The Impact of Performance-Based Funding on Historically Black Colleges and Universities

Abstract

More than half of the states in the U.S. fund public colleges and universities, based in part on those institutions meeting performance metrics. Given increasing political and public interest in accountability for public resources, it is likely more states will adopt incentive-based finance policies for postsecondary education. This chapter explores how performance-based funding has affected HBCUs in six states. It situates this analysis in the political context that foments and sustains interest in this finance mechanism. Through descriptive statistical analysis of HBCU achievement on key performance funding measures and interview responses with HBCU and higher education representatives, this chapter offers a more nuanced