Projections from 2015
The University’s marketing campaign was initially approved in 2015 as a three-year pilot project involving an investment of approximately $12 million. Part of the funding was to come from the University’s central reserves ($5 million), and part from donations ($2.3 million), while the rest would be recouped from new tuition revenues resulting from a projected increase in undergraduate enrolment.
Enrolment targets presented to UNB Senates by the Vice-President Advancement in October 2015 were aggressive, as illustrated by the chart from the University’s 2016-17 Financial Outlook (p3) displayed at the Town Hall on University Finances in February 2016:
The Vice-President Advancement also presented a detailed financial model to the Board in May 2015 and to Senates in October 2015. According to this model, the marketing campaign was projected to have a positive net impact on the University’s operating account in 2017-18 and to start recovering its annual costs by 2018-19; from 2019-20 onward, continued investment in marketing would generate tuition revenues large enough for the campaign to be sustainable as an ongoing operating expense of $3.5 million per year and still leave a comfortable positive balance.
These calculations seemed all the more striking for the fact that they assumed a 0% increase in tuition fees in the eight-year period from 2015-16 to 2022-23.
Criteria for continued funding were stated clearly at the outset. In an email to academic staff on 10 June 2015 with the subject line “Building for the Future”, the UNB President announced the campaign, then called Why UNB, and stated,
We will be closely monitoring its effectiveness in attracting students […]. We have established a target for this investment in our future: 1,000 new domestic undergraduate students by 2019-20. Meeting this goal will allow us to not only recoup but sustain our investments in this area, all with the goal of building a better UNB.
Reporting and Oversight
For the past three years there has been widespread concern about this campaign and decisions related to it among AUNBT members. In particular, questions were raised about who would monitor the investment and its effectiveness at achieving the stated targets and how funding the campaign would relate to other budget processes at UNB.
In response to growing concerns, in March 2016 a joint committee with representatives from UNB Senates and the Board was formed (pursuant to Section 43(3) of the UNB Act) to oversee the campaign, assess its effectiveness, and advise on whether continued funding is warranted and at what level. The committee’s terms of reference included a requirement of annual reporting to Senates and the Board.
As of this writing, in November 2018, only one such report has been presented to Senates: in May 2016. It did not address concerns expressed.
In March 2018, as the three-year pilot project was due for a final assessment and possible renewal, Fredericton Senate requested that the joint committee report its findings. President Campbell indicated that the committee would report to Senates and the Board in April 2018, before the 2018-19 University budget was to be presented to the Board for approval.
UNB Senates were not provided an opportunity to discuss the joint committee’s assessment of the campaign’s effectiveness. Ongoing funding from University operations for the marketing campaign was approved by the Board of Governors in April 2018, at the rate of $3 million per year for the foreseeable future.
Despite lack of regular reporting to UNB Senates, there have been signals that the marketing campaign might become a significant ongoing expense funded from operations starting in 2018-19. Senior Administrators suggested that the campaign was “working” and that “it would be foolish not to continue”, although no evidence was made available to support these claims. Perhaps more problematically, there were assertions that criteria of success had somehow “evolved” and that initially stated aggressive enrolment targets were in effect no longer relevant.
AUNBT’s position is that the campaign should be assessed based on the criteria presented to the University community when the pilot project was approved: it was meant to have a substantial positive effect on undergraduate enrolment, with clearly stated targets.
Enrolment data for Fall 2018 were reported to Senates by the Registrar in October 2018, and it is now possible to compare actual results to projections presented to Senates by the Vice-President Advancement in October 2015.
The following charts illustrate the results of the three-year campaign by comparing its projections (green) with actual enrolments (red) and with enrolment projections from the University’s budget documents (blue). Enrolment projections in the 2016-17 budget in effect gave a range: Registrar’s projections as the lower end, and an adjustment by the Why UNB “stretch target” (a target difficult to achieve) for that year. This range is represented by the shaded blue area in our charts.
