What’s the upside of the downturn for social enterprise?

“You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid.”  Rohm Emanuel in an interview with the New York Times.

It’s not hyperbole to say that there’s a crisis looming in funding for education, health care and welfare, not to mention the arts and humanities.

We’re re-discovering, if we ever forgot, that just when the need is greatest, the bucks available are fewest.  The sources of funding for social activities are getting decimated, or will soon be:

• States are slashing budgets as revenues decline in step with the economy;
• Foundation endowments have dropped with global stock-markets and so will their grant-giving;
• Individual pocket-books are closing up, responding to a “perfect storm of bad omens for philanthopic giving.”  – Eric Kessler, founder of Arabella Philanthropic Investment Advisors

The downside of a downturn is obvious and the danger is that the least fortunate and most vulnerable will suffer the most.

Necessity is the mother of invention

Or let’s hope that it will be.  It’s the cliche about the Chinese word for crisis (above) meaning dangerous opportunity.  It depends upon the purposeful action of real people, not on any inevitable historical rule.

But will the downturn help bring about innovations that wouldn’t otherwise have happened?

1.  Do more with less.  With fewer resources, this will be a necessity.  Will mission-driven organizations improve their productivity by testing and adopting new ways of delivering services?  Will the term “productivity” become accepted at all in higher education?  Will policy-makers and funders encourage innovation and reward measurable impact?  If yes, we could help avoid the worst consequences of the downturn and make an enduring impact.

• Will colleges adopt course redesign and use technology to change how intro courses are delivered to reduce cost?

2.  Rethink revenue models.  It’s a struggle to maintain a non-profit in better times; these worse times will be a real test.  “Venture” capital for non-profits has been designed to jump-start innovative social ventures; it plays a valuable role.  But the hard part is sustaining a venture that the “market” won’t pay for (at least not now) – once the venture is up and running.  This is truly the hard stuff – balancing public, philanthropic and for-profit revenues to make an impact:  will we discover revenue models that are more sustainable and that reward “scaling,” a fancy word for providing greater impact?

• Will higher education find new revenue models to reduce the cost of digital content?

Will we see this kind of innovation in this downturn?  I’m cautiously optimistic.

May 6th: Establishing Globally Competitive Universities

The policy, education and technology worlds are too siloed.

The World Bank is launching a new book on The Challenge of Establishing Globally Competitive Universities.  I would be more interested to learn how universities can become more responsive and more effective, but I will be equally interested to hear what “globally competitive” means.

Why not tap into your alums?

And I’m not talking about the development office.   They already want to tap into alums for their cash.

The fact is, we learn far too little in high school or college about what the world of work and life is about.  We see too little connection between what we do in class and the world beyond.  I confess to finishing high school wickedly ignorant about how my classes related to the real world, and what people did in the real world.

Yet it’s not a cliche to say that alumni are an invaluable but untapped asset for high schools and colleges.  They have direct, on-the-ground perspective on the world, have learned lessons along the way, and most would be happy to help – if they were only asked.

It used to be hard to reach alumni – not true anymore with Facebook, LinkedIn, and other social networks.  And it used to be difficult to engage them, particularly if they were in another state – with online audio, video, and other collaboration tools, that’s not an obstacle.

We can find them, and we can reach them.  The challenge is leveraging these tools to connect to alums and enrich learning.  Why not think about ways that learning could be enhanced through connections with school alumni?

Student projects for alums and their employers?  Alum presentations to supplement and enrich classes?  Mentoring and advising?

Interview with Keith Hampton

Keith Hampton, manager of the LinkedIn Higher Education Management Group, was kind enough to give me the opportunity to spout off on a few topics of interest:

• the state of the outcomes assessment technology field;
• the emergence of customized learning and what’s holding it back;
• the opportunities for data sharing across P-20 and what opportunities we’re missing.

Here’s the link...

Breaking point for US higher education?

Over the summer, analysts suggested that there was something psychological about $4 a gallon gasoline that would make American consumers change their behavior.

Of course, the financial crisis and recession have completely changed the game.  Even at $1.75 a gallon, consumers aren’t just driving less or buying more fuel efficient cars, they are hardly buying cars at all.

Attending a fine seminar hosted by the Education Sector, I was reminded of how long observers have wondered the same about higher education.   Just how much longer would the price of college go up before students and parents cried uncle?  I think we’re there.  It’s not just costs, it’s everything together:

1. Reduced family savings and 529 accounts decimated by the drop in the stock markets (how many accounts were indexed to shift into a less volatile mix as college got closer, like retirement?)
2. Fewer jobs for students to help pay their way
3. Increased costs of borrowing for colleges
4. Reduced student loan options
5. Reduced funding from states getting less tax revenue
6. Greater uncertainty about the future, making bigger loans seem more risky

The pressure is coming from both sides:  increased costs for institutions and less state support, combined with less ability and willingness to pay among consumers.  The perfect storm analogy is used too much, but it’s appropriate – the impact could be devastating.

More thoughts on how this will shake out in my next post.