Published on 2013/04/04

Partnerships for Non-Profit Institutions: A Worthwhile Endeavor?

Partnerships for Non-Profit Institutions: A Worthwhile Endeavor?
Partnerships between for-profit vendors and not-for-profit institutions are becoming increasingly commonplace across the higher education industry.

At this year’s UPCEA National Conference in Boston, The EvoLLLution will be moderating a panel discussion between Reed Scull (University of Wyoming), Rick Shearer (Penn State University), Joseph Ugras (La Salle University) and David Clinefelter (The Learning House) on the topic of partnerships between non-profit higher education institutions and for-profit service providers. The discussion will be held on Thursday, April 4 at 3:15 p.m. (EST).

The following article outlines some of the topics that will be put before the panel, and some of the panelists’ initial thoughts on those concepts.

1. What factors must administrators take into account before entering their non-profit institution into a partnership with a corporation?

Joseph Ugras

The reason for the collaboration is to solve a challenge related to a constraint the academic institution is facing. The institution must consider how the relationship will solve the challenge/constraint:

  • Are there issues with economies of scale or is there a core competency that the vendor brings or is it just a financial relationship/risk sharing?
  • What steps are taken to ensure the provider has the core competencies desired by the academic partner?
  • How will the collaboration be financed?
  • How long should the relationship last and how will it end?

The two players should consider the supply chain of the connections and what role will be played by each of the collaborators. It has to be a win-win relationship for the collaboration to be sustainable in the long run.

Reed Scull

The competition between resources and demands from institutional stakeholders is a significant consideration. Many public and private institutions are not as well funded as they used to be, and the demands to grow operations and provide more and better programming continues unabated, particularly for continuing and distance educations units, which are often seen on campus as the source for new initiatives and innovation/growth.

There are many factors to consider when contemplating a partnership with a corporate or otherwise for-profit provider. Most of the considerations relate to the unique context of a higher education institution. The philosophy of top institutional leadership is a factor. Some institutions, particular those with strong faculty or governmental involvement over continuing and distance education activities, want tighter control over those activities and would prefer not to see them “handed off” to a third party. Other considerations for entering into a non-profit/corporate partnership include the need to acquire a start-up or scalable infrastructure, the need to acquire specialized skills or expertise (e.g., an institution might lack the expertise in student authentication techniques), or the need to create the research and development capacity that would contribute to an institution’s strategic planning and reinvention efforts.

2. Which elements of an institution are most affected by vendor partnerships? By the same token, who has the most capacity to stop or delay a partnership?

Rick Shearer

If we are talking about a vendor-client relationship, then the party within the institution that is most impacted is the unit currently running an alternative product or service. If they are not central to bringing in the new product or service, they stand the risk of being marginalized in the process. They can turn their backs on the new relationship and hope it goes away or they can engage to help steer the relationship so they are not negatively impacted. These folks may also have some ability to stop or delay the relationship, but it is more likely that purchasing and risk management have the greatest hand in being able to stop the process.

Also, if there is not appropriate buy-in by the impacted parties, while they may not be able to delay or stop the relationship, they will be able to subvert the relationship, which could possibly lead to a failure to fully adopt and embrace the service or product.

David Clinefelter

Partnerships often impact numerous elements or departments of a university. For example, the choice of a learning management system (LMS) vendor impacts the university center for faculty development, the office of institutional research, the registrar’s office and the IT department. Faculty members need to be trained to use the LMS. Data needs to be extracted for the university assessment plan and the registrar needs to get grade reports from the LMS. It’s important to consider all the departments that be affected by an LMS decision. Many partnerships are more comprehensive than the use of an LMS, including areas such as marketing, enrollment management, student services and curriculum design.

Any department that isn’t fully supportive of the partnership can slow it down and cause friction and complications. It is very important to carefully consider every possible department that may be affected and include them in the review process and implementation planning.

Reed Scull

One can envision a continuum of possible non-profit/corporate partnerships, with the provision of distinct and discrete categories of support services (e.g. research services, student authentication services, technology help desk services) on one end to more extensive partnerships involving the running of a distance education unit on the other end. Who or what element of an institution is impacted often depends on the extent of the partnership.

For some traditional non-profit institutions, the provision of faculty and content represents an extreme end of the continuum that is a “bridge too far” for consideration by top institutional leadership. For other non-profit institutions, acquiring faculty and content from a corporate partner might be the only way to get new programs and achieve enrollment and financial growth.

Partnerships for Non-Profit Institutions: A Worthwhile Endeavor?
There are a number of factors that must be considered prior to entering into a partnership — and a number of steps institutions must take once in a partnership — in order for the match to be a successful one.

3. What are some critical elements of running a successful partnership between a non-profit institution and a corporation?

Rick Shearer

First, institutions must determine what the strategic purpose of the partnership is. This must be clear and well-articulated at the start, along with the factors that will constitute success. Next, institutions must hold a set of meetings with key internal stakeholders to explain the partnership benefits, discuss the concerns and achieve buy-in before proceeding. This will mitigate any delays caused by in-house disenchantment.

Once approved, a strong implementation team must be put in place that is tasked with project management and key milestones. Frequent updates to the stakeholders are also important to keep the project in front of all of them. Further, yearly (at minimum) evaluations must be conducted and presented.