To begin our summary on a positive note, there has been an increase by 135 FTE domestic undergraduate students in Fall 2018 relative to Fall 2015 baseline—although that is just 15% of the targeted increase of 884 FTE in 2018-19:
This modest achievement is offset by a decline in international undergraduate enrolment (explained in the 2017-18 Consolidated Budget by Saudia Arabia’s restriction of financial assistance to students studying abroad” [p29]). International undergraduate enrolment dropped by 200 FTE in Fall 2018 relative to the Fall 2015 baseline:
The overall result of UNB’s ca. $11 million investment in marketing, funded from the University’s central reserves, appears to be a decrease by 65 FTEs in Fall 2018 undergraduate enrolment (domestic and international combined) relative to the Fall 2015 baseline:
It is of note that the University’s budget projected a sharp decline in domestic undergraduate FTEs in 2016-17 (adjusted by the “Why UNB stretch target”). The 2017-18 Consolidated Budget does not attribute this to overly conservative assumptions. Instead, it states that the marketing campaign “is considered a key factor in 2016 domestic undergraduate enrolments exceeding budgeted levels” (p29). A projected sharp decline in enrolments for 2016-17 thus appears to have been cited a year later as evidence of the campaign’s success in “exceeding budgeted levels” of enrolment.
The marketing campaign projections of domestic undergraduate enrolments were on average higher by ca. 540 FTEs per year than actual results. Using tuition rates from the financial model presented to Senates in October 2015 (ca. $6,200 per year), it could be argued that the campaign has resulted in a $3.3 million ($6,200 x 540) average annual “deficit” in tuition revenues compared to marketing projections—a total negative variance of approximately $10 million over three years.
These are the outcomes of an $11 million disbursement from the University’s internally restricted reserves. By the criteria stated at the outset—1000 new domestic undergraduate students—the marketing project has not been successful.
The question arises of how the Senior Administration and the Board could justify the continued and indeed ongoing funding of an expensive marketing project in light of the poor record of return on investment during its pilot phase.
Ongoing Funding From Operations
The University’s proposal formulates an expectation of ongoing funding for marketing from UNB operations: “we expect the 2018-19 Budget to commit $1.5 million to ongoing sustainability of our modern day marketing and communications offices”. The reasons stated are of a general nature:
we must invest in a modern marketing office to strengthen our brand, positioning, and marketing tools, a communications office to proactively tell our story […] Prior to the Why UNB? Research project [sic], UNB did not have a modern day marketing office or communications office. […] While we are still below the national average for number of staff in our marketing office, we have a professional, well-trained, highly-effective marketing team in place; however, all but two of the positions are on ‘soft’ money — meaning, they are renewed year-to-year using one-time money.
This raises the question of whether the Senior Administration may have been less concerned with the actual results of its Why UNB? “research project” than with the objective of creating a modern marketing office comparable in size to the national average.
The circumstances raise a further question: if establishing such an office, funded on an ongoing basis from the University’s operations, had been a goal in itself—one which transcends consideration of targets and performance indicators presented as a “pro forma” to Senates and the Board in 2015—why was this objective not stated from the outset?
UNB’s proposal to the Government of New Brunswick appears also to comment on concerns that have been raised by the academic community regarding decisions on allocation of funds to marketing while Faculties, the primary units carrying out the University’s core academic mission, have been facing repeated budget cuts—and are anticipating another budget reduction in 2019-20. These concerns are dismissed in the proposal:
UNB’s recent investments in marketing, communications, and recruitment have been controversial with some members of our UNB community as faculties and departments have faced 10+ years of annual budget cuts. […] Our stance, however, has been that to invest in faculty members without first investing in efforts to ensure they have students to teach would be folly.
While this stance is not new to UNB’s academic staff, it is surprising to see it formulated with such candor in an official document submitted to the government.
The document further states, “we made those investments using internally restricted one-time funds, which we cannot use to make a 25+ year commitment to hiring tenure track faculty.” This argument became obsolete a month after it had been submitted to the Department of Post-Secondary Education, Training and Labour: $3 million in ongoing funding for marketing from the University’s operations was approved by the Board in April 2018.
Management is about choices. A management choice was made to fund marketing at the rate of $3 million per year for the foreseeable future, and to continue a “10+ years” long tradition of annual budget reductions to academic units.
Another budget cut of ca. $2.6-$3.2 million is anticipated for 2019-20.
(22 November 2018)