The document discusses key performance indicator (KPI) dashboards and benchmarking for higher education institutions. It outlines the case for good communication of financial and operational data through dashboards to highlight potential problems. It describes effective dashboard principles like understanding context, perceiving and presenting data accurately and linking data to mission and strategy. Benchmarking is presented as a way to maintain viability by comparing performance to peers. Examples of common higher education KPIs and benchmarking groups are provided.

1. Measuring What Matters Key Performance Indicator Dashboards and Benchmarking for Higher Education Nicholas J. Wallace, CPA Capin Crouse LLP

2. AGENDA Introduction – The Case for Communication Principles of Effectiveness Dashboards Benchmarking

3. The Case For Good Communication " NEW TUITION CHALLENGES AT MANY U.S. PRIVATE UNIVERSITIES ” Moody’s Investors Service 2009 “ FINANCIAL CLIMATE CHANGE ” NACUBO Business Officer, January 2010

4. The Case For Good Communication " TIME TO REGROUP ” NACUBO Business Officer, January 2010 “ BUFFETED BY ECONOMIC HEADWINDS ” NACUBO Business Officer, March 2010

5. The Case For Good Communication The Chronicle of Higher Education From the issue dated June 12, 2009 “ More Than 100 Colleges Fail Education Department's Test of Financial Strength” 5 schools have actually closed since that time

6. The Case For Good Communication “ 61% Have Less Than 3 Months of Cash Months of Cash Available”. “ Of the 61%, 12% have no cash available. What constitutes a healthy amount of ready cash varies depending upon an organization’s business model and then reliability of its revenue streams.” Source: Nonprofit Finance Fund Survey: America's Nonprofits Brace for Tough 2010

7. The Case For Good Communication “ WEATHERING TURBULENT TIMES ” Michael Townsley, NACUBO 2009 “ Turnaraound, Leading Stressed Colleges and Universities to Excellence ” Martin and Samels Johns Hopkins 2009

8. The Case For Good Communication “ These colleges reported rising debt loads, continuing deficits, shrinking net assets, falling enrollment, switching investments into fixed assets, and dwindling amounts of cash leading up to their demise.”

9. The Case For Good Communication “ These conditions are major factors in either the CFI scoring system or in other basic financial measures…If they had tracked their financial trends using these ratios, it would have been apparent that their financial and marketing strategies were failing miserably” WEATHERING TURBULENT TIMES ” Michael Townsley, NACUBO 2009

10. Dashboards What they are: Summarized management information Designed to highlight key performance indicators Arranged in a graphic (sometimes digital) format Designed to highlight pending problems so that diving into operational details can be avoided — if there is a problem, it will be highlighted “ You see, but you do not observe.” - Sir Arthur Conan Doyle (1859 - 1930), A Scandal in Bohemia (Sherlock Holmes)

11. Dashboards What they are not: Comprehensive reports Indicative of qualitative measures Tools allowing broad conclusions on key issues “ They are ill discoverers that think there is no land, when they can see nothing but sea.” - Sir Francis Bacon (1561-1626)

12. Provide concise analysis derived from available data. Narrow the focus to important issues and key areas. Explain trends, benchmarks, and targets clearly. Demonstrate the impact on decision making. Stimulate questions that explore issues beyond the data alone. Ground Rules for Dashboards

13. Understanding the context Perceiving the data Making it understood Presenting the data Getting the right data Procuring the data Steps for Effective Dashboards

14. Understanding the Context Without sufficient context, more data does not equal more understanding. Three key questions to ask when collecting data: What are the high priority functions critical to the success of the success of the institution? What types of measurement (volume, timeliness, customer satisfaction) are most important?

15. Understanding the Context 3. Are there any measurements that in the past have produced some “surprises” and should be included?

16. Context Suggestion In front of each report, supply a narrative that explains: The significance of the data and the trends in the data How the data and related trends tie to strategic planning objectives Problems or opportunities the data is highlighting and actionable steps that are being considered or recommended.

17. Getting the Details Right Closely linked to mission and strategic plan Resolves unanswered questions Relevant to their level of responsibility Accurate and timely

18. Data is closely linked to the mission and strategic plan Longwood University Getting the Details Right

19. Resolves Unanswered Board-Level Questions: Ratio Map Getting the Details Right

20. Getting the Details Right Resolving Unanswered Questions Are we solvent? Cash flow adequacy Working capital Primary Reserve Are we efficient? Net operating margin Discount rate Student faculty ratio Are we sustainable? (I do not mean green) Endowment per student Debt per student Deferred maintenance

21. MARCH MEETING Student Placement Data Satisfaction Survey Results OCTOBER MEETING Student Enrollment Student Quality (SATs, Average GPA) Student Diversity (Racial, Geographic) Diversity of Faculty and Staff Retention DECEMBER MEETING Strategic Indicators Financial Ratios MAY MEETING Faculty Salaries Staff Salaries Courtesy of Rick Staisloff, College of Notre Dame Getting the Right Data Data is accurate and timely

22. Presenting Data Adapted from Guide to Board Information Systems by L. Butler (AGB).

23. Deciding What to Measure Six Approaches: Outcomes Mission as Spine Strategic Initiatives Drivers of Success Risk Factors Service/Resource Matrix Courtesy of The Nonprofit Dashboard: A Tool for Tracking Progress by Lawrence M. Butler Available from www.boardsource.org

24. Deciding What to Measure Mission as spine example: College x is a challenging and supportive community whose members take responsibility for lifelong inquiry, transformative learning and meaningful service. Supportive Community – Support score on student survey Lifelong Inquiry – percentage of graduates in post – graduate work Meaningful Service – Percentage of graduates in serving professions (Teaching, nursing, etc.)