After the partnership gets underway, it’s important to stay the course. While the elements of the partnership can be modified via input, the primary purpose and goal should not be altered based on individual stakeholders’ input. The goal and strategic reason must be clear and have a laser focus. If things do not go as anticipated, or if the partnership runs its course, an exit strategy must be put in place. It is not healthy to let a relationship hang on after the ‘value add’ is gone.

Joe Ugras

One should have inclusion of all key parties from the beginning and buy-in from all parties involved to ensure the least amount of resistance. Agreement details should be handled by key parties for the success of the program. The financial agreement should anticipate the impact of changes to the parties involved. The academic collaborator should not leave the vendor on their own after the contract is signed. Instead, a continuous communication between the parties should occur. There should be a plan that identifies the individuals responsible for communicating with each other on a regular basis. A timetable for implementation of the key items in the relationship should be developed. The expectations should be outlined in the contract. If the project is to be successful, both parties should share some of the program risk. The academic collaborator should research some existing partnerships the vendor has. A due diligence should be performed on the vendor, including their financial strength to sustain the relationship.

David Clinefelter

Among the elements for a successful partnership, one that is frequently overlooked is the process for monitoring the performance of the corporate vendor. The university administrators need to be clear about just what the corporation will do in the agreement and then spell out what activities are expected and the performance reports and other data that will be made available. For example, if a partnership includes marketing services, what is the range of activities that will be performed, how much money will be spent, what results are expected in terms of inquiries or leads or applicants, and what data will be reported showing the response to the various marketing activities? The partnership will be more successful if the administrators have good insight into the operation of the vendor. Not every report can be envisioned in advance and spelled out in an agreement, but the basics can be thought through and the principles laid out.

Reed Scull

Again, institutional leadership must be open to partnerships. If leadership has little experience with such agreements or, worse, has had bad experiences with such agreements, partnerships are a tougher sell. Keep in mind that many institutions have purchasing/contract administration offices, research administration offices and legal offices that can present significant hurdles to forming partnerships, so there are plenty of mid-level administrators that have a stake in partnerships.

Accreditation and regulatory considerations can be significant. Most regional and many specialized accreditation bodies have standards for services provided by “outside” parties, and administrators considering partnerships need to become aware of the parameters of those standards. Distance education regulation is evolving in its scope and complexity, and regulations could either prohibit or call for certain kinds of partnerships.

Sustainability concerns of for-profit providers are real. Companies can go out of business or be taken over by other companies. Some of the more spectacular takeovers have occurred in the LMS field.

4. What kinds of tasks should institutions outsource, and what should they keep in-house?

Rick Shearer

This is hard to answer as it depends on the institution’s mission, size and geographical location. Larger institutions can absorb more than smaller institutions. For some, managing their own LMS is fine, while for others it is better to outsource and let the back-end management be someone else’s responsibility. The key is: what are the elements of your institution that makes it stand out from others, in other words, what is the ‘special sauce’ that you can absolutely not outsource? Is it your unique student services approach, is it a unique online course design or is it something else? Each institution has to answer this question.

David Clinefelter

The general principle is that institutions should outsource anything a corporation can do better, faster or cheaper. This will vary according to the size and location of the institution. For example, small institutions in remote areas may have a difficult time hiring qualified people in a variety of functions so it may outsource more services than a large institution in a metropolitan area that has more money to work with, and better access to, qualified people. Also, the closer the function or service is to the core university mission of teaching and research, the more selective the university should be regarding outsourcing and the more care should be given to insure strong performance of the vendor.

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Readers Comments

Alicia Ramos 2013/04/04 at 9:54 am

Thanks for giving us a taste of what to expect at the discussion today. As these types of partnerships become increasingly popular, it’s useful to hear what experts in the industry have to say. I won’t be able to attend, unfortunately, but look forward to reading a recap — or perhaps something from the panelists themselves — in a future piece in The EvoLLLution.

Lisa C 2013/04/04 at 11:43 am

Really looking forward to the discussion this afternoon. I’m hoping these four will discuss how the dynamics of these partnerships may change depending on size and type of institution. Rick Shearer picks up on this towards the end of this article, and I’m hoping he will go into more detail. It’s an important reminder that no two partnerships are the same, and it’s really up to the institution to have internal consultations and look at their data and their needs to make the best choice for them.

Kelly Tibbit 2013/04/12 at 2:23 pm

It’s interesting to consider the aspects of a partnership that might stop it from taking shape. I’ve heard a number of stories anecdotally from colleagues across the industry who have been in the process of signing off on a partnership before it crashes and burns because every party wasn’t brought in on the ground floor. Just look at the fuss at the University of Arkansas!

When it comes to academic side partnerships, it’s too dangerous to simply inform stakeholders after the fact that a partnership has been established. Every stakeholders in the institution must be part of the planning process.

John DeLalla 2013/04/12 at 5:51 pm

I started a dissertation prospectus a few years ago on the topic of public universities outsourcing their Continuing Education offerings to private, for-profit businesses. I changed topics due to a lack of literature at the time.
The overall (and informal) conclusion I came to with my limited research was this: there is a mismatch of ideals between the desire for profit and the spirit of community service. It’s not that it can’t be done – it’s that finding a common balance is difficult. Outsourcing certain aspects of your CE operation is different, and I look forward to more discussion on this topic.

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