3.4 – Funding Models

How e-learning support is funded in the institution is as important, if not more, than how the support is organized. There are four basic funding models:

  1. Base funded
  2. Revenue generating
  3. Grant funded
  4. Combined funding

Base Funded

Base funding simply means that the e-learning support unit, whether centralized or decentralized, receives a budget allocation from the institution’s (or faculty’s, in the case of decentralized) core budget. The department must make a budget request every year like all other departments and justify its request. This normally results in relatively stable funding from year to year, assuming there are no financial crises or institution-wide budget cuts. (These days, perhaps this is no longer a reasonable assumption.) Certainly in good economic times a base-funded model is preferable as it eliminates the need to generate revenue and allows the department to focus on its core business of supporting faculty in their use of e-learning. It also helps establish the organizational status of the department. Revenue-generating units tend to be viewed as peripheral or marginal to the mandate of the institution.

Revenue-generating

A revenue-generating department will be basically self-supporting. It will generate its funding by selling its services either internally, externally or both. The key advantage of this model is that the department is somewhat insulated from the cyclical budget cutting that has been become commonplace in higher education. Since a revenue-generating department isn’t seeking any funding from the institutional budget, when it comes time to cut budgets, it is safe. However, the downside of his model is that the department must expend considerable effort finding sources of revenue. This can often mean diverting energy away from the core business of supporting faculty to providing services to fulfill external contracts. And when revenue-generating departments sell their services internally, this can act as a deterrent to faculty use of the services. I witnessed this at UBC between 1982 and 2005. The Distance Education & Technology department operated on a combined model of roughly 50% central support and 50% revenue generation. Faculties grew increasingly frustrated with having to pay for some services but not others and there was confusion about how the financial model worked. For example, all the tuition fees generated by distance education courses flowed back to the distance education department not to the faculties that developed the courses. This funding was used to support our student services function. But some Deans didn’t understand this and felt they should be getting the tuition revenues even though they weren’t providing the student support. The net result was a growing disenchantment with the model, a growth in faculty-based support units, and growing calls to completely decentralize the services. In fact, a plan was put in place to just this in 2005 but it was cancelled at the last minute when the Deans who were behind it actually added up the numbers and realized there would be no revenue windfall for them. Ironically, 10 years later UBC has an even larger central support unit (the Centre for Teaching, Learning & Technology) that was created by bringing together several formally separate departments.

Grant Funded

A grant-funded model is one in which the operations are supported from one-time or limited grant funds of various sorts. These could be external grants from donor agencies or governments or internal grant funds. At UBC, the faculty development department, Teaching and Academic Growth (TAG) which existed for many years until it was rolled into the new Centre for Teaching Learning and Technology, was funded on this basis. Each year it had to submit a proposal for funding from an internal university fund designed to support teaching innovation. This meant that from year to year it never knew if it would be able to continue its operations the next year. This created a great deal of uncertainly for anybody working there and meant that it was a difficult to launch multi-year projects. A similar approach was taken with the Office of Learning Technologies which also was subsequently folded into the Centre for Teacking Learning and Technology. Grant-funding may be a useful way to experiment with a new organizational approach but it is not appropriate as a funding model for something the institution deems to be part of its core operations.

Combined Funding

A combined funding model in many ways is the worst of both worlds. It exposes the department to the budget cycles and the dangers of budget cutting while also requiring the department to expend energy and resources seeking revenue from internal and external sources. It also can create conflict within the department (and institution) and difficulty in setting priorities. Who should get priority access to the departmental resources: external clients who are paying for them or faculty members who are not? Unless the revenue-generating and budget-funded operations of the department are distinct, there are bound to be conflicts about priorities.