Too many mouths to feed
The student government of Carnegie Mellon University distributes nearly $1 million per year in student money. Of course, when there’s less than enough money to go around, some organizations’ members are bound to end up unsatisfied. But there’s good reason to be genuinely disappointed, even angry, about the way student government doles out the dough.
Money is distributed by an organization called the Joint Funding Committee (JFC). The committee is composed of representatives from the Undergraduate Student Senate and the Graduate Student Assembly (GSA). All organizations requesting money have to submit a budget detailing the amount of and reason for each proposed expense and a projection for each proposed revenue. The JFC then trims the budgets where they see fit. Organizations have a chance to appeal the JFC’s recommendations, and then recommended budgets are sent to Senate and GSA for approval.
It’s an arduous and thankless job. The members of the JFC give hour after hour trying to do what’s best for the student body. Their work is invaluable. But no matter how dedicated they are, their recommendations will be inherently flawed until they solve a number of systemic problems that cripple their work.
Problem: Thy will be not done
The most significant problem affecting the JFC is having — or at least taking into consideration — far too little information.
Around 8500 students pay the $82- per-semester student activity fee, yielding $1.4 million each year. Of that, just shy of $1 million is directed to more than 125 student organizations via the JFC. But the JFC has no mechanism for making an accurate assessment of what the student body wants.
In theory, student money would be allocated so that students would end up with as much utility as possible. Naturally, different students want different things, and that’s why JFC has to figure out how much to give each organization. There’s one major problem: JFC has no idea what students want.
Recommendation: Research rather than assumptions
The JFC must do empirical research or fund a group to do it for them. They need to know what sorts of groups, activities, projects, and events students value. The Tartan recently completed a pilot study to examine this very issue. Our study suggests that the JFC’s assumptions about what students value may have resulted in a misallocation of tens of thousands of dollars last year. Directing as little as $1000 toward thoughtful surveying of the student body could minimize such errors.
For example, the 46 randomly selected students who responded to The Tartan’s survey indicated they felt strongly that more money should go to community service organizations and intellectual organizations — such as the business associations, AB Lectures, AB Political Speakers, and the astronomy club. On the other hand, respondents said they would allocate significantly less money to Carnival and Sweepstakes-related activities. The results of the pilot survey showed a number of other potential misalignments between what students value and where their money goes. Read the full survey results (PDF, 500KB).
If nothing else, the results of our initial study suggest that it would be valuable to invest sufficient resources into learning more about what the student body truly values. Instituting an annual survey, with the appropriate design, implementation, and statistical analysis, would most effectively accomplish this goal.
Problem: Tunnel vision
JFC does not take into account how much money goes toward different types of activities — at least, not in a meaningful way. But as caretakers of the students’ money, JFC members need to look at the bigger picture, and not just allocate money based on historical investments and “that’s the way things are done” mentalities.
Recommendation: Macro-analysis of budgeting
For the JFC to have a sense of how they’re allocating money overall, their budget tracking information system — which is already a vast improvement over the spreadsheets of the past — should keep growing to serve them better.
First, groups need to be better categorized. As it stands, student organizations determine their own category, but many end up filed arbitrarily. Also, a group’s specific line items in one expense — like AB Concerts and AB Comedy’s Spring Carnival expenses — should all be attributed to a different category than the parent organization.
Proper grouping will allow the information system to quickly calculate how much the JFC intends to allocate to each category of student organization. For example, it would have shown that arts organizations, such as The Frame, Scotch ’n’ Soda, and The Originals, were granted 4.55 percent of the overall 2005–2006 budget, but the same organizations are slated to receive 5.48 percent of the 2006–2007 budget. The JFC could also see if their cuts are evenly distributed across the categories or if they’ve cut budgets of certain sizes more severely than budgets of other sizes, as was the case during last year’s funding process.
The ability to quickly assess the overall status of their allocations will give the JFC greater insight into how their allocations will shape the overall experience of the student body.
Problem: No evaluation of budgeting quality or program effectiveness
As it stands, JFC over-allocates to many organizations. Groups get greedy and ask for more money than they have the time or initiative to spend. Tens of thousands of dollars go unspent each year.
Amazingly, funding decisions are made without regard for how well organizations used their money in the past. That is, JFC does not perform any assessment of how well the organization used its money the year before or the year before that. An organization that spends only $500 of the $1500 it requested can request $1500 again and the JFC wouldn’t notice.
If all the unspent money — sometimes as much as $50,000 in a single year — were properly allocated, it could alleviate the dissatisfaction of many groups who genuinely would have made good use of more money.
Recommendation: Consider where the money goes
The JFC can easily request copies of every returning organization’s finances and compare — even if only on a cursory level — the amount budgeted and the amount actually spent on various items. This is something that the JFC can implement without any changes. All this information is available to them through the Office of Student Activities.
