In today’s clearly challenging higher education landscape, many colleges and universities are struggling financially or even closing their doors—and regional private institutions are especially vulnerable.
The current reality demands a new paradigm for the Chief Financial Officer (CFO) in higher education that expands well beyond the traditional functions to a major role in planning and building the institution’s future. This requires the CFO to direct initiatives in a far wider range of areas from enrollment to talent management, curriculum, donor relations, and more.
By expanding their roles to lead all aspects of planning and resource allocation, the CFO can serve as a catalyst for collaboration among many constituencies that have traditionally operated in silos. This critical 360-degree involvement ensures that all functions and departments are working together in unison, benefiting the institution at every level, and expediting the timeframe necessary for transformation.
Impact of the CFO’s expanded role at LIU
At LIU, the CFO’s sphere of influence has expanded to encompass non-traditional elements such as recruiting and enrollment, retention, faculty communications and governance, academic programming, talent management, marketing and promotions, public relations, and fundraising.
As a result, we have experienced great success during the past six years in achieving many objectives, including marked improvement in student academic quality, retention, and graduation rates. We are delivering competitive high-demand programs that drive growth through quality and improved University rankings, while recruiting a world class-faculty that provides research-based and experiential learning to students.
The CFO can serve as a catalyst for collaboration among many constituencies that have traditionally operated in silos.
Along with consistent ratings improvements from Moody’s and Standard & Poor’s, financial results achieved by LIU include:0
- Capping annual tuition rate increases at 2% or less since Fall 2014, at a time when regional averages have approached 4% annually.
- Generating $173 million of cumulative operating surpluses over the past six consecutive fiscal years.
- Increasing the University endowment from $78 million in 2012 to more than $230 million in FY 2018 (an increase of almost 200%).
- Achieving a perfect 3.0 financial responsibility ratio with the U.S Department of Education.
- Realizing unprecedented capital investment, with more than $15 million of capital improvements in FY 2018 that were fully funded by University operations. In contrast, six years earlier, LIU’s annual capital investment was just $2 million annually.
Shaping the institution’s future
The new model of the CFO focuses the majority of effort on constituent-facing operations, including students, faculty, donors, strategic partners, the media, and the Board of Trustees, as well as serving as a hub for driving collaboration among peers.
This transition of focus is only made possible by building and managing talented teams and leveraging information systems and data analytics that expand the CFO’s capacity for mission-critical endeavors.
At LIU, we have developed institutional dashboards for measuring all aspects of recruiting, enrollment, finances, academic programs, scholarships, fundraising, faculty workload, and other key metrics. These dashboards are utilized in driving resource allocation toward the attainment of strategic goals, such as recruiting students with improved academic credentials, modeling scholarship rubrics, and projecting resources necessary for capital investment.
Earning leadership support
It’s essential for the CFO to gain the support of the President and Board when taking on greater responsibilities—and this trust must be earned through reliability, constancy, focus, and results.
LIU’s investment in and expansion of its research strategy provides a strong example. Over the past two years, we have more than doubled our research volume, recruited world class research talent, and completed significant capital investments to support scalability for research initiatives.
Since this arena has high risks and barriers to entry, a compelling business case needed to be made to the President and Board of Trustees. My expanded role as CFO involved leading all aspects of this strategy, as well as ongoing articulation of the underlying value proposition. This meant tying together many moving parts: from targeting signature areas of research that complement curriculum, to aligning with funding agencies and establishing partnerships with top-tier players in the research world.
Higher education institutions have traditionally been late adapters of change. However, in the current competitive landscape, clinging to outmoded roles is no longer an option. The CFO needs to step forward decisively to embrace a greater role. The key is to efficiently and effectively align financial goals with strategic priorities, and avoid having attainment of one objective occur at the expense of others.
Christopher Fevola is the chief financial officer and university treasurer at Long Island University in Brookville, New York.