Few Boards Do Sophisticated Financial Planning, Experts Say

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Related, A concurrent session at SCUP–44, July 18–22: From Operating Revenues to Capital Funding and Beyond–New Tools for Financial Planning and Policy

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Paul Fain reports, in The Chronicle of Higher Education, on an AGB presentation by SCUPer Tom Longin, executive editor of Planning for Higher Education. We thank the Chronicle for providing us a nonprotected link to the article.

[T]he yearly budget exercise can give trustees a misperception of their institutions' fiscal health, said Thomas C. Longin, one of the presenters and a longtime consultant for colleges and the association. That's because many colleges have become adept at just surviving year to year, without conducting longer-term strategic financial planning.

"If we get fixated on balancing the budget, we will never have any control of costs," and that will lead to higher tuition and deteriorating academic quality, Mr. Longin told trustees. "If you simply focus on getting out of the hole you're in, you'll just get in deeper."

The solution, said Mr. Longin and his co-presenter, Richard Staisloff, vice president for finance and administration at the College of Notre Dame of Maryland, is for boards to shift their financial attention to strategic monitoring of how their institutions invest "time, talent, and treasure" over the next three to five years.