Margaret McKenna, president of Lesley University, passes the gavel to incoming CIC Board Chair Richard Detweiler, president of Hartwick College, during the Presidents Institute banquet. (Photo by Stan Lindsey)

Strategic budgeting and tuition discounting, the implications of September 11 for higher education, governance, market research, and successful planning were among the topics explored during the 2002 Presidents Institute, hosted by the Council of Independent Colleges on January 4-7 in Fort Myers, Florida.
    The theme of the meeting, "Framing Conversations for the Future," sought to cover many of the subjects that CIC member presidents identified as top priorities during the year-long strategic planning process CIC undertook in 2001 (see related story). The annual meeting attracted record-breaking attendance (287 presidents and 159 spouses) and the greatest amount ever in financial contributions from sponsors.
    One of the more highly praised sessions during the Institute examined "strategic budgeting"—how to link budgeting with planning, what new challenges have emerged since the last economic downturn, and how presidents and boards can manage their finances and data most effectively in turbulent times. Kent John Chabotar, vice president for finance and administration and treasurer of Bowdoin College (ME), explained that strategic budgeting:

• Is linked to mission and the strategic direction of the organization;
• Computes full costs for major goals and priorities;
• Requires a multi-year program in which the financial plan becomes a starting point for annual budgeting processes;
• Maintains flexibility by "what if" scenarios and contingencies;
• Promotes benchmarking and market comparisons;
• Rewards innovation;
• Integrates budget data into programmatic decision-making; and
• Relentlessly evaluates assumptions and outcomes.

    Chabotar enumerated new financial challenges and issues that higher education administrators face today, including the economic slowdown, student aid policies, information technology costs, teacher training and quality, standards and accountability, and supporting inter-collegiate athletics. Among his tips for dealing with finances in turbulent times, Chabotar stressed that college presidents should "return to your mission and long-range financial plan, confirm and announce your core priorities, stick to your strategic indicators, and consider administrative peer reviews." He urged presidents to analyze their financial infrastructure, asking questions such as: "Do we have the financial and other resources necessary for our mission? Are the sources and uses of funds matched? Is our college sustainable? And, are we practicing intergenerational equity?"
    Tuition discounting is another factor contributing to the financial challenges independent institutions face today. Lucie Lapovsky, president of Mercy College (NY), asserted during another concurrent session that many institutions give away more money in tuition discounting than is necessary. "The impact of lowering your price can lead to perceived lower quality—or it could lead to increased enrollment because it can be seen as helping students," she said. While Muskingum College’s reduction of tuition wasn’t an unhealthy move, Lapovsky said, another institution that reduced its fees by 25 percent in 1995-96 faced disaster. "The initiative led to reduced revenue and academic issues because financial aid did not decrease, so the school ended up attracting more students who needed aid and who were less prepared for college," she said.
    "Most colleges are spending their own money on discounts, but would be better off investing in other things," Lapovsky said. "Can we get off this merry-go-round?" She suggested that "making our institutions stronger and more attractive to students by investing in programs and plants…and marketing our value rather than discounting tuition" could help. "If we have a good product, we should look at how to market that successfully. Schools that are good at marketing are doing well," she said.

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Last updated: April 12, 2002
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