Poor department, rich department

All public universities have some sort of a quasi-commercial continuing or extended education shops. All struggle to figure out the right kind of incentive for faculty to engage into putting together more of such programs. State funding is never enough, and there is only a limited set of options to diversify revenues. Basically, only three exists: fundraising, grants/contracts, and continuing education programming. The latter is by far the most significant.

Those campuses more influenced by the neoliberal management theories send some of the profits back to those who create and teach CE programs. The logic is simple: create reach and poor, the poor will see how well the rich have it and will try to do the same thus increasing the overall wealth created. In practice, such an approach does not work, and sometimes has tremendous negative externalities.

First, not all departments and not all colleges are in a position to put together a CE program or any other revenue-generating gig. If you a chemistry department, you may occasionally land a commercial contract. If you are in astronomy, it is much less likely. Colleges of business can generate hundreds of thousands of dollars annually by putting together an Executive MBA. Departments like English and Math that work hard at putting all students through gened courses, can rarely offer something to the market. It is not because of lack of effort or creativity. Academic disciplines have very different relations with external markets; they serve vastly different external populations. One should not incentivize luck.

Other issues with fairness arise. For example, who do you share the income with? Is it the individual, the department, the college or the division? If it is a department, most of it may have nothing to do with the CE program that generates revenues. How is getting extra resources fair, if all you did was to be lucky to work with someone who had an idea and has the persistence to implement it? If it is the college, the same problem of rich and poor colleges produces a very inequitable outcome. I have seen more than one group ruined under the pressure of the irrational inequality. A lot of money not only create fertile sole for nepotism, but what is even more important, they create an inevitable mistrust. Dividing a lot of money that results in extreme inequality is a relational bomb. Seeing a very rich neighbor does not motivate the poor department to act (especially if they cannot do much); but it generates resentment.

But also consider other, less obvious side-effects. For strategic re-investment of CE revenues, you need a relative concentration of the funds. You can build meaningful programs with significant resources. When a small department gets their 5 K a year of play money, they will buy a coffeemaker, and a new furniture. I remember in one of my old places we repainted the main office. It was beautiful, but was it consequential? OK, the rich department faculty will go to a few more conferences, including that questionable one in Hawaii in January, organized by who-knows-whom. All of this is nice, but it is not strategy. I former dean-colleague I admire saved money for something like 8 years and built a whole brand-new facility for one of the programs. Yes, his departments got by without a leather chair, but it was a strategic investment that benefited everyone. And unlike another college, it did not self-destruct in acrimony.

Every CE program lets its authors and participants make extra income. No one does this work for free. If this direct compensation is fair, it is already a strong incentive to keep going, and invent new programs. The excess revenue sharing is a more complicated thing, because this money cannot be individual income. It can only come as some sort of PD funds, with a bunch of strings attached. Or it can be spent on buying stuff. As I mentioned, the more concentrated are those funds, the more strategic is its use. For the revenue, solidarity works better than competition. Deans and provosts cannot “keep” the money; they must invest it in something that supports the mission and benefits as many people as possible. Spending money in academia is not easy; it must come with a plan, and it must do no harm.