Budgeting Approaches to Achieve Strategic Sustainability

With a background in art history, Jill Blondin had no budgetary experience when she entered her first administrative role. But her knowledge of art history has actually helped her manage budgetary issues in her current role as associate vice provost for global initiatives at Virginia Commonwealth University (VCU).

“Art history is economics, math, history, political science, geography, and more—just like the international office,” she says. “Having come from a liberal arts background where I had to know so many different things helped me connect the budget with the needs of the office and the institution.”

That broad approach is essential, especially as many international offices have enjoyed greater autonomy over budgeting in recent years. At the same time, leaders faced difficult decisions during the COVID-19 pandemic, when mobility—and revenue—stopped abruptly. 

“You don’t have to be an accountant. You have to be a strategic thinker.” —Jill Blondin

And as all of higher education continues to build back after COVID-19 and navigate uncertain times, the need to think strategically about scarce resources for international education remains essential.

“It’s numbers, but it’s also a mindset,” Blondin says. “You don’t have to be an accountant. You have to be a strategic thinker.”

‘The Opportunity to Lead’

Many institutions have moved away from traditional budgeting approaches, where budgets are typically based on the previous year and adjustments are made for inflation, enrollment, and other factors. 

While more flexible and outcome-driven models such as responsibility center management, zero-based budgeting, and multiyear budgeting are emerging (see sidebar  below), the lingering effects of COVID-19 continue to batter institutions. Some have responded with fiscal “rigidity that limits innovation,” says George F. Kacenga, vice president of enrollment management at William Paterson University of New Jersey.

Budget Models

As higher education shifts its fiscal focus to more flexible and outcome-driven budgeting models, international offices typically follow their institution’s overall approach to budgeting and how departments and programs are allocated funds. Each provides an opportunity to think more strategically about programming and activities. 

“A lot of leadership has to happen in and through all these different models,” Kacenga says. Among the models:

Responsibility Center Management (RCM) 

In higher education, RCM decentralizes budget authority to departments or academic teams, each of which is responsible for managing revenues and expenses. 

Benefits: Increased autonomy. 
Drawbacks: Differing revenue streams within an international office can lead to disparities among units. “We didn’t want study abroad to be thought of as a revenue-generating center,” Kacenga says.

Performance-Based Budgeting 

To varying degrees, performance-based budgeting ties funding to meeting predetermined goals, as defined by measurable metrics or KPIs. Some states have implemented performance-based systems for their public colleges and universities, including most recently in the Texas community college system. 

Benefits: Connects budgeting to discrete goals that can be scaled over time.
Drawbacks: Selecting the right metrics to measure can be challenging.

Zero-Based Budgeting 

At its most basic level, every department starts every fiscal period with no funding and must justify both existing and new projects or activities.

Benefits: The process “requires thorough examination” of all activities, Kacenga says, encouraging efficiency and accountability.
Drawbacks: Time-consuming. Zero-based budgeting can also make organizations less agile if new opportunities present themselves in the middle of a budget cycle.

Multiyear Budgeting

Some organizations have dropped the annual budget in favor of three-year averages. 

Benefits: Greater stability, promotes longer-term strategic planning.
Drawbacks: Requires accurate long-term forecasting of enrollment or external revenue sources, which can be challenging at institutions where enrollment is volatile. 

International mobility and partnerships, always subject to global economics and geopolitics, can also complicate the financial outlook, particularly at institutions where greater autonomy is in place for international offices. 

“If there’s a deficit, they may be called on to close the deficit themselves with less help than before,” cautions Paulo Zagalo-Melo, associate provost for global education at Western Michigan University. 

Libby Claerbout knows this firsthand. While she was a senior international officer (SIO) at a small public institution, her priorities shifted with the region’s economy, and the funding for the international office “really scaled back to the essentials,” says Claerbout, now manager of academic programs for Semester at Sea. “The more institutional dollars were cut way back, the more we still had to figure out how we as a department could generate money to support services and faculty participation in short-term programs.” 

Despite these challenges, “the opportunity to lead is present, and budgeting success can be found by fostering a more strategic and results-oriented approach,” Kacenga says.

