Funding
of Schools of Nursing
T
HE NATIONAL RECESSION has spared few schools o f nursing from budget cuts. Financial crises are informative about the ways we conduct our business in public and private sectors and the need for diversification in our approaches. A common assumption is that funding is entirely different for public and private institutions. A frustrated colleague recently said “Why do you think I’m a dean in a state university--I hate fund-raising!” Both she and others present realized that times have changed. Public and private institutions differ in several ways, but the differences between them are diminishing. It is not uncommon that less than half the budget of a state school of nursing is supplied by the state. These stateassisted schools must perform more like private schools to continue and expand programs. At the same time, private schools compete for tax-based support through federal funding and student assistance programs. All schools must manage access to four general sources of support to assure the flexibility to survive budgetary crises. The fiscal foundation of every school is some type of base funding for instructionalprograms. Public schools receive local tax dollars; private schools have base funding from endowments and ongoing revenues from programs. Both types of funding are on shaky ground when hard times hit. Base funding is provided to meet the basic expectations, usually defined as teaching designated numbers of students and perhaps minimal support for scholarly pursuits. Formula-driven base support is particularly difficult to manage. While many schools do not apply a rigid formula, both public and private schools of nursing ride the roller coaster of balancing base revenues and enrollments. A second type of revenue is external grants and contracts. Some types of grants and contracts, such as federal traineeships, provide support for students. External funding is especially important for conduct of special projects, particularly research and scholarshipa mark of achievement for both the individual and the school. Funded grants and contracts are essential for scholarly pursuits that few schools can support with base funding. Especially in times of greater constraints in base funding, however, another option tempts us: Seek more external grants and contracts to support the basic programs being
I
SUE T. HEGYVARY, PHD, FAAN Dean and Professor School of Nursing University of Washington T-3 18 Health Sciences Center. SC- 72 Seattle, WA 98195
Copyright 0 1992 by W.B. Saunders Company 8755-7223/92/0803-0004.$03.00/O
142
threatened by loss of base funding. A common approach is to seek external funding for new initiatives that stand a greater chance of inclusion in the base budget, once they are reasonably established. The risk is obvious: The presence of external funding makes it difficult to convert later to “hard money” support. The result could be loss of a program when external funding no longer is available. Many schools have discovered a third type of revenue: self-sustainingprograms or business activities. Examples include continuing education, faculty practice, and a variety of products and services that relate to education, research, or practice. Generating revenues depends on the ability of the school to sell products and services. The language of business is foreign to hard-core academics. Yet the reality is that these activities not only support and augment the school’s mission, but they also can generate income for faculty and programs. Self-sustaining programs are not without risk. Many schools have phased out their continuing education programs because they were not financially viable, particularly in areas with competing programs. Goods and services related to practice and consultation must be marketed, with a sharp eye on investment and return, lest these activities drain resources from base program support. In general, business activities in schools of nursing tend to rise and fall with the broader economy. In a recession, for example, continuing education programs likely will have lower attendance and may not break even. Thus, it may be unwise to begin or expand self-sustaining programs during a recession, unless the market clearly is ready and well targeted. Such activities are a long-term investment that usually require time to establish a solid reputation and prove their worth. The fourth source of income is pnvate gifts. A few schools of nursing, most private, but some public, have learned the art of cultivating the school’s garden of friends. Gifts from individuals, corporations, and foundations are increasingly essential for special initiatives, such as financial aid for students, seed money for research, endowed chairs and professorships, and outreach programs. Few schools of nursing have the machinery in place for significant fund raising. Attitudes also stand in the way, particularly discomfort in asking individuals for money. Yet schools of nursing have marvelous stories to tell. Matching those messages with targeted development of programs is a long-range investment. This summary of sources of funding has an explicit message: Diversify the school’s funding to survive economic slumps. Even in public institutions, hard money turns soft when the chips are down. Decreasing the dependency of schools of nursing on limited sources of revenue will give us the edge to thrive in good times and to survive the hard times yet to come.
