Tracking revenue streams of higher education

Post-pandemic, the economics of universities are fractured and reinventing the same is in process these days. It is pertinent today that the universities should go beyond admission revenue and cultivate a plethora of revenue earning strategies to ensure a more sustainable business model for themselves.

Regular admissions of learners:

It is the predominant source of revenue, and in many cases, the only source of revenue, income earned through the regular full-time programs admissions. There must be research on schools and cities that have contributed maximum admissions in the last two years, and have the first focus there for city-specific outreach initiatives and school specific knowledge initiatives.

There must also be story-telling of each department of the university, then each program offered, and of some outstanding alumni through testimonials, short film, pictorial story and youth forum. Every season, initiative, festival, program on campus should be presented online as a story from the learners’ perspective with them dominating all imagery.

This must be brought below 30% of the gross income for a good university which ensures its long-term sustainability.

Grants, Surveys, Market Research, Sponsored Research and Consultancy

Department of Science and Technology of the government, Chambers of Commerce and Industries, business associations and large voluntary sector organizations often commission specific focused research work to the universities. These can be about developing a new product or service type, or get scientific analysis of a phenomenon, or about conducting a market research to get an insight into a consumer behavior or an emerging trend, etc. And all of these at a cost or with a grant-in-aid.  There are also sponsored projects supported by European Union, UN bodies and other international organizations. There are also consultancy projects given by government bodies, UN bodies, corporate houses or voluntary sector.

The anti-COVID vaccines have mostly been developed in university campuses in various nations, with corporate and government support and investments pouring into these researches. The Innovation Super-clusters in Canada or Norway, USA or Israel, all have one or more universities associated with each such cluster, doing research, creating applied knowledge, developing new product-line, and earning considerable moolah in the process.

This entire gamut together must ensure 15 per cent of the gross revenue.

Scholarships

Scholarships are often considered to be an expense account for the university, which these need not be. Some fee waivers, financial support on merit cum means basis by the university is the usual norm. But there is a horde of scholarships from myriad external sources which need to be tapped through a concerted effort of a dedicated office. There are scholarships from Chambers, voluntary organizations, corporate houses through CSR, foundations, EU scholarships or Erasmus Mundus, state and national governments, international bodies, etc. Tata Trust in India is a regular source of scholarships for learners with certain backgrounds and achievements. The nations like Bhutan, or the provinces in India as those in the northeast, usually sponsor their meritorious youth to study in reputed universities.

Scholarships must support at least one-third of all learners in varying proportions, and contribute at least 5% of the gross revenue of the university.

Focused Centres in the University

Various centers are created in a university by a senior professor, with support from juniors and learners, to focus on specific areas or research, writing, conferencing etc, with external funding from within and beyond the borders of the country. For example, centers focused on regional security, innovation, incubation, gender studies, developmental issues, retail branding, sustainable development and the like have access to funded projects with outcomes and deliverables noted. Many times such centers are established with a large project in hand already.

The thumb rule is to have a Center earn four times of its direct expenses, thereby contributing to a minimum 5% of the total revenue of the university.

Products, Books and Services

Many universities produce their chain of products and services, from pharmaceuticals to drinking water, from sweat shirts to memorabilia, from running canteens to high-end cafeteria, from publishing books to printing notebooks or producing several other stationery items. They run shops of their own or outside products and services, including sportswear etc. Many large picturesque campuses, allow sports tournaments and film shooting on campus for a cost, subject to certain conditions of security, protection and participation of their own learners in these. Daffodil International University produces the entire drinking water it consumes on campus. ICFAI has a powerful book publishing wing, so does Oxford have bookshops globally. All revenues through this area must cross 5% of the gross revenue of the university.

Sponsored Flagship Events

Each reputed university creates their own flagship events focusing on each major function or focus area of academics of the campus. For example, organizing inter-university or inter-college events, focused conferences on an academic field like biotechnology with corporate partners, a festival of jobs with a major human resources or developmental organization, entrepreneurship summits with a bank or a government department or a startup body. Usually such paid or sponsored events are jointly curated in partnership with a government or UN body, an international organization or a business association, or a corporate house that stands to gain in some way from the initiative.

Another 5% of the gross revenue of the university can come through such sponsored mega events of various functional and academic areas of the university. 

Value-added/ Add-on Courses

Often, a university, sensing additional market for short-term courses in its vicinity, comes out with management development programs, short-term up-skilling training, weekend post graduate diplomas, summer and winter courses on campus, lifelong learning focused short courses, et al, and these bring in a strong revenue stream alongside.

For example, a university in India has started a series of software based design courses with Adobe which has put up Adobe Centre for Creative Excellence on the campus of the university. These courses are at half cost for the university’s current students, one fourth concession for the alumni, and at full cost for the outsiders, and training is run by experts from the industry.

Many universities are organizing weekend focused courses on management areas like retain sales and marketing, law sector like cyber law, creative areas like advanced photography, etc.

Surely this entire domain can earn a minimum of 10% of the total revenue.

Online Learning

Today the higher education regulators are liberally allowing online learning, from certification to diploma to even degrees to an extent, with conditions. A university can even develop an application based online learning platform and business, almost functioning like an OTT. Adding a dash of occasional in-person sessions and workshops shall make this online learning initiative even more attractive. Oxford or Harvard Online is an important division and income-earning initiatives of those universities. This revenue stream can easily add up to 10 per cent of the revenue.

Social Media, YouTube Channel, Films & Music

Universities are finding ways and means of monetizing their social media and not just using them as a tool of publicity or reputation building. Managing a revenue earning productive and educative YouTube channel is a feather on the cap of a university and its outreach initiatives. Many universities produce films and music with a market or sponsored films for clients with learners participating along with professional content producers. This entire area may aim for a minimum of 5 per cent of the revenue.

Alumni Contributions & Corpus Grants:

Every major university in the world today has cultivated its Alumni very effectively for financial support, and also raised donations and grants from corporate entities to high networth individuals (HNIs) to raise developmental funds (at times giving naming rights or credits in the new infrastructure built with their support). This is considered normal and a major source of income in the Western societies. A Harvard or Carnegie Mellon or Cambridge, etc, have a major contribution of this source of revenue in their journey. Even in a South Asian university, this must gradually add up to a minimum of 10 per cent of the revenue.

The writer is the Executive Director of International Online University (operating from Dubai), and a strategic adviser to a Dhaka based private university. He can be contacted at [email protected]