February 26, 2019

Three Financial Strategies to Foster Change in Higher Education

Managing Change

By Elliot Felix

In our work helping colleges and universities change, we’re often surprised that financial systems and incentives are not always considered as organizational change tools. Whether you’re considering grants, awards, or even new budgeting processes and policies, these tools can be quite effective at sparking change.

Why use funding models to drive change?
How you fund and incent change can have real benefits. It makes your priorities clear; what you choose to fund in a grant or awards program communicates what you value in a way that no speech or memo can. Funding mechanisms can also establish an ongoing relationship or feedback loop because you can require things like information sharing or assessment in exchange for funding. You can also use even small amounts of funding to enable pilots or other experimental initiatives that help to try things out, build momentum, or convince skeptics with measurable results. Of course, there are also potential downsides to be mindful of; for instance, an unintended consequence of a competitive grant process could be to discourage cooperation and so be careful about the program design, communication, and monitoring.

What are the types of funding strategies out there?
Examples of financial tools to foster change tend to fall into three categories: changing the overall budgeting structure and process to better align with intended outcomes, creating grant programs that incentivize specific behaviors or activities, or convening competitions with rewards. Let’s review some examples of each way of funding change.

Strategy 1: Changing the overall budgeting structure and process to better align with intended outcomes
Sometimes the best way to effect change holistically is to change the system as a whole, rather than as a grass roots effort. Of course, this takes longer to build consensus in and implement, but can produce larger-scale results. Changing the overall budgeting process at a university can take years to roll-out – and can have unintended consequences such as creating internal competition where you didn’t want it – but can certainly align the process with your principles and priorities.

President’s Office Programming on “Inside Dartmouth’s Budget” (Source)

Restructuring budgets to delegate control: Many institutions are moving to “Responsibility Center Management” (RCM) in which each unit/department/school/college/etc. is responsible for its own costs and revenues and therefore builds in a sense of ownership and accountability while encouraging more efficient and effective allocation of resources. Hanover research provides a good overview of different models and Drexel University provides a good explanation of why they made this change.

Encouraging Innovation and Efficiency at Dartmouth College: Dartmouth College instituted a budgeting process designed to simultaneously encourage innovation and efficiency. The process reduced the budgets of all units by 1.5% and then created a pool from those funds that each unit can then apply for and/or reallocate in order to fund new and innovative ideas. The result has been to prompt units to think more strategically about how they allocate resources.


Strategy 2: Creating grant programs that incentivize specific behaviors or activities
Instead of a top-down change to the whole system, sometimes grass roots efforts work best. These are often programs that require small investments that encourage – and then shine a spotlight on – the kinds of behaviors, initiatives, and programs that advance larger institutional priorities. For instance, grant programs around community engagement or diversity and inclusion. These programs also have the benefit of quickly creating success stories institutions can use to build momentum and make a broader case for change.

Barger Institute Small Grant Program: Our Global Africa (Source)

Sparking Change at the University of Michigan: The Barger Institute’s Small Grants Program found that if they made the submission and approval process easier, they could get small amounts of funding into students hands rapidly and effect change more quickly. So after completing a one-page application that is reviewed on a rolling basis, a student might get funding for a volunteer project over spring break with the condition he or she gives a presentation on the experience afterward to then inspire others.

Rewarding Collaboration at the University of Miami: In order to encourage collaboration across disciplines that solve problems that matter to society, University of Miami created the ULINK program – the University Laboratory for Integrative Knowledge. Teams must demonstrate an interdisciplinary approach and can apply for early developmental grants and later stage implementation grants. Awardees are now tackling pressing problems in public health, climate change, and social justice.

Enabling Human-Centered Design at UC San Diego: The Norman Design Fund supports undergrad design students and graduate students tackling design projects that use observational studies and prototyping through small grants that are simple to apply for. Funds can be used for travel, conference registration fees, and other project costs. Notably, recipients must report on their lessons learned in order to receive reimbursements.

Promoting Diversity and Inclusion at CalPoly: The university’s career services diversity funding committee provides support to groups hosting events that foster understanding of diversity and inclusion on campus. Recent events have addressed topics such as health disparities, leadership skill development, social justice, and multicultural businesses.

Fostering Community Partnership at the University of San Francisco: The Community Partnership Innovation Fund provides grants up to $5,000 for projects that couple USF’s students, faculty, and staff with a community partner in the surrounding area to take on a project that meets a well-defined community need. The program, run by the Leo T. McCarthy Center for Public Service and the Common Good, has included projects in publishing, community gardens, literacy, and the arts.


Strategy 3: Convening competitions with rewards
Sometimes grants aren’t the best way to motivate people, but other forms of competition are. Competitions, hack-a-thons, and other award programs are a great way to recognize and support innovators. Often a big picture goal like “innovation and entrepreneurship” will be a goal in a strategic plan, but students, faculty, staff, alumni, and community may not see how they can contribute or what success looks like. So, these activities are also a great way to make your priorities and principles more concrete and clear.

Rice University Business Plan Competition Winners (Source)

Business Plan Competition at Rice University: Rice University hosts the “World’s Richest and Largest Student Startup Competition” jointly run by its Jesse H. Jones Graduate School of Business and the Rice Alliance for Technology and Entrepreneurship. Last year, more than 400 applications were submitted and about 40 teams competed for more than $1.5 million in cash and prize, with the support of 180 sponsors and 275+ judges. The program encourages experiential learning that moves student ventures forward – with participating companies having raised $3.3 billion in funding since 2000.

Hackathons at the University of Michigan and Princeton: Hackathons are typically run by volunteer student groups such as an entrepreneurship club in order to bring teams together to create something to solve a problem in short period of time – often a weekend – generally with prizes that could range from cash to gear to internships or job placements. Some of the most notable include HackPrinceton at well, you know, and MHacks at the University of Michigan.


So, as you think about how to effect change in your organization, in addition to strategies like using a participatory process and using pilots to make the case, think about how you’re using financial tools as well. These can be large scale, structural changes to budgeting policy and processes, they can be small grant programs that promote your values and ladder up to your goals, or they could be competitions whose rewards drive the kind of change you’re looking for. Good luck as you move ahead and if you know of other great examples like those above or you employ one of the strategies, please let us know!

Acknowledgments: Thank you to all who contributed ideas and examples to this post, including brightspotter Kelly Sanford as well as Shawn P. Calhoun, Raymond Pun, Paul Stoller, and Scott Witthoft.

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