Colleges and universities are increasingly turning to alternative revenue streams, such as grants, private donations, custom publishing, patents, real estate, and profitable graduate courses to help raise revenue. Administrators at these schools say it is the only way they can compete with wealthy private schools that have brand names and large endowments.
Not every plan to boost revenues has worked out successfully, and school administrators often worry about blurring the line between being educators and businesspeople as they look for alternative sources of income. Some of the projects and ideas reviewed in this article are controversial, while others simply make sense and have already been widely adopted.
Potential College Business Ventures
1. Custom publishing: This could include anything from athletic posters to a local professor's textbook. In 2006, Cornell University lead in custom publishing, which was then a sizable 14 percent ($3.6 million) of its campus bookstore business.
2. Selling intellectual property: There are several firms, such as UTEK, that help schools set up patents for their discoveries and also help them find private companies willing to buy or finance them. These companies often think of themselves as intellectual property matchmakers.
3. Do research for local businesses: Through its on-campus laboratory, CARL (Catawba Analytical Research Laboratory), Catawba College (N.C.) has conducted chemical analysis and research projects for area businesses. Businesses paid a fee for students to conduct company research using state-of-the-art equipment and techniques.
4. Sell faculty consultation services: Some colleges encourage faculty with specialized expertise to offer their services to local or national businesses. The faculty and administration decide on a fair way to divide the profits.
5. Internet business: Create a private website hosted on the university's server and sell advertising on it. The advertisers must provide a service to the students and/or generate some income to the university.
6. Partner with a discount card company: Student Advantage works with hundreds of colleges, offering students lower prices on a variety of consumer goods through their national discount service. The college administration earns a portion of the student membership fees.
7. Parking space rental partnerships: Wayne State University in Detroit has partnered with Detroit Public Schools to share parking facility space, and has even included retail space in the structure, which could be rented or leased to other businesses, restaurants, and stores. And when the public school system is closed, WSU could open the facility to the public to generate revenue.
8. Open a campus catering service: Several colleges have successfully experimented with food and event catering services. For example, UMass Catering brings in $2.5 million annually through 500-plus events.
9. Online bookstore: The University of Oregon bookstore sells textbooks, along with everything from clothes to computers. The bookstore's online sales have increased 10 to 12 percent annually.
10. Sell insurance: Several alumni associations partner with well-known insurance companies to sell life insurance to students and alumni. Some colleges are also expanding into auto, property, and short-term medical insurance.
11. Private-public partnerships: One idea that could make a university more competitive is to bring in more faculty members from specific industries. Practical experience along with potential job connections can make a person from private industry a desirable candidate in some fields as long as they are able to meet the basic academic standards.
12. Finance from venture capitalists: There are several venture capital companies who are interested in taking new and innovative projects to the marketplace. They will occasionally offer to finance university research. Sometimes just publicizing a professor's research will result in business propositions, contributions or gifts from private industry.
Continuing Education and Training Options
13. License your courses or other knowledge: For example, Boston University (and other colleges) have successfully been licensing their continuing education programs to a network of academic institutions, consulting organizations, and computer IT training companies in the U.S. and abroad. The licensed programs are marketed as BU products. In the past, BU has generated $1.2 million a year from this licensing.
14. Internal training options: As early as 2006, Maryville College (Tenn.) has saved money on its professional development program by asking expert faculty and staff to share their skills. At one point, there were over 30 workshops offered, led mostly by Maryville staff members, including Customer Service, Computer Skills, Safety, Supervisory, Wellness, and Personal Development. The only expense was the $20 gift cards given to staff workshop leaders.
15. Setting up an area facility: Mott Community College of Michigan 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.
16. Add a new high-demand major: When I taught at Butte Community College in northern California, I was on the committee that began a new Multi Media Studies Department. This field is in high demand and the department is growing quickly.
17. General strategy for continuing education: Require each department to create revenue-generating, continuing-education ideas. A committee can evaluate these ideas and test many of them on a semester-by-semester basis.
18. Summer courses for children: The University of Houston has considered offering summer educational courses for children from kindergarten through grade eight, aimed primarily at the children of working parents. During the summer, they have the classroom space and could hire undergraduates to teach basic courses for younger children (simple arts and crafts, etc.). In addition to raising revenue, this program would increase UH's profile throughout the Houston area.
19. Specialized classes: Tacoma Community College (Wash.) is making a profit on two- to four-week programs for international students who improve their English skills and learn about American culture before committing to a long-term program.
20. International student summer programs: The short-term programs for international students at some colleges, typically two to four weeks, allow them to improve their English skills and to learn about American culture before they decide to commit to longer-term programs. Depending on the length of the program and the size of the group, the fees for such programs range from $1,400 to $3,500 per student.
Cost Savings Options
21. Close unused parts of the campus: Any gaps such as Christmas or summer break are an opportunity to close buildings and other facilities. Just closing an unused swimming pool can save thousands of dollars.
22. Use temperature control devices: There are a variety of HVAC control devices to remotely monitor and adjust temperatures in the dorms and other buildings.
23. Use room lighting control devices: Butte Community College (Calif.) uses dials so anyone turning on classroom lights gets up to an hour at a time. They can easily add more time, but if the classroom is not being used, the lights stay off.
24. Use daylight instead of electricity: One idea is to have custodial staff clean early in the evening (or morning) while there is natural sunlight available, rather than waiting until midnight.
25. Waste management: Encourage more custodial visits to the restrooms to replenish paper towels and toilet paper and turn off water. Making one visit and stocking up leads to lots of waste – water faucets are left running frequently, and students tend to scatter extra toilet paper and towels all over the place.