But in reality, even that is insufficient. The onus should be on the requesting groups to prove that they use the students’ money well. All groups should be required to submit the equivalent of Form 990, which not-for-profit organizations must submit to the IRS each year to maintain their tax-exempt status. (For instance, you can see University President Jared Cohon’s exact six-figure salary in Carnegie Mellon University’s Form 990 at www.guidestar.org.) A similar form for student organizations would require the groups to report important information about their financial activity of the previous year; for example:
• a statement of income detailed by JFC’s subsidy, grants, membership dues, donations (potentially including donated labor), and program fees;
• a statement of expenses categorized as relating to program services, management or overhead, fundraising, or payments to affiliates. Each of these categories should be further divided into categories such as salaries, office supplies, travel, etc.;
• a statement of program service accomplishments noting the most important activities undertaken by the organization, including a description of each program or service and an estimate of the scope of the program or service’s effect (e.g., the number of people who attended a lecture);
• a statement of the value and status of capital equipment, which would be especially useful for larger groups.
Making student organizations accountable in this way would give the JFC a means by which to evaluate the performance of each organization. It would help them perform a budget variance analysis, an assessment of the difference between what a group requested and what the group actually spent. Variance analyses could guide the JFC in accurately allocating the right amounts to the right organizations.
By assessing the finances of the various student organizations, the JFC will also be able to identify which organizations make the best use of student money. By using financial metrics such as fundraising efficiency and program service-to-overhead ratios, the JFC could know precisely which groups get the most out of the dollars they spend — something they should take into consideration as they allocate.
Even more importantly, requiring student organizations to report their financial activity would force them to be more aware of their finances, and it would give them a way to measure their success and set meaningful goals for improving the way they use money in the future. For example, the Rowing Club, which is able to generate an astonishing $90,000 or more per year, could quantify the cost-effectiveness of their fundraising initiatives to help get even better year-to-year.
Timing is a challenge on this front. Budgets for the next fiscal year are evaluated before the end of the current fiscal year. However, most groups will have completed the majority of their funded activities in time for the appeals process. Furthermore, the JFC should be looking at the data from as many previous years as is relevant and helpful.
Problem: The end is not near
The Tartan has been a part of this University for 100 years, and we plan to be here for another hundred. In fact, most organizations on campus will be around for many years to come. But the funding process stymies efforts to plan more than one year in advance.
There are a number of organizations that rely on expensive equipment — from radio broadcast antennas to oscilloscopes to high-end Web servers — to perform their functions. While the largest purchases can be financed with the help of the dean of Student Affairs, other large purchases should be anticipated and planned. By planning ahead, the financial impact of major purchases can be distributed evenly over the years, so the budgets of other groups, especially the smaller ones, are not affected by a sudden influx of requests for big puchases.
Planning to replace such aging equipment is especially important. When expensive equipment fails during the year without money allocated to replace it, the special allocations budget takes a hit.
Recommendation: Encourage large groups to plan for the future
All organizations that rely on capital equipment such as computer systems, lab equipment, machine tools, and should plan to replace and upgrade that equipment years in advance. Furthermore, organizations that develop plans for replacing systems that become outdated at a predictable rate — such as computer systems — should create memoranda of understanding with the Joint Funding Committee in order to improve consistency year to year. This will make the funding process more predictable and minimize sharp increases in organizations’ demands.
Problem: Equal representation
Each student organization is given a “JFC representative” who learns about the organization’s needs in order to advocate on their behalf. Each member of the committee is assigned to a certain number of groups. This is a great way to ensure that members of the Joint Funding Committee are informed about the unique needs of each group.
Some groups’ representatives, however, can’t speak on their groups’ behalf. That’s because the chair of the committee — who remains a neutral moderator of the proceedings — is the representative of some groups. Furthermore, the JFC chairs tend to be so overextended that they do not have the time it takes to adequately familiarize themselves with the organizations they represent.
Recommendation: The chair should not represent groups
Plain and simple: The chair of the JFC should not represent any student organization. Each organization deserves to have an advocate, and a neutral chair is unable to fill that role.
Problem: Professional conduct is lacking
The importance and seriousness of the budgeting process should be reflected in the behavior of the JFC’s members. If student organization members are to take the process seriously, they must be respected. One would expect that a group of adults charged with the management responsibilities of a million dollars would be able to conduct themselves in a professional manner. But not all of them do.
The Tartan has it from sources and has witnessed a certain member of this year’s JFC treating organizations’ representatives with disrespect and condescension. Members of JFC have also made disrespectful jokes this year and last.
Recommendation: Set clear expectations
Whether it involves adopting a code of conduct or simply discussing the behavior expected of committee members during training, the leadership of each year’s committee must take responsibility for the conduct of the committee by making the expectations clear to all members. The chair of the committee should not tolerate inappropriate jokes and disrespectful conduct.
The JFC’s work seems endless, so we understand that finding time to improve their methods is difficult. We hope these recommendations help student government improve itself more easily, so they are better able to serve the students they represent.