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Monday, April 18, 2011

Chronicle: Pepperdine Chooses Growth by Cutting

Pepperdine University Logo Chronicle of Higher Education, Pepperdine U. Chooses Growth by Cutting; The University Reallocates 10% of its Budget to New Priorities:

Nearly three years ago, Andrew K. Benton asked his deans to forfeit a tenth of their budgets. The president of Pepperdine University was eager to hire more tenure-track faculty and to increase the prestige of the law school, among other priorities, but rather than finance those efforts with big tuition increases or an enrollment surge, he pursued the trickier path of redirecting dollars already in hand.

The $25-million reallocation represents about 10% of Pepperdine's operating budget. Freeing up that money has required the university to eliminate more than 100 positions and rein in spending on athletics, among other activities.

As resources diminish for colleges, and an increasingly skeptical public questions rising tuition levels, more institutions will have to mirror Pepperdine's approach of taking money from one area to pay for another, many higher-education experts say. But it's not easy. Feeling locked in by tradition and a tenure system that makes phasing out programs difficult, college leaders often struggle to cut some programs for the sake of others.

"It's much easier to create a new revenue source through a fee or by raising tuition than it is to look your deans in the eye and say, 'This is an important universitywide initiative—let's fund it ourselves,'" Mr. Benton says. ...

Pepperdine's administrators have redistributed $13-million of the $25-million they collected from their deans. Of that, $5-million has gone to financial aid. "You create your own wiggle room," Mr. Benton says. ... In his push for redirecting money, Mr. Benton has suggested he's "watering the green spots" of the institution, steering funds toward programs that have the most growth potential. ...

L. Timothy Perrin, vice dean and professor at the Pepperdine School of Law, says the faculty has largely bought into the idea that "the success of any of us helps all of us." Partially through reallocation, the law school has received more than $3-million, about 10% of its annual budget, for a program designed to improve student-faculty ratios and increase faculty scholarship. The reallocation also added money to the school's Global Justice Program, which sends students to international locations to grapple with complex legal issues, such as sex trafficking in Thailand and human-rights abuses in Uganda.

Promoting smaller class sizes and teaching students about social justice are a bit like supporting motherhood and apple pie, which may be why the law school's reallocation windfall hasn't met with any apparent opposition. But Mr. Perrin says he is aware that shifting dollars around runs a "strong potential risk of unfairness." If there is "a sense that one school or one department is being treated more favorably than others, that can cause jealousy; that can cause pettiness," he says. "We haven't seen that here."

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