told him they needed a major gift, and he donated a percent of a charitable remainder trust he was setting up.
10. Raise the bar for a win-win. Again, from Greenville Technical College: The school used the $2 million gift (described in #9) to raise the bar for others by offering campus naming for a minimum of $2 million. The strategy worked.
11. Don't rush the planning process. Fairfield University conducted a feasibility study up front, to make sure the constituency truly understood what the university was trying to achieve with its campaign. They even took the time to use the constituents in the planning process.
12. Don't neglect the annual fund, when promoting the capital fund. Also from Fairfield University: When the school asked for major campaign gifts, it asked donors to maintain their annual giving. Often, annual funds are flat or even decrease during capital drives. Once donors understood, response was tremendous.
13. Exploit the Internet! More from Fairfield University: Even after the first year of fundraising on the Internet, response was excellent--more and more donors have been contributing online. But Fairfield U fundraisers say: Market it! They originally marketed the URL in university publications and via postcards; it was a real boost to the annual fund. Then they went on to market the Web donating even more aggressively.
14. Bring on creative investment managers. Almost a third of endowment-investment management firm Commonfund's clients are turning to "alternative" investments to make up for lost ground. Popular choices: venture capital investment funds, private equity covering private corporate mergers and buyouts, and hedge funds. These investors claim that in 2002 they had better return than the major indexes. And according to Commonfund's 2003 Interim Report (at close of fiscal year in June), 51% of schools have changed the way their assets are allocated, compared to 29% in last year's interim report. Average percentage of assets now invested in domestic equities: 50%. Fixed income: 29%. International equity: 10%. Alternative assets, including hedge funds: 11%. New investment strategies--including a reallocation of assets and greater reliance on hedge funds and real estate--boosted performance, according to the interim report. Educational endowments gained a modest 2.9% on average, but that was a real improvement over a loss of 5.9% in 2002.
15. Move away from centralized development. In 2000, the University of Wisconsin-Stevens Point moved from centralized development to placing development officers in each of the university's four colleges. Between fiscal 2000 and 2002, the increases in fundraising at the four colleges ranged from 27% to over 400%, and colleges can now place emphasis on raising dollars that are essential to their unique programs.
16. Decentralized budgeting. At the University of Missouri-Kansas City, budgeting was decentralized, making each school responsible for its budget; Central Administration does not take back unspent money as it used to. This encourages the separate schools to be scrupulous about budgeting; they keep their own unspent funds.
Online, Distance & Corporate/Contract Education
17. About full-time online study. Nearly half a million students were enrolled in fully online distance learning programs at Title 4-eligible, degree-granting IHEs in the 2001-2002 academic year. This equates to an estimated $2.4 billion in tuition dollars. If these programs continue to grow annually, by the end of this academic year, we should see nearly 5% of postsecondary students (1 in every 20) studying entirely online, say Eduventures analysts. Schools doing it well: Santa Barbara City College (CA), University of Central Florida, Bismarck State College (ND), Portland Community College (OR), Regis University (CO), Strayer University, and of course, University of Phoenix Online.
18. Opportunity knocks for continuing ed. There are growth markets in higher ed: students of color, adult students, part-time students, and international students. Of these four markets, programs directed at part-time or adult students show the greatest potential for growth, and on many campuses, they're both served by continuing ed. The number of adults aged 25-34 is projected to increase 22% by 2010, and community college enrollments were up, on average, by 12% in 2002. There's great opportunity here, but it needs to be well planned and marketed. Convenience issues are paramount, as is the point of pain to market to. Important: Most students view these programs as commodities, not by brand; there is no institutional loyalty. So, develop a smart marketing plan with direct marketing/direct mail, transit advertising, local press placement, radio, special events, and a dedicated Web site.
19. Don't get into distance ed unless you plan to do it well. The myth is that it will allow IHEs to reach more people for less money; actually, it takes more time, and faculty must limit the number of students they have.
20. Contract or corporate ed is a real revenue-generation solution, but the window of opportunity may narrow quickly as the economy improves. Currently, 60% of adult learning programs are conducted by the corporate sector; 17% by government agencies, and a slim 20% by the postsecondary market (10% are traditional colleges and universities). That 20% figure needs to grow before corporate America recovers financially and moves into (or back into) corporate training and education. The corporate ed market is worth an estimated $60 billion, but IHEs are better equipped to educate the 90 million adult learners in the U.S.
