Develop a Balanced Funding Portfolio
A diverse portfolio will simultaneously enhance the capacities of centers and allow them to sustain shifts in funding structures.
Internal vs. External Sources
Centers should consider a portfolio that includes both internal funding (from the housing institution / university), and external funding (state, national, philanthropy, etc.). Internal funding allows Centers to serve campus, to be seen as a core part of campus identity, and can provide security. Meanwhile, external funding enhances capacities, serves to build reputation both on and off campus, and contributes to the national dialog around issues of importance to the center. It difficult for centers to serve the specific needs of their host institution if the sole long-term sources of funding are external. Often centers start with either internal or external, then transition to a balanced portfolio.
Pros and Cons of Different Funding Streams
There are a variety of mechanisms for funding Centers. Each source/type of funding brings a variety of opportunities and limitations.
Grants: Grants can provide centers with directed, time-limited resources for specific programmatic purposes (which may or may not be directly aligned with its mission). Each one will come with it's own rules, regulations, and limitations depending on the organization making the grant. Having multiple grants supporting different programs can magnify the administrative time needed to manage them appropriately and can result in staff being spread thin. Grant funding can also be contentious and it takes time to cultivate the necessary experience to be successful.
Fee for service/Contracts: On the pro side, these arrangements provide a direct tie between the purpose and the money. However, some internal partners may view this as counter to the culture of academic professionals. Also, it is often the case that no one charges for the hidden cost of communication. It is critical that contract work is explicitly tied to the mission of the center in an arena where the center has capacity.
Gifts/Endowment: Gifts and endowment income are usually not micromanaged yet can be very secure. But endowments are subject to fluctuation of markets, as well as the external priorities of donors and the institutional development office. Emphasizing growing an endowment can also divert dollars from immediate operating needs to a some future project.
Facilities and Administration (F&A): F&A from externally funded projects can be distributed in a variety of ways across the institution and institutional guidelines and tradition often govern this distribution. Centers can negotiate the return of some of these fund to provide a pot of very flexible money to pull from. Such funds can be used for many things including physical space, administration of grants or benefits, or as a means of cultivating relationships via supporting other groups on campus. One potential downside is that negotiating a return agreement can be a contentious political undertaking.
Directed vs. Undirected Funding
Another dimension of funding to consider is the purpose of funding: directed (towards specific ends) or undirected (general or emergent goals). Each center should find the balance between strong funding for the programs that currently serve their participants and the flexibility to try new approaches to the issues they care about.
As seen above, different funding sources are aligned with differing missions. It is important to attend to how prescriptive the funding sources and projects are, and revisit the alignment of funding with center mission. This re-visiting ought be bi-directional:
- Centers can use the mission to select (and avoid) funding opportunities. Does this funding fulfill / align with your strategic plan?
- Centers can use the funding structures, programming, communication, and community to adapt the vision/mission to new circumstances.
Examples of the history, shaping and adapting of vision/ mission and funding can be found in the Essay and Center Profiles collections.