Strategic Shifts

In uncertain times, international education leaders must focus on sustainability, Zagalo-Melo argues. “If you build an image of financial stewardship, people will be more willing to partner and share resources with you,” he says. “You have to show the world how the plane flies—sometimes before it’s fully built. But that’s how aviation started.”

While “strategic budgeting” has been a buzzword for years, what’s changing is “budgeting from a medium- or long-term basis, which isn’t something international offices had to do a decade ago,” Zagalo-Melo says. “It’s really the need to look at the strategic plan, budget accordingly, and plan on resource management and cost-effectiveness over a five-to-10-year window rather than looking a year at a time.”

Here are strategies for this new reality suggested by international leaders:

Begin with the budget. 

Ensure you understand how your institution allocates resources and the mix of your office’s revenue sources, which typically include student fees, centralized budget allocations from the university, and other sources specific to the international office. 

“Good ideas are great, but they will not take you anywhere by themselves,” Zagalo-Melo says. “You need to nurture the resources and the environment that go with those ideas.”

If needed, get help by developing money-minded partnerships inside and outside the office. Larger international offices may have administrative staff devoted to the budget, but at all institutions it makes sense to foster relationships with central budget officials to understand the budgeting process. Peer networks—including NAFSA—and professional development opportunities focused on general strategic budgeting principles and international education are also helpful. 

“If you build an image of financial stewardship, people will be more willing to partner and share resources with you.” —Paulo Zagalo-Melo

For Blondin, becoming VCU’s interim SIO and grappling with budget issues in new ways “was a pretty vulnerable position,” she says. “But it was also a growth opportunity, and I knew the success of my office depended on understanding [effective budgeting].”

Sharpen strategic priorities. 

The importance of connecting international activities to overall institutional goals is well understood—and it can be easy when a college’s or university’s strategic plan explicitly stresses providing students with global perspectives and skills. At times, though, the connections may be more elusive. 

However, many institutional objectives focused around “transformative experiences”—such as experiential learning or intercultural agility—represent “an opportunity for the international office to attach itself,” Blondin says. And that’s just the beginning.

As Blondin contends, the international office is the one place “that touches every aspect of the institution: student affairs, the academic enterprise, research, compliance, every academic unit, HR [human resources]. You name it, we’re somehow involved.”

One way to surface these connections is to seek them out. Every semester, Kacenga gets a list of courses where 25 percent or more of the students are international so he can understand where their impact is greatest and identify potential avenues for collaboration and support. He also listens.

“If they’re talking a good game but the money isn’t there, that’s where the opportunity for leadership comes in.” —George Kacenga

“When I’m in other meetings on campus, I’m actively listening for what isn’t articulated in the plan—but how the presence of international students is mentioned in day-to-day conversations,” he says. 

But talk can be just that—talk. “Money will tell you where the priorities are for the institution,” Kacenga says. “If they’re talking a good game but the money isn’t there, that’s where the opportunity for leadership comes in.”

Consider all resources. 

Resource management involves not just the budget, but staff, skills, capabilities, and the potential for partners inside and outside the university to provide any or all of these resources. This is where a five-to-10-year approach to strategic planning pays off, according to Zagalo-Melo. 

“Time itself is a scarce resource,” he says. “If you plan on [longer] timelines, you can more easily come up with the resources you need at every point to deliver a certain outcome.”

Develop smarter metrics. 

Whether using them explicitly for key performance indicators (KPIs) in performance-based budgeting or for broader case making, it’s important to craft metrics with “situational awareness of what kind of campus you’re on,” Kacenga says. For example, institutions focused on international students as a revenue source will focus on enrollment metrics, while ones with a holistic approach to internationalization in their strategic objectives may respond to measures on outbound students or the diversification of the international student population.

“You have to come in open minded to where the leadership and the system is already and take stock,” Claerbout says. 

It’s also helpful to demonstrate connections to the campus as a whole, such as international students’ participation in activities and clubs and the international office’s ties to student affairs and programming. Often, the chief financial officer and other campus financial staffers can explain in greater detail the impact of international students on other areas of campus, such as residential and food services—information that’s useful to strengthen partnerships. 

“Every time we ask how something is going to impact students, we’re going to come up with the right answer.” —Jill Blondin

“You can be united in efforts to say you need three more residence hall directors and programming on cross-cultural experiences,” Kacenga says.

