During the 2013 fiscal year, Drexel recorded its strongest financial performance ever. So why, then, did President John Fry ask faculty and professional staff less than a year later for suggested ways to reduce expenses and increase revenue?
The answer is that Fry’s request has little to do with the state of Drexel’s finances. Instead, it is about making sure that the University improves its competitive position in a changing higher-education landscape.
The University could maintain its status quo, and the finances would look fine. But that would mean continuing to increase tuition at a rate outpacing Drexel’s institutional peers. That’s at odds with the University’s strategic goals.
In fact, in March, Drexel’s Board of Trustees approved an increase of tuition, fees, room and board of 2.94 percent for the coming 2015 fiscal year. That’s a step down from recent years, including the 3.94 percent increase for the current year, and it’s below the roughly 3.5 percent average among peer institutions in recent years.
“Our mission of access and affordability goes back to A.J. Drexel,” said Helen Bowman, Drexel’s senior vice president for finance, treasurer and CFO. “We think our strategy of lower tuition and fees increases and an increased commitment to need-based financial aid will more appropriately fulfill that mission.”
Drexel is also keeping the size of its incoming freshman class steady at 3,100 and increasing financial aid, as the Student Lifecycle Management initiative aims to bring in classes more likely to succeed and retain through graduation. The University also plans to continue to invest in the things that are central to its mission: education, research and student services. That means Drexel needs to reduce expenses that don’t directly relate to the mission and strategic plan, as well as come up with ways to bolster revenues.
“If we handle these constraints correctly, they can actually result in a better university,” said Provost Mark Greenberg. “And that’s because we are committed to not reducing academic quality, academic programs or our research agenda. In fact, we’re committed to improving and enhancing all of that.”
Fry’s message to faculty and professional staff in February yielded hundreds of suggestions for becoming more efficient, Bowman said. The administration took care to include the entire Drexel community in the process, she said, and many respondents expressed appreciation for that.
“The feedback from the community has been encouraging,” Bowman said. “Many people thanked us for the opportunity to be a part of it. Very good ideas came out of that, and I’m in the process of assessing those.”
The types of reductions being considered, she said, have to do with expenses that just aren’t necessary for a university to operate effectively. For example, spending on food for lunchtime meetings could be reduced. Travel and entertainment expenses deserve a close look, too. The University currently pays for cellphone and internet service for employees who are not required to be available outside of work, Bowman said, and those expenses will be reviewed to determine which are absolutely essential.
A new e-procurement system will help the University save significant funding on products and services. The University will review the compensation structure for senior administration. Vacant positions may go unfilled for a bit longer, and they’ll be examined to determine business need.
“We want to be better stewards of our tuition and donor dollars,” Bowman said. “That’s how Drexel is going to operate moving forward, not just this year.”
After all, Greenberg noted, Drexel funds come from students, donors, taxpayer-funded agencies, nonprofits and other groups who expect that money to be put to good use. The University owes them its due diligence in getting the most out of that funding.
“Regardless of the source, our funding is precious,” Greenberg said, “and if we don’t use it for the purpose intended, then we are squandering opportunities and probably not performing as well as we could as an organization.”
The suggestions submitted by faculty and professional staff should help Drexel’s budget immediately. Other initiatives will help Drexel grow even more efficient and strong in the coming years: Student Lifecycle Management, which aims to increase student retention; a Responsibility-Centered Management approach, which will provide incentives for University units to operate efficiently; and a new fundraising focus on endowed funds for scholarships and professorships.
No crisis confronts Drexel now, and neither will it in the future if the University sets itself on a successful trajectory, leaders say.
“We can impose discipline on ourselves,” said Greenberg. “We can pull out things that are not essential to carrying out our responsibilities as educators, as researchers and as administrators before someone tells us that we have to.”