Ucla Fss Briefing

8/8/2019 Ucla Fss Briefing

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Financial self sufficiency for UCLA Anderson School of Management - Briefing sheet Page 1

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Background and Support for Financial Self Sufficiency at UCLA Anderson:

y The University of California has experienced a well documented continuing decline inState funding. As a result, UCLA Anderson School of Managements (also referenced as

the School) continued excellence is critically dependent on sustainable revenue

streams, significant investment in students, faculty and programs, and flexibility to make

key managerial decisions regarding student fees, faculty compensation and recruitment,

and resource management.

y UC-wide funding cuts and salary reductions have come at a time when peer MBAprograms are making unprecedented investments in programs, faculty and students,

and when the market for top research faculty in business is extremely tight.

y 82% of UCLA Andersons funds are already self-generated through revenue streamsfrom degree and non-degree programs, and from private support.

y UCLA Anderson School of Management is proposing to add the full-time MBA programto the self-operated model.

y The School would remain unchanged in its commitment to the public mission,affiliation with the University and academic units across the University, and adherence

to faculty and curricula procedures.

y As is true currently for the other Masters programs at UCLA Anderson (FEMBA, EMBA,MFE), the School would retain all student fees.

y A portion of the State support currently received by UCLA Anderson -- that which is notderived from student and program fees -- would be redirected to unfunded orunderfunded undergraduate mandates at UCLA.

y The proposed financial self sufficiency model has been approved by faculty, the UCLAAnderson Board of Visitors and UCLAs leadership. It will be submitted to UC

President Mark Yudof for vetting and his final approval.

Viability of Financial Self Sufficiency for UCLA Anderson:

y The innovative proposal for UCLA Andersons financial self sufficiency is consistent withthe new UC vision that the President and UCs Commission for the Future are

espousing, which includes a call for self sufficiency models where they can work.

y The UCLA Anderson financial self sufficiency model would be viable only for a very fewschools in the UC system, so it is not the answer to UCs funding crisis. If generalized, it

is an innovative solution that protects excellence in some units, while unburdening

State funds to financially benefit other parts of the campus.


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Key Figures on Current UCLA Anderson Budget and State Support:

Current UCLA Anderson Total Budget $96 M

Current State Support $17.9 M(18.6% of the total budget)

Breakdown of State Support ($17.9M)

Imputed student fees (to be retained

by School under financial self sufficiency) $8 M

Fees for UG program delivery $4.3M

Lost State Support $5.6 M

Impact and Benefits of Financial Self Sufficiency model:

y The public mission of the school and faculty/student affiliation with UC would notchange UCLA Anderson would have the same relationship with the UCLA community

and Senate as it does currently.

y The benefits to UC and to UCLA would include the ability to redirect funds to cover thecost of undergraduate over-enrollment and unfunded mandates at the University, plus

receipt of a fee from UCLA Anderson for centralized services.

y To offset the loss of State support, UCLA Anderson would engage in cost containmentefforts, and grow private funding and new program revenue streams.

y Student fees would increase modestly compared to the current funding model sincethey have already escalated to near market levels given declining State support.

y Student aid would increase by nearly 30% in the proposed model.y The School would provide a $5,000 annual tuition discount to California residents from

its own funds.

y The School will obtain flexibility in fee setting, and faculty hiring and salaries subject tolocal UCLA oversight.

y This approach will enable UCLA Anderson to protect its academic excellence andcontinue to grow despite declining State funding, provide UCLA the opportunity to

fund undergraduate priorities from funds no longer designated for UCLA Anderson,

incentivize the growth of new program initiatives given the direct benefits to the

School, and serve as an innovative model for other schools across the entire UC

system.

y The benefits are to the School, to UCLA, to UC, and to the economy of the region. As aschool with 40% entering students from California, and about 75% ending up placed in

California, UCLA Anderson is a major importer of talent, and contributor to the

regions business leadership pipeline.


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Where is UCLA Anderson currently in the review process for financial self sufficiency?

y UCLA Anderson has not yet received approval to move towards financial self sufficiency.y Implementation is pending review and approval by UC President Mark Yudof.y 80% of UCLA Andersons faculty have voted in support of financial self sufficiency.y UCLA Andersons Board of Visitors voted unanimously in support of financial self

sufficiency.

y UCLA Andersons proposal has been vetted and supported by UCLAs Chancellor and itssenior leadership.

y The proposed plan calls for a multi-year implementation starting July 1, 2011,featuring a gradual decline of State support.

y Once accepted, UCLA and UCLA Anderson will re-evaluate the self-sufficiency modelafter 3 years to determine the appropriate exchange relationship in light of initial

experiences.

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Ucla Fss Briefing