Institutional Financial Planning for Presidents CIC President s Institute Workshop

Transcription

1 Institutional Financial Planning for Presidents 2015 CIC President s Institute Workshop

2 Institutional Financial Planning for Presidents 2015 CIC President s Institute Workshop Peggy Plympton Education Practice Consultant November 8, 2013

3 Introduction, Context and Recent Research, President/CFO Relationship and Making the Case to Campus

4 Introduction and Context Context for Higher Ed, nationally Recent Research on President/CFO Relationship President s Perspective on Institutional Financial Planning, Strategy, and Campus Context The CFO: Financial Modeling and Strategy Implementation The President-CFO Relationship Making the Case on Campus

5 Recent Research Witt/Kieffer White Paper (copies available) Changing business model with respect for shared governance CFO as: Strategic financial planner/analyst Communicator with all constituents Clear understanding of academic mission/goals Creative, entrepreneurial in saving money and expanding revenues Next up - Two Presidential Perspectives on Institutional Financial Planning and Campus Context

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26 Stetson University Strategic Map: 2011/12 to 2013/14 Focus Innovation to Drive Stetson from Success to Significance Approved 5/12/11 A B C D E F Clarify and Assert Stetson s Identity, Values and Distinctiveness Increase Targeted Enrollment and Retention of the Best Students for Stetson Increase the Excellence of the Academic Program Optimize the Total Lifelong Stetson Experience Renew and Build Critical Systems and Infrastructure Be a Great Place to Work 1 Define What It Means to Be a Hatter Clarify, Target and Recruit the Best Students for Stetson Identify Principles and Indicators of Excellence and Distinctiveness Develop/Solidify Culture of Lifelong Relationships with Stetson Complete/Update the Facilities Master Plans Effectively Express the Value of Faculty and Staff 2 Establish and Embody the Consistent One Stetson Message Provide Curricular & Cocurricular Programs to Attract/Retain Students Assess Significance & Use Results to Improve Academic Excellence Increase Campus Vibrancy Seven Days a Week Achieve Appropriate Coordination of Multi- Campus Processes Align Total Compensation with Relative Markets 3 Increase Awareness & Understanding of Stetson s Core Values Provide an Education Suitable for Diverse 21 st Century Learners Focus, Streamline and Support Academic Programs Expand the Student Success Program Implement Facilities/Asset Renewal Improve Internal and External Communications (Transparency) 4 Articulate and Promote Distinctiveness Internally and Externally Increase Engagement of All Constituents in Recruiting/Retention Enhance Faculty Development, Scholarship, & Pedagogical Innovation Create a Database of Student Experiences: Admissions Alumni/ae Improve Use of Banner and Web-Based Systems Clarify the Roles of Faculty and Staff in Governance 5 Make Intercultural Learning Vital to the Stetson Experience Foster Interdisciplinary Learning Opportunities for Faculty and Students Foster Civic and Community Engagement Leverage Technology- Enhanced Learning and Communications Increase Professional Development & Leadership Opportunities G Increase Financial Health and Sustainability H Deepen the Way We Live Stetson s Core Values

27 Stetson University Strategic Map: Establish Stetson as a University of Choice for Innovative Approaches to Tackling Complex Challenges FINAL 5/9/14 A B D E C Demonstrate Stetson s Distinctiveness & Value Proposition Enhance Excellence and Innovation in Learning Empower Lifelong Success and Significance Secure the Resources to Ensure Success Increase Organizational Resilience and Adaptability 1 Strive for Vision-Driven Distinctiveness Foster Collaboration and Interdisciplinary Learning Experiences Coach, Advise and Mentor in Support of Success and Significance Diversify Revenue Streams and Maximize Cost Effectiveness Streamline Systems and Processes 2 Develop and Communicate a Compelling Future Value Proposition Build Shared Understanding of and Commitment to Academic Rigor Exemplify Experiential Learning as Core to Stetson Implement a Best Practice Alumni Engagement Capability Use Real-Time Forecasting and Modeling to Drive Decisions 3 Enhance Stetson s National Reputation Using Strategic Communication Emphasize Learning in Communities: Residential, Local, Global, Virtual Expand and Deepen the Development of the Whole Person Attract and Retain the Best Employees for Stetson Make Enterprise Risk Management Ubiquitous 4 Recruit the Best Students for Stetson Create a Learning Environment That Attracts Intellectually Motivated Students Inspire and Support a Culture of Lifelong Learning Use Human Resource Planning to Drive Innovation Improve One Stetson Communication and Commitment 5 Tackle Community Challenges in Multi-Stakeholder Partnerships Advance Inquiry, Scholarship And Creative Activity Strengthen Career Readiness and Graduate Success Enhance Faculty and Staff Development Envision, Build and Adapt Technology 6 Continue to Foster Stetson s Core Values Infuse Technology into Pedagogy to Support High-Impact Learning Improve Outcomes Through Alumni Engagement Optimize Use of and Return on Real Estate, Infrastructure and Capital Assets F Expand and Strengthen Strategic Partnerships G Be a Diverse Community of Inclusive Excellence

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57 The CFO Financial Modeling and Strategy F. Robert Huth Jr. VP for Business and Chief Financial Officer, Stetson University John Palmucci Jr. Senior VP for Administration and Finance, Valparaiso University

58 Strategy, Risk, and Insurance Strategy Undertaken to improve and enhance Changes the status quo Typical Big Decisions Grow or shrink size of institution Add or delete programs Major real estate purchases Build new facilities Acquire additional campus

59 Strategy Potential Risks Financial Resources do not materialize Costs exceed projections Facilities built become stranded assets LUST and other unforeseen bad days Reputational Negative head-lines Morale Execution Opportunity

60 Strategy Insurance Multi-year financial modeling Stress tests (Plan B s) Breakeven ROI Contingency budgeting Endowment spending capacity Borrowing capacity Pace

61 Strategic Considerations Step functions Current facility capacity Classrooms and offices Beds and dining Residential requirements Athletic facilities Current financial capacity Types of cost Fixed Variable Identify on continual basis (stress tests can help)

62 Strategic Considerations (Cont d) Financial Capacity Level of financial data integrity Debt rating % endowment spending rate Donor capacity/fatigue Net tuition trend Net operating margin Contingency size in budget Stated Within salary budgeting (amount of salary lapse) Capacity for Boldness (SFI position)

63 Strategic Considerations (Cont d) Sharing costs and risk Collaboration Alternative financing Outsourcing Flexibility End program Sell property Constituencies including Town/Gown

64 Strategy Due Diligence Multi-year Financial Modeling and Stress Testing Integrates strategic decisions into institution s financial future Articulates strategic plan in financial terms Assists in determining feasibility of strategies Identifies available insurance and Plan B s Helps to manage pace and timing Donor driven projects and $ s in hand Supports Board authorizations

65 Example Model/Stress Test Scenario Sample institution Financial capacity Multi-year assumptions Strategic initiatives Grow student body by 5% Add residence hall Add new physician assistant program Stress test

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71 The President-CFO Relationship

72 DISCUSSION/QUESTIONS

73 Wrap-Up