College boards turn to business-style approaches

“Universities are not corporations. Universities are nonprofit, public entities that have missions of teaching, research and public service,” said Matt Hedstrom, an assistant professor of religious studies and American studies at U.Va. who backed Sullivan. “Those are not the same mission as a corporation. They also don’t have the same cultures and governance. They’re much less hierarchical.”

Purdue University’s board last week named Indiana Gov. Mitch Daniels as its president, a choice that made faculty members apprehensive. Critics noted that Daniels had appointed seven members and reappointed three to the board that selected him president, calling it a conflict of interest.

As governor, he’s linked college funding to performance measurements such as degree attainment, and since 2009 ordered more than $150 million in cuts to public education — including $30 million to Purdue.

But many Indiana GOP legislators back Daniels, a former White House budget director and executive of pharmaceutical company Eli Lilly.

“I think in today’s world that the president of a university, No. 1, has to be a great fundraiser, and I think Mitch Daniels has proven he’s a good fundraiser,” Senate Education Committee chairman Dennis Kruse told Indiana Public Broadcasting.

In addition to improving fundraising, universities are increasingly looking for ways to use resources efficiently, cut costs and develop new revenue sources.

More than a third of universities were considering privatizing operations — such as bookstores or food service — for short-term revenue in 2011, and more than four in 10 were looking at privatization for long-term revenue, according an Association of Public and Land-Grant Universities survey of 81 research universities plus six university systems.

At the University of Texas, a committee of executives from Accenture, Dell, Boeing and several capital-management firms are developing strategies for efficient use of the school’s $2.3 billion operating budget. The group will develop performance measurements, interview university employees and measure efficiency.

Trustees at Ohio State University on Friday approved a proposal to lease school parking operations for $483 million to an Australian company over a 50-year contract. University officials say the deal will give the school more money for salaries, student aid and other improvements — a contention critics have questioned.

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