The Five Dumb(est) Ways that Universities Spend Money

I know a young woman who attends a very pricey public university that has plans to raise her tuition by another 25% next year.  It’s in one of those western states where the number of applicants far exceeds the number of available freshman openings.  You have to wonder what was going on in the alumni office when they were putting their quarterly newsletter together. It  proudly announced the latest institutional initiative, a million dollar branding campaign.

It would be one thing if it were a campaign to spread awareness of the university’s many great programs among prospective students.  It would even be all right to mount a a campaign to position the university as a driver of economic growth and social well-being for a balky state legislature.  But no, this was a branding campaign along the lines of  management book/landfill fodder classics like Why Johnny can’t Brand.  “It’s even worse,” said the father of the soon-to-be gold-plated sophomore.  His face was red and his hands were shaking as he shoved the alumni newsletter under my nose.

“They are going to spend a million dollars — my dollars — on standard logos and common fonts.” No more nightmarish inconsistencies between physics and modern languages when it comes to business cards and PowerPoint presentations. And those press releases from the Athletic Director will now just have to rise or fall on their own merits. They won’t have serifs to hang onto.  Prospective employers will heave a sigh of relief knowing there has been no graphical hanky-panky in the registrar’s office when it comes to the forms on which student transcripts are printed.  Teams of litigators will have new weapons at their disposal as they fan out across the world to chase down the diploma mills that churn out thousands of knock-off degrees. As they cross the commencement stage, new graduates and their parents will be greatly comforted to know that every time their daughter is introduced from that day forward, the university’s branded,  descriptive tag line will have to be tacked onto the end, as in, “Meet Sally Smith who recently graduated from Western State University, the Mighty Blue Raiders, leading the force of change and innovation for the Rocky Mountains and beyond.”

OK, sorry.  I got caught up in the moment, but it struck me that a million dollar project to apply consumer product marketing tools  to a university that is raising tuition by 25%, closing academic departments, shutting down programs, and firing scores of staff was probably going to have some unintended repercussions. Marketing professionals would say it was not the best choice optics-wise. I remember thinking to myself: “This is maybe the dumbest use of university funds that I have ever seen.”

If you’ve seen my other posts (here and here for example) about college costs, you know that, optics-wise,  I am suspicious of any expenditure that does not add value to students. So I started to wonder about other really dumb ways that universities spend money.  I have a top five list.

• An expensive “branding” campaign to standardize logos is at the top of the list.

• Letting service units do research: Dormitories, IT facilities, bookstores, technology licensing, and public relations offices, are all service units. The problem is that mission creep results in an ever-expanding number of ever-expanding service units. No doubt inspired by institutional aspirations, they try to hire the best people.  Some of them have PhDs and academic career goals of their own, so they push very hard for a piece of the campus research pie. But, as we all know, university research seldom pays for itself. It is mission creep upon mission creep as service units with no academic mission whatsoever funnel resources into research programs.
• Overhead forgiveness: Faculty members and research sponsors are equally suspicious of indirect costs on research contracts.  Professors see it as an unnecessary tax on their salaries, and sponsors confuse it with profit.  Both sides push to have it reduced or eliminated.  There are even federal agencies that make it a point to try to have it forgiven as they strong arm investigators into promising more and more for less and less.  Even full cost recovery does not pay the actual cost of research. Reducing or eliminating research overhead is an expense that robs the rest of the university, and is not a smart way to spend money.
• Centralization: I once had a colleague — a fellow general manager — who effectively blocked any attempt to increase the size of his staff with “Where the f— do you think we are, General Motors?” It translated better back when General Motors was ranked number one in the Fortune 500, but it is nevertheless a good message today that administrative bloat is a dumb way to spend money.  The Spring 2008 issue of the UCLA faculty newsletter shows how bad it has become:

Over the past decade, the numbers of Administrators in the UC almost doubled, while the number of faculty increased by 25%. The sharpest growth took place among Executives and Senior Managers: 114%. Because Administrators command high salaries and benefits, any increase in their number higher than the expected growth rate for the University results in high costs: rough estimates of the costs of carrying extra administrators at UC range around $800M.

• Entertain yourselves: We call it many things.  Networking. Teas. Receptions. Faculty meetings.  For most of the world, lunch means a five dollar sandwich from the cafeteria. At too many university gatherings, a catered buffet is the lure that induces professors to attend. Whatever we call it, the world sees it as a free lunch, and professors spend university funds to feed themselves at the drop of a hat. Long-time viewers of the NBC comedy series The Office know the drill.  If there’s a reason to entertain ourselves let’s do it:

Jan: You already had a party on May 5th for no reason.
Michael: No reason?! It was the 05 05 05 party…
Jan: And you had a luau….
Michael: …it happens once every billion years.
Jan: And a tsunami relief fundraiser which somehow lost a lot of money.
Michael: Okay, no, that was a FUN raiser. I think I made that very clear in the fliers, fun, F-U-N.
Jan: Okay, well, I don’t understand why anyone would have a tsunami FUN raiser, Michael. I mean, that doesn’t even make sense.

Paring the list down to five was not easy, and I am sure many of you have lists of your own.  What was number six? Well, Rutgers’ decision to pay Nicole “Snooki” Polizzi  (star of MTV reality show Jersey Shore), $10,000 more than the annual cost of attending the university was a real contender. It was $2,000 more than Nobel Prizewinning author Terri Morrison received.  It was a problem.  Optics-wise.