Journal of Professional Nursing,
Vol 8, No
3 (May-June),
1992:
p 142
of Schools of Nursing
T
HE NATIONAL RECESSION has spared few schools o f nursing from budget cuts. Financial crises are informative about the ways we conduct our business in public and private sectors and the need for diversification in our approaches. A common assumption is that funding is entirely different for public and private institutions. A frustrated colleague recently said “Why do you think I’m a dean in a state university--I hate fund-raising!” Both she and others present realized that times have changed. Public and private institutions differ in several ways, but the differences between them are diminishing. It is not uncommon that less than half the budget of a state school of nursing is supplied by the state. These stateassisted schools must perform more like private schools to continue and expand programs. At the same time, private schools compete for tax-based support through federal funding and student assistance programs. All schools must manage access to four general sources of support to assure the flexibility to survive budgetary crises. The fiscal foundation of every school is some type of base funding for instructionalprograms. Public schools receive local tax dollars; private schools have base funding from endowments and ongoing revenues from programs. Both types of funding are on shaky ground when hard times hit. Base funding is provided to meet the basic expectations, usually defined as teaching designated numbers of students and perhaps minimal support for scholarly pursuits. Formula-driven base support is particularly difficult to manage. While many schools do not apply a rigid formula, both public and private schools of nursing ride the roller coaster of balancing base revenues and enrollments. A second type of revenue is external grants and contracts. Some types of grants and contracts, such as federal traineeships, provide support for students. External funding is especially important for conduct of special projects, particularly research and scholarshipa mark of achievement for both the individual and the school. Funded grants and contracts are essential for scholarly pursuits that few schools can support with base funding. Especially in times of greater constraints in base funding, however, another option tempts us: Seek more external grants and contracts to support the basic programs being
I
SUE T. HEGYVARY, PHD, FAAN Dean and Professor School of Nursing University of Washington T-3 18 Health Sciences Center. SC- 72 Seattle, WA 98195
Copyright 0 1992 by W.B. Saunders Company 8755-7223/92/0803-0004.$03.00/O
142
threatened by loss of base funding. A common approach is to seek external funding for new initiatives that stand a greater chance of inclusion in the base budget, once they are reasonably established. The risk is obvious: The presence of external funding makes it difficult to convert later to “hard money” support. The result could be loss of a program when external funding no longer is available. Many schools have discovered a third type of revenue: self-sustainingprograms or business activities. Examples include continuing education, faculty practice, and a variety of products and services that relate to education, research, or practice. Generating revenues depends on the ability of the school to sell products and services. The language of business is foreign to hard-core academics. Yet the reality is that these activities not only support and augment the school’s mission, but they also can generate income for faculty and programs. Self-sustaining programs are not without risk. Many schools have phased out their continuing education programs because they were not financially viable, particularly in areas with competing programs. Goods and services related to practice and consultation must be marketed, with a sharp eye on investment and return, lest these activities drain resources from base program support. In general, business activities in schools of nursing tend to rise and fall with the broader economy. In a recession, for example, continuing education programs likely will have lower attendance and may not break even. Thus, it may be unwise to begin or expand self-sustaining programs during a recession, unless the market clearly is ready and well targeted. Such activities are a long-term investment that usually require time to establish a solid reputation and prove their worth. The fourth source of income is pnvate gifts. A few schools of nursing, most private, but some public, have learned the art of cultivating the school’s garden of friends. Gifts from individuals, corporations, and foundations are increasingly essential for special initiatives, such as financial aid for students, seed money for research, endowed chairs and professorships, and outreach programs. Few schools of nursing have the machinery in place for significant fund raising. Attitudes also stand in the way, particularly discomfort in asking individuals for money. Yet schools of nursing have marvelous stories to tell. Matching those messages with targeted development of programs is a long-range investment. This summary of sources of funding has an explicit message: Diversify the school’s funding to survive economic slumps. Even in public institutions, hard money turns soft when the chips are down. Decreasing the dependency of schools of nursing on limited sources of revenue will give us the edge to thrive in good times and to survive the hard times yet to come.
Journal of Professional Nursing,
Vol 8, No
3 (May-June),
1992:
p 142
