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2011 Higher Education Government Relations Conference Performance-Based Funding (PBF): A Re-Emerging Approach to Boosting Institutional Outcomes San Diego, CA December 1, 2011 Thomas L. Harnisch Policy Analyst American Association of State Colleges and Universities Washington, D.C.

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2011 Higher Education Government Relations Conference

Performance-Based Funding (PBF): A Re-Emerging Approach to Boosting Institutional Outcomes

San Diego, CA

December 1, 2011

Thomas L. Harnisch

Policy Analyst

American Association of State Colleges and Universities

Washington, D.C.


Observations
Observations

Performance funding is being revisited

A mixed history of success, failure

Approaches vary considerably by state

Has both promise and pitfalls

Process and design are key to successful programs


What is performance based funding
What is Performance-Based Funding ?

  • State funding (partially) linked with campus outcomes

  • Theories: Resource dependency; incentives

  • Models: Output, Contracts, Set Asides

  • Components: Goals, Measurements and Incentives

  • Shifts discussions from inputs to outcomes


Metrics outcomes
Metrics/Outcomes

  • Variety of metrics and weights in PBF systems

    • Credit milestones (48, 72, etc.); retention rates

    • Graduation Rates

    • STEM Degrees

    • Weights applied toward enrolling nontraditional/underserved populations

  • Some systems allow for a “menu” of metrics


Pbf has returned
PBF has returned

  • Not a new solution, but popular again

  • Lessons learned from previous approaches

  • Why now? Workforce requires more graduates + less state money=improved performance required

  • Promotion from major players---Lumina & Gates Foundations, College Board, NGA, ECS, Obama Administration


Promises
Promises

  • Clarifies, reinforces institutional mission

  • A true statement of priorities

  • More transparency and accountability

  • Potential for productivity gains


Pitfalls
Pitfalls

  • Limited portrait of performance

  • Mission distortion/student access concerns

  • Threats to quality, objections by faculty

  • History of program failure, abandonment


Getting started process
Getting Started-Process

Establish state goals

Look for legislative champions

Earn institutional support

Stakeholder “Buy In”

Commit to PBF for up and down budget cycles


Design
Design

Key Issues: Funds, Measures, Performance

Consider starting small, yet relevant

Ensure institutional flexibility to meet goals

Respect institutional differences

Anticipate efforts to “game” the system

Evaluate outcomes, recognize success


Sources
Sources

Arthur Hauptman, “Performance-Based Funding in Higher Education,” Financing Reforms for Tertiary Education in the Knowledge Economy (2005),

Brenda Norman Albright, “Higher Education Performance Funding 2.0 Tip Sheet,” Lumina Foundation for Higher Education (2009),

Doug Lederman, “Performance Funding 2.0,” Inside Higher Ed, December 17, 2008, http://www.insidehighered.com/news/2008/12/17/perform (accessed May 9, 2011).

Joseph Burke and Associates, Funding Public Colleges and Universities for Performance

Kevin Carey, “Truth without Action: The Myth of Higher Education Accountability,” Change Magazine (2007),

Kevin J. Dougherty and Esther Hong, “Performance Accountability as Imperfect Panacea: The Community College Experience,”

Kevin J. Dougherty and Rebecca S. Natow, “The Demise of Higher Education Performance Funding Systems in Three States,” Community College Research Center Brief (2009) http://ccrc.tc.columbia.edu/Publication.asp?UID=693 (accessed May 9, 2011).

23M. Crellin and others, “Catalyst for Completion: Performance-based Funding in Higher Education” New England Board of Higher Education Policy and Research (2011), http://www.nebhe.org/info/pdf/PerformanceFunding_NEBHE.pdf (accessed April 17, 2011)


Thomas L. Harnisch

Policy Analyst

American Association of State Colleges and Universities

Washington, D.C.

[email protected] ~ 202.478.4660

aascu.org/policy


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