26. Solar panels on rooftops: Arizona State University has added solar panels to a parking garage rooftop. This powers all lighting in the structure and will eventually save thousands of dollars annually in maintenance and energy costs.
27. Save water: Shower and sink dials prevent the water being left on in the dormitories. Some colleges are also capturing rain water and using it to irrigate the athletic fields. This water is also good for the environment since it contains none of the chemicals normally found in treated city water.
28. Use purchasing cards: Some colleges are controlling purchasing costs by using electronic cards from JPMorgan Chase and other companies. The cards have pre-assigned spending limits, and they offer daily updates to a financials database for near real-time cost control. Benefits include less paperwork, reduction of cash exposure, faster processing time, and invoicing, which saves time, stationery, checks, postage, and filing costs.
29. Reduce the academic overlap between areas: For example, the University of Houston is working on a hybrid degree that shares courses in technical skill development that combines three graphic design courses: Graphic Communication (School of Art), Graphic Communication (College of Technology) and Communication/Media Production (School of Communication).
Cost Sharing Options
30. Reduce printing costs: At California State University, Chico, the "free" student printers, used to run almost nonstop. Eventually, the students got a per-semester printing allowance, and had to pay out-of-pocket for further printing. The wasted printing was reduced dramatically.
31. 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. In 2006, Cornell cut its costs by 3 percent—a sizable chunk of money in an industry where 3 percent to 5 percent is the profit level.
32. Charge for expenses related to sponsored research activity: Faculty or staff who are receiving grants should be encouraged (or required) to pay for the administrative, printing, or other related costs. This can often be factored into the grant application and passed along to the administration.
33. Utility sharing: Carleton College of Minnesota installed a wind turbine in 2004 to generate electricity and then formed a purchasing agreement with a utility company where they can sell any excess power to the utility company.
34. Software capacity: PeopleSoft, Banner, and other multi-purpose software, are often underused, with many of their features never used by many employees. One idea would be to encourage the IT staff to design custom interfaces to allow staff to easily use some of the additional features.
Unused Building and Equipment Rental
35. Rent out the football or basketball stadium for community events such as concerts, swap meets, etc.: The University of Hawaii's Aloha Stadium has hosted a weekend swap meet since 1979. The Aloha Stadium Swap Meet now features over 700 vendors and artists from all over the world. It raises substantial revenue for stadium maintenance and for the university's general fund.
36. Rent out alumni center space: The University of Maryland's Samuel Riggs IV Alumni Center, next to the football stadium, has become a popular venue for alumni wedding receptions, birthday parties, bar mitzvahs, and professional events. North Dakota State University has also rented its alumni center, for everything from small business meetings to weddings.
37. Facility rentals: Borough of Manhattan Community College (N.Y.) rents the college's video production and computer labs when students are not using them to small media companies.
38. Lease roof space for cellular tower antennae: Virginia Commonwealth University, the University of California, Davis, the University of Colorado at Boulder, Duke University, and the University of Pittsburgh are several of the institutions that have successfully leased roof space for cell phone towers.
39. Identify your brand: UCLA used to have more than 100 different logos around the campus and in publications that were sent out to students and applicants. The inconsistency came from a lack of a unified marketing effort, and it meant that every department more or less could do as they pleased when putting together their advertising materials. This resulted in confusion about what made UCLA any different from all the other public universities out there. UCLA hired Highlands Strategic Planning Group, a New Jersey-based research marketing firm, to research its marketing efforts and to help develop a more uniform and identifiable brand.
40. Use a database to track deferred maintenance: A complete facilities inventory and assessment, with information in a database, can make facilities management more consistent and less likely to result in a disaster. This can translate into big savings over the long run. Several firms offer databases to help keep up with the maintenance process.
41. Offer a second chance to qualified students: In 2006, the University of Detroit-Mercy identified which dropouts were good candidates to re-enroll and pay outstanding balances. Their staff contacted over 2,000 former students. Three hundred re-enrolled or worked out payment plans, generating almost $1 million, along with newly motivated students.
42. Allow faculty to supplement their own salaries: For some overload research, stipends from grant funds could be used in the same way that faculty who teach extra get money from overload stipends from state money. This would help promote research and help support faculty.
43. Generate more cost-savings ideas: Invite staff, faculty, and students to come up with revenue-generating and money-saving ideas for your institution.
44. Employ "personalized" telemarketing: Monroe Community College (N.Y.) 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.
45. Endow classrooms and buildings and even individual courses: Most universities will allow a building to be named in exchange for a donation, (The Bill Cosby Mass Communications Center at Central State University, in Ohio, etc.). Some universities are considering the option of endowing individual courses. For example, an introductory petroleum engineering course could be endowed by Chevron or Shell. Similarly, a large accounting firm could endow a large section of introductory accounting or a large financial services firm could underwrite an MBA introductory finance course. These endowments would include logo and advertisement placement in online classes and screen savers in classrooms.
46. Surplus sell off: Sell or auction off on a yearly basis the items that have been sitting in surplus, such as computers, printers, cameras, etc. to faculty and staff. Some universities, such as the University of California at Davis, have a permanent Bargain Barn store where they sell surplus furniture, electronics and other items.
47. Host an interesting event: Monroe Community College has an annual Gold Star Dinner, where faculty skills such as French lessons, Web page development, even fly-fishing instruction are auctioned off to 250 members of the campus community.
—Rick Sheridan is an assistant professor of communications at Wilberforce University (Ohio).