21. Spin off executive education programs. At Ecole de Management de Lyon (France), the executive education program was spun off as a for-profit subsidiary to attract corporate clients (and even individual students) as investors.
22. Get corporate clients to pay for original development costs. Again, at E.M. Lyon, educators won't develop an online course until the school finds a corporate client to pay for the original development costs. After the client is served, the school creates a new version of the course, minus proprietary information, for its own use.
23. Be a contract ed success. Fidelity Investments uses Boston University to teach staffers about IT trends. Walt Disney World staffers learn culinary arts at Valencia Community College's Valencia Institute (FL). JetBlue and JP Morgan Chase turn to New York University for management and financial services education. Contract ed is finally getting attention because schools now see it as a rock-solid revenue generator, while corporations cut back on education initiatives. At BU, contract training pulls in about $5 million in revenue annually (half is IT training). At Central Piedmont Community College (NC) 40% of the school's continuing ed enrollments are for corporate ed.
24. Partner with other IHEs to educate large corporate groups. In partnership with a local technical college, University of Wisconsin-Stevens Point is providing educational services to nearly 6,000 employees of Stora Enso North America (located in WI), a subsidiary of Stora Enso Oy of Finland. Through the program, UWSP is cementing its relationship with the Wisconsin Technical College system, educating a large group of working adults, and generating needed program revenue.
25. Sell faculty consultation services. University of Wisconsin-Stevens Point is growing faculty consultative work in the Wisconsin community through its proposed Economic Development Institute, and personnel are working in the colleges to identify faculty with expertise that can be used by regional business concerns. The consultation will bring in needed revenue, and many faculty consultants will employ students as interns and research assistants, to serve the school's clients.
26. No underwriting for contract education? No problem. Although lack of formal underwriting for contract ed might seem a hindrance, there's a real upside, say administrators behind such initiatives: Continuing ed divisions are free to operate more like true businesses within the university, moving quickly to address customer and student needs, and thus generating revenue on new course offerings.
27. Interesting: Half of all small businesses fail within four years, but higher ed incubator companies boast an 85% survival rate.
28. Top incubator model. At Purdue University (IN), the Purdue Gateways incubator launched more than 40 new companies in information technology, biomedical, manufacturing technology, and software development. Sixteen were founded in 2001 alone; no companies failed in 2001-2002. The incubator facility was built to be debt-free in four years, but made it in three, and at 90% occupancy, it generates enough income to pay for services and staff, too. The Purdue Gateways model is now in demand elsewhere.
29. "The recession reduced our borrowing costs, which made it cheaper for us to build more incubator space," says Ora Smith, president of Scitech (the Science and Technology Campus Corp.), an incubator affiliated with Ohio State University.
30. Launch a school-owned business. At Hocking College (OH), the school owns and operates businesses open to the public, supervised by faculty, and operated by students in business, natural resources, hospitality, and eco-tourism programs: Robbins Crossing (an historical re-enactment village), Hocking Woods Nature Center, and Lake Snowden Education & Recreation Park. Yes, there's added revenue from these ventures, but there's also hands-on learning for Hocking students, and the community partnership has helped grow enrollment.
31. Develop centers that echo regional industry. Washington State University is establishing a Center for Integrated Systems Biotechnology to develop breakthroughs in agriculture, genetics, health care, etc. Biotechnology in Washington employs over 17,000, and more than 200 companies have been developed there in the last five years.
Retailing On Campus
32. Think like a retailer. Retailing experts say that most IHEs know little about retailing, and some do it astoundingly badly. Campus retailers--and administrators--need to think in terms of gross margin per square foot.
33. Use "flex" merchandising. At Cornell University (NY), where annual bookstores sales were approximately $26 million in 2002, "flex merchandising" creates fives times the revenue of most campus bookstores, during textbook rush time.
34. Custom publish. Cornell also leads in custom publishing, which accounts for a sizable 14% ($3.64M) of its campus bookstore biz.