Above all, metrics should focus on student outcomes. “Every time we ask how something is going to impact students, we’re going to come up with the right answer,” Blondin says.

Make the tough calls. 

As is true throughout higher education, sometimes things are done because they’ve always been done. “But they always have outcomes,” Blondin says, and those outcomes should be measurable and evaluated. 

For example, do study abroad fairs on campus translate into larger numbers of outbound students? This mindset can help get past sunk costs and old approaches to ensure ongoing activities are aligned with strategic priorities.

“It’s human nature to have difficulties distinguishing between what is important and what is strategic,” Zagalo-Melo adds. “When we have to prioritize ideas, resources, and concepts—we try to include everything that is important.” 

Be entrepreneurial—even in budgeting. 

Armed with data, international office leaders can make unconventional proposals during the traditional budget process. “Say for the current budget, I can achieve these activities with these outcomes. But if I get more resources, I can accomplish these greater outcomes,” Kacenga says. “[Campus leaders] need to see it in terms of ROI [return on investment]. Give them three or four options and ask them what they want.”

Another tactic is to spend money to make money, to borrow an adage from the advertising field. For example, international offices can provide seed money to raise the profile of international programming. At VCU, the international office offers global learning and partnership development awards to faculty members to foster global collaborations. 

Examine fees—and get creative. 

One area where international offices may have autonomy is student fees, which should go to specific activities that the students charged will benefit from, according to Kacenga. That’s how Claerbout addressed funding gaps for the support of international students: adding a $100 fee to provide services. “It was well received, because we laid out the things we provided to our students,” she says.

Even so, the sensitivity around fees provides opportunities for negotiating. Not wanting to have fees from existing students go to recruiting new students, Kacenga asked leadership for a MOU in which a fractional amount of the tuition generated by international students would be allocated to support these activities. Another option is to allocate a small amount of an awarded scholarship or grant to the international office to improve operations in lieu of fees.

And where fees can’t cover all expenses, use them to provide small but significant benefits for students. VCU, for example, now offers free passport photos for faculty and students, which are funded by study abroad fees. “We don’t have the money to provide free passports for every student, but we can help get students abroad by providing this service,” Blondin says, noting that the initiative  also ties into a broader institutional value of providing a culture of care.

Train international office staff to be budget minded. 

Strategic budgeting “requires leadership from the SIO, but on the other hand, it also requires a group of people who understand its importance,” Zagalo-Melo says. “It requires the unit leaders to understand the financial sustainability of the office is more important than each of the units individually.”

Direct and indirect strategies can help support professional growth in this area. Resources like the business acumen section of NAFSA’s International Education Professional Competencies 2.0 can help outline skills and responsibilities to work toward. Kacenga suggests having team members construct zero-based budgets for the activities they oversee to learn how money flows in and out of them. Performance plans should be connected with measurable objectives like KPIs—and have the necessary budget to reach their goals, he adds. 

“It requires the unit leaders to understand the financial sustainability of the office is more important than each of the units individually.” —Paulo Zagalo-Melo

And leaders can constantly communicate the importance of strategic thinking. “The budget is not out there on its own but connected to what we’re doing,” Blondin says. “Everyone in your office needs to understand that.”

Don’t overlook advocacy. 

Sharing the impact of international experiences with campus stakeholders is “not always comfortable,” Blondin says, but it is essential. Kacenga suggests using tools like the questions and trends in the American Council on Education’s  Mapping Internationalization on U.S. Campuses survey as “talking points” in conversations across campus. They can also serve as a “litmus test” to better understand what matters at an institution and in what areas an improved understanding of internationalization is necessary, he says. 

Be patient. 

Patience is, in itself, a key element of strategic planning. “It took me 10 to 15 years to understand the role of the larger institution,” Kacenga says. “It’s important not to get frustrated. Change is slow and incremental.”

Claerbout agrees. When she first became SIO, she studied books on how to build international offices—which all stressed familiar themes that apply equally to strategic budgeting: identifying stakeholders, building awareness, developing cross-campus connections, and fostering consensus. 

“It really frustrated me, because it went against my get-it-done attitude, but I learned over the years that this is the best way to do it,” she says. “You have to have some sort of greater strategy, and that takes a long time. Otherwise, you’re going to be spinning your wheels.”  •