25. Deciding What to Measure Strategic Initiatives Approach: (See NACUBO Performance Measurement Toolkit) 1. Retain high quality, diverse faculty Metric Potential Sources Percent of faculty tenured IPEDS Competitive salaries CUPA;AAUP Faculty and student surveys HERI;NSSE; CCSSE Faculty diversity statistics CDS, IPEDS

26. Deciding What to Measure Drivers of success approach: Admission/Acceptance rate Matriculation rate Retention rate Student/Faculty Ratio SAT scores of entering freshman Faculty compensation Faculty degree status (percentage with Phd) Graduation rates Discount rate Endowment per student Alumni giving rate Composite Financial Index

27. Deciding What to Measure

28. Deciding What to Measure DOE Financial Responsibility Ratio

29. Cool trumps useful – Be sure that the actual business use remains the primary focus. More is better – Fewer key performance indicators are better than more. Lack of relation between strategy and action – Keep the data focused on information users can actually act upon. Misunderstanding the difference between real changes in data and reporting anomalies like timing of data. Presenting Data: Common Pitfalls

30. A purposeful comparison against an internal or external individual or group. The comparison is qualitative, quantitative, or both. It is based on the desire to be “typical,” “better,” or “best.” What is Benchmarking?

31. Maintain financial viability Demonstrate accountability Operate strategically Plan realistically Allocate resources appropriately Support decision making Assess outcomes Participants in CIC/AIR/NCES Management Institute, 2002-2004 Key Challenges Facing Most NPOs: The Need for Benchmarking

32. Costs Time, money Organizational friction Benefits Mission focused Frame for reflection Fact-based function Comprehensive view Reinforces performance Reality based Historically valid Cost vs. Benefit

33. Competitive situation Financial viability at risk Money and donors scarce Sales and services competitive Complex environment Accountability Transparency Raised public expectations of leadership Why Benchmark Now?

34. Audit your situation Select measures Form groups Collect data Monitor outcomes Use results Adjust process Steps in Benchmarking

35. Primary Factors Demographics Location/region Financial structure Relative size Secondary Factors Religious affiliation/ownership Program functions Selecting a Comparison Group

36. Is there a proven track record of success for this benchmark? Are the results sustainable? Can the idea or practice be replicated in your context? Does it help you achieve your mission? From Benchmarking for Nonprofits: How to Measure, Manage, and Improve Performance by Jason Saul (Fieldstone Alliance Publishing Center) Guiding Principles for Best Practices

37. CIC (Council of Independent Colleges) Financial Indicators Tool (FIT) and Key Indicators Tool (KIT) Current Examples Used

38. Current Examples Used

39. Current Examples Used Institution Survey Most Critical Indicator Rankings Most frequently used measures from the APC project group's independent research how the category ranked (most critical to report) on the NACUBO performance measurement survey Selectivity Measures Enrollment Statistics Quality of Educational Experience

40. Current Examples Used

41. The Dark Side Measurement error Misinterpretation of data Incorrect definition of needs Make sure your report is designed for your institution rather than an a copy of someone else’s Over reliance on the numbers (you need supplemental data when questions arise Over reacting to the numbers

42. Are You Ready? Quick reality check questions: Are your board and top management satisfied with the information they currently receive? Do the board and top managers feel they need more meaningful measures of performance or mission effectiveness? Do the board and top management know what these measures should be? What kind of data is currently being compiled, and could it be used to address these needs? How difficult would it be to provide the data to fuel the desired dashboard measures?

43. Resources The Nonprofit Dashboard: A Tool for Tracking Progress by Lawrence M. Butler (Boardsource) Key Success Factors Track Health of the University of Miami, Mary M. Sapp, M. Lewis Temares and David Lieberman Performance Measurement Toolkit , NACUBO Using Performance Measurement to Improve Public and Nonprofit Programs: New Directions for Evaluation by Kathryn E. Newcomer (Jossey-Bass) Financial Planning and Evaluation for the Nonprofit Organization by Anthony J. Gambino and Thomas J. Reardon (National Association of Accountants) Benchmarking in Higher Education: Adapting Best Practices to Improve Quality by Jeffrey W. Alstete (Association for the Study of Higher Education Report no.5)

44. “ Governance is decision-making, and decisions can be no better than the quality of information available to inform them.” Preface to Strategic Indicators for Higher Education: Improving Performance by Barbara E. Taylor and William F. Massy Conclusion