35. Use consultants. Cornell bookstore retailers believe in using consultants. "They can pay off in spades," says the school's associate VP of Business Services, who in an economically depressed 2002 pointed to the optimization of sales at textbook rush times (with sales up to $1 million a day), and to yearly savings of $90K after revamping warehouse logistics.
36. Try outsourcing. At Beloit College (WI), after the campus bookstore was relocated downtown to attract mainstream shoppers, administrators decided to call in Barnes & Noble College Bookstores Inc. to take over the business, add expanded services such as custom ordering and custom publishing, and maximize sales.
37. Join or create collective buying groups. Cornell officials formed a collective buying group (the Retail Alliance) with other IHEs, to purchase faster, better, and cheaper, and integrate operations to save money. Cornell cut its costs by 3%--a sizable chunk of money in an industry where 3% to 5% is the profit level.
38. Enable Web ordering. The Cornell Store also partnered with certain distributors' Web sites, and erected in-store-ordering kiosks to allow customers to order goods online that cannot be sold in the store (such as CDs, software, etc.). The purchasing is transparent; as far as customers know, they're ordering from the campus bookstore. This way, without using floor space, the store can offer 75,000 CDs instead of 5,000--increasing breadth of service, and sales.
39. Let students register for classes and books at the same time. At Bowling Green State University (OH), students can register for classes online, bring those classes up on the screen, and then click over to the campus bookstore's Web site, with all of their course information and required texts. Students can reserve their books before they arrive on campus, and pick them up later, or have them shipped. The school is taking back sales from commercial online textbook vendors.
40. Use value-added selling. At the University of Santa Barbara (CA), the bookstore staff has increased sales though value-added selling. For instance, when the store began to offer a lifetime guarantee on its backpacks, backpack sales soared from 5% of the area market, to 85%. In 18 months, the dominant backpack retailer in the area was forced to close shop; it couldn't compete. The staff tracks customer loyalty through sales data, and adds value-added marketing wherever needed. In the past decade, the store has seen a seven-fold increase in sales overall.
Campus Cards / Financial Services
41. Try e-cards, wherein deposits to the campus card may be made via the Web from traditional bank accounts. E-cards have dramatically decreased foot traffic at the bursar's office at Quinnipiac University (CT), have facilitated more frequent card use, and have made parental deposits easier. According to card experts, with more card activity come more account deposits, which means more revenue for the campus card program if the funds are deposited into a program's interest-bearing general-ledger bank account.
42. Make vendors partners. In 2003, Duke University (NC) had at least 15 commercial vendors accepting its campus card for payment, with each sale yielding a 20% commission to the school. On annual pizza and sub deliveries alone totaling $1.9 million, that added up to almost $400K in commission revenue, in 2002.
43. Market to build card program partners. New marketing and technology companies such as Student Advantage and Blackboard's Bb One have sprung up to help schools build card program partners. After a Student Advantage marketing effort for University of Mississippi at Oxford, the program launched with 28 restaurants, stores, and other local merchants signed on. The marketer will continue to build partners and market the program for three years, with the school getting 10% on each sale transaction. It's a real moneymaker, say school administrators.
44. Tie the card to the credit union. At the University of South Florida, the school simply ties the Card Service office to its own credit union, to offer banking. The school gets $1 from the credit union for every account opened and linked to the card program; the credit union also pays the school card program a flat fee of $2,100 per month ($25,200 annually). But the bulk of the program's revenue comes from a 1% payment the credit union makes to the card office on the total value of the checking and savings accounts opened by students and staff. In one year, that can be another $45K for the school.
45. "Brand" a credit card. Claremont McKenna College (CA) offers a branded MasterCard to 8,300 alumni, via MBNA. The Duke University Alumni Association snags one-third of its annual revenue from its credit card, and the Brown University (RI) Alumni Association realizes $350,000 annually (70% of its non-salary operating budget) from its affinity programs that include a credit card and various insurance products. Affinity credit cards are often the biggest non-dues moneymaker for alumni associations.
46. Market the credit card. At Brown, focused marketing and direct-mail marketing brought a languishing program back to life. Now it's the alumni association's biggest moneymaker.
47. Sell insurance. Life insurance is the insurance most commonly offered through alumni associations, but auto and property are growing areas, as is short-term medical insurance. At Brown, 14% of a recent graduating class signed up for short-term medical insurance--"a level unheard of," say administrators there.
