By Richard Vedder
Colleges can obtain money to meet new needs in two ways. First, they can go out and raise new funds. Second, they can reallocate existing funds --reduce funding for some activities to expand or initiate programs.
College presidents enjoy (or at least accept) raising new money. They have become good at begging legislatures, private donors and others for funds. Moreover, if that does not do the job (as is usually the case), it is relatively easy to pass the buck (or actually take the buck) from students in the form of tuition hikes. It is this approach that has brought about higher education cost escalation.
College presidents dislike having to reallocate funds, because that makes people on campus mad --really mad. Tenured faculty are kept happy by giving them $$ for new programs, lighter teaching loads, higher salaries, etc., but they are ready to go to war if their programs are reduced. The same is true, perhaps to a lesser degree, with other members of the campus community --alums, administrators, even students. As Howard Bowen said a few decades ago, colleges will spend whatever that have --the marginal propensity to consume out of income always is roughly one (to use old Keynesian lingo).
Along comes Bob Dickeson. Bob is one of my favorites. He has done it all --at a young age, he was a high level university administrator, including serving as President of the University of Northern Colorado for a decade. He was CEO of a major company supplying higher education services --Noel-Levitz. He worked closely with a couple of governors on their staffs. He helped start the Lumina Foundation where he worked as a senior executive for many years. He did some great, straight talking studies for the Spellings Commission, ones that angered the Establishment, which meant they were excellent. His study on accreditation nearly caused a few heart attacks, but was right on the money in terms of identifying a real problem.
Getting to know Bob while on that Commission was a real treat.
Bob has revised his book with the boring title of Prioritizing Academic Programs and Services, first written a decade ago. It is must
reading for all who have the ability to change universities, and especially university presidents, provosts, and trustees. Bob sent me a copy, and I have devoured it. He gets into the nitty-gritty of how reallocating resources should be done at universities, starting with identifying institutional missions (usually done excesssively vaguely and in a manner that gives little clue as to the institution's true direction), the key players in making change happen, the questions that need to be asked and answered in reallocation, etc., etc.
Bob's book is a little wonkish, a little narrow in its scope, but that is what makes it both good and relevant. Today, colleges are being forced into reallocation mode, and cross the board budget cuts are sometimes politically the least unpopular but always the least desirable way to proceed. Should we reduce the sociology department by eliminating its moribund master's program in order to increase research efforts in nano science? Should we out source more activities? Bob gives guidance how to proceed in answering questions like these. More people should read Bob Dickeson, and then call him in Estes Park, Colorado (his home) if more guidance is needed.