“This Needs To Be Run More Like A Business!”

Recently, I facilitated a focus group populated with private higher education governing board members.  One slice of the discussion included a board member lamenting, “Our business model in higher education is broken.  I simply do not understand why our tuition and fees are not sufficient to cover our costs.  We need to be run more like a business!”

Statements like this are not new, of course.  But, as a consultant, I will say that I am hearing this sentiment more and more.  And from people who should know better.

On its face, this concern sounds like it makes good, common sense.  “Be more efficient.  Keep costs down.  Run the institution more like a business.”   But, when you chase that “run it like a business” line of thinking just a bit, you realize it comes with some very deep problems.  Problems, that, at their core, are prompted because non-profit higher education is not simply a business and treating it as such is wrong-headed and causes more issues than it fixes.  Here are two troubling developments that are occurring in non-profit higher education, in part, because more and more institutions are attempting to be “run like businesses.”

First, the business model approach to higher education is helping to discourage giving.  The connection between the business model thinking being advocated and the motivations for charitable giving is rarely, if ever made.  But, the very move to a more business-like, transactional, customer-oriented approach discourages giving.  And the more our higher educations are “run like businesses,” the more giving will be reduced.  If we aim to treat public and private non-profit higher education like any other business in which students are viewed as customers and the activity of keeping costs low and prices higher is the first priority, then our students and alumni will view us like Walmart, not like their “alma mater.” And giving, especially from the masses of alumni will continue to decline.

Want proof?  Alumni giving participation, which the Council for Aid to Education’s Voluntary Support of Education report tells us has decreased year-over-year for 16 years now, will continue to decrease as board members and others misguidedly encourage institutions to view students as customers.  As those students graduate and become alumni, why should they not view their alma maters as “educational Walmarts” from which they purchased their degrees?  A transactional business model undermines the whole process of giving because it reduces a life-changing experience to a pay-for-services transaction.  There is a reason no one makes charitable gifts to Walmart, Target, or the local supermarket after going through the check-out lane.  There is a reason no one even thinks to make a charitable gift to their internet provider after paying their monthly bill.  We purchase goods and services from businesses.  We don’t give to them.

Charitable giving participation increases when alumni view their institutions emotionally – as alma mater – the place filled with people who cared enough and gave enough to help them successfully transition from childhood to a richly-lived adult life.

Second, and underlying the fact that a business model approach applied to higher education will kill giving, is the fact that giving makes us better as individuals and our communities stronger.  I have noticed that some of the most vocal proponents for higher education adopting a more the business-like, transactional approach are also the same people who struggle with their own giving.  They either give infrequently or give much less than they could.  But here is what research tells us:  Helping others – financially or in any other way – is good.  It’s good to receive the help when it is needed.  And it’s even better to be the helper.  We know that research has clearly made the connection between emotional health, physical health, happiness, longevity, etc. and regular giving.  We know that developing a giving spirit is one of the healthiest habits we can adopt as adults.  It makes us better individually and it makes our communities stronger and more meaningful for us.

And yet, when people talk about changing the business model so that tuition and fees cover the full cost of education, they ultimately are advocating for a culture that values giving less.  When we give less we become more disconnected from each other and we find less meaning in our human interactions.  Simply put, a community that gives less is not as healthy as a community that gives more.   Giving in higher education should be valued, protected, and encouraged at every turn, not viewed with antipathy.  We when give, we aren’t losing something of value, we are gaining something that truly is priceless.

No, we don’t need to change higher education to become “more like a business.”  We need board members and other leaders who understand that higher education is a community of care that is much “more than a business.”  And we need to do a much better job of educating people on why generous giving should continue to be a hallmark of that community.

2 Comments

2 Comments

  1. Jason, As someone who has spent a lifetime in higher education, I have a somewhat different take on this subject than you do. I agree with many of your premises. However, at ground zero, I believe that the business model of all of higher education is broken. Feeling the challenge of better educating more people in the problems and solutions in higher educationI have started a serious of posts on this subject at my blog By’s Musings at http://higheredbybaylis.net/wp/bysmusings/. Thank you and in the spirit of cooperation, I hope we can continue this conversation.

    • Thank you for your message. I’m not certain my post communicated my concern appropriately. Let me put it more simply: As private, higher education institutions (especially ones based on the Christian faith tradition), we should be lifting up the spiritual goodness of giving. Giving is good. And in our approaches, our policies, and our procedures for running the business of private higher education, we should encourage more generosity from everyone, including ourselves. We should, therefore, be careful to address legitimate concerns about funding by “making education more like a business.” Because, businesses operate, principally, on short-term results and transactions – not on generosity.

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