Revenue from Alumni
48. Offer alumni programming--it can bring new revenue streams. At Denison University (OH), it's more than just alumni travel; the programs combine historical lectures with visits to actual Civil War sites, steamboat cruises, etc.
49. Encourage the alumni classroom experience. There are currently more than 260 Institutes for Learning in Retirement affiliated with IHEs in 43 states, DC, and Canada.
50. Provide alumni living. Retirement communities near college campuses are gaining in popularity. Some are directly affiliated with IHEs, some are not: There's Foxwood Village near Penn State; Henton at Elon, near Elon University (NC); Lasell Village near Lasell College (MA); and University Village, near the University of South Florida. Similar communities have sprung up at Amherst (MA), Iowa State, Mount Holyoke (MA), and Northwestern (IL). At Oberlin (OH) and Dartmouth, waiting lists are from two to five years. There are more communities at Indiana U, Duke, Notre Dame (IN), Stanford (CA), and U of Arizona, and at least 37 more schools were planning feasibility studies in 2003. Most communities require entrance fees of at least $100K, as well as monthly maintenance charges. Ka-ching!
51. Offer planned giving and financial services. IHEs--often through licensed and certified financial planners--are expanding the range of services they offer alums; it's not just wills and simple estate planning anymore. Grove City College (PA) is "proactive"; administrators bring all the players--accountants, attorneys, financial planners, and donors--into the same room. "We make sure that donors have easy access to the people who can help them benefit their estates as well as benefit the college," says the school's advancement VP.
Construction / Facilities
52. Rent out office space. San Jose State University (CA) is developing office buildings on campus, two-thirds of which will be rented by the private sector. They can erect one building for about $400 million, and pay for it with the rent they collect over a 12- to 15-year period. During that time, they'll still be taking in a few million dollars profit for the school. After the debt is paid out, they'll bring in $40 to $50 million a year for the school.
53. Generate revenue for maintenance and creation of parking facilities. Wayne State University (MI) has partnered with a site owner developing residential and commercial properties. Half of the spaces will be designated to the owner, half to the school. Wayne State has also partnered with Detroit Public Schools to share parking facility space, and included retail space in the structure, which can be rented or leased to other businesses, restaurants, and stores. And when the public school system is closed, WSU can open the facility to the public, to generate revenue.
54. New Campus Centers for school and community. Monroe Community College is constructing a new $25 million Campus Center, a technologically advanced training, meeting, and conference center. The school will bring community and business leaders to campus, thus strengthening networks of financial support, curriculum development, and job placement.
55. Regional training facilities. Mott Community College (MI) constructed a premier training facility (the Regional Technology Center) with cooperation and funding/grants from city, state, and federal officials. The RTC offers the nation's first associate's degree in Manufacturing Simulation technology, and opened in 2002 with 1,300 students.
56. Clean up cleaning operations. North Carolina State University revamped in-house custodial and housekeeping operations, streamlining a formerly top-heavy organizational chart and workload zones. The school will save more than $750K in the 2003-2004 academic year alone.
57. Save on utilities. Atlantic Cape Community College (NJ) bought utilities through a consortium, then installed a geothermal system to get more economic usage.
Repositioning for Revenue
58. Reposition for tuition dollars. Champlain College (VT) went after a pronounced repositioning to attract more students better able to pay tuition. The school went from a two-year to a four-year institution, with career-oriented majors; turned 12 fields of study into 25; added "current" interests such as multimedia design and e-business--and altered its image dramatically. Champlain now targets high schools in NJ, CT, MA, and VT, to find students who want a "career-building" four-year education--and parents who can pay close to full price.
59. Focus on a niche with a fresh positioning plan. With Drexel University's (PA) intensive focus on technology strength--and an aggressive positioning plan driven by its president, Constantine Papadakis--in five years freshman applications tripled, full-time undergrad enrollment doubled, research funding doubled, and endowments tripled.
Increasing Enrollment for Added $$
60. Project Second Chance. Via a database-reporting program, the University of Detroit-Mercy identified which dropouts were good candidates to re-enroll and pay outstanding balances. Staffers sent letters and phoned 2,200 former students. Three hundred re-enrolled or worked out payment plans, generating almost $1 million, good will--and newly motivated students.
61. Use incentives for enrollment. At the University of Missouri-Kansas City, incentives are offered to units for enrollment increases. The school's internal slogan is: "Enrollment is everyone's business."
62. Don't keep merit awards a secret. At Wilkes University (PA), a "scholarship calculator" on the school Web site allows potential applicants to enter their academic information and immediately receive a response regarding the amount of a merit award, so that they have a better understanding of their true, reduced tuition costs. (Note: Schools doing this should make sure to state--in bold letters--that the scholarship guarantee isn't the only aid available; that need-based aid is also possible once forms have been submitted.)
Using Communications Technology to Free Up Dollars
63. Use unified communications software to revamp communications offerings and create new revenue sources as traditional ones--like providing long distance services--dry up. Grow revenue for new student services that go beyond voicemail: for example, "follow-me" access, schedule management, advanced rules capability for call handling, etc.
64. Find bargain-rate resources. Many schools, seeing advanced telecommunications as a competitive edge in higher ed marketplace, are buying up thousands of miles of fiber-optic cables on the cheap. (When these kinds of assets go on sale, especially when telecom companies fold, it's literally pennies on the dollar, say analysts.) Brigham Young University (UT) is also purchasing bulk long-distance calling circuits from Verizon, instead of paying to lease long-distance packets from local exchange carriers. The school's telecom costs are a fraction of what they would have been, without sacrificing any functionality. Northern Illinois University is working with Verizon Wireless to purchase discounted cellular minutes in bulk, offering them to incoming students for slightly lower-than-market rates, with the school realizing the profit. The school's strategy is also to eventually replace hard-wired phones in the rooms, and the incumbent costs (NIU recently secured a portable cell tower with back-end equipment form Cisco and Nortel). National-Louis University (IL) teamed with neighboring schools to increase purchasing power and get discounts on local exchange carriers. EDUCAUSE (www.educause.edu) and ACUTA (the Association for Communication Technology Professionals In Higher Ed; www.acuta.org) can help schools locate other schools seeking purchasing partners. Visit their Web sites for details.
65. Save on travel. At Brigham Young University, the school's telecom system's videoconferencing capabilities will be used to change the way the school does business with BYU campuses in Idaho and Hawaii. No more flying to Provo for meetings; they'll be conducted over the Internet, saving thousands of dollars each year.
Bet You Never Thought of This One
66. If all else fails, sue for added revenue! The University of Texas filed suit in February 2002, claiming Xerox duplicated and distributed a remote printing program developed at the school. Cornell sued HP for violating its patented method of boosting computer-processing speed (damages were estimated to reach $100 million). MIT sued 94 companies (including Microsoft, IBM, and Polaroid) it said were illegally using patented image-editing software.
67. If all else really fails, sell condoms! The University of Arizona decided to promote safe sex by selling condoms in bulk, and sales were brisk. One student bought 500 condoms right before finals, to distribute in gift baskets as students studied. Before the campaign, the campus pharmacy sold only about 600 condoms a month.
Media Exposure = New Revenue
68. Your stories can bring in $$. PR and advancement pro Frank Dobisky (www.dobisky.com) says, "I know of cases where research stories have led to venture capitalists calling the university, interested in taking a project to the marketplace. I know of cases where stories have triggered spontaneous contributions or gifts. I do know this: Without any media relations, the chances are sharply reduced for making any kind of significant impression to launch a major fundraising campaign, attract students, recruit faculty, or impress alumni."
69. After the story. Don't underestimate the power of a story after it runs. Says Dobisky: "I know of schools that sent out to thousands of people they wanted to influence copies of important stories that ran in national publications. These schools didn't rely on the people they wanted to reach having seen the stories the day they appeared."
70. Ask for help. Why not invite staff, faculty, and students to come up with revenue-generating and money-saving ideas for your institution? After all, you've hired the best, and you're educating fine minds. If these folks can't come up with out-of-the-box ideas, who can? We've seen schools save thousands, for instance, by simply encouraging the turning off of lights when rooms are not in use, and by consolidating class scheduling so that certain campus facilities could remain dormant one day a week, saving on utility costs. Both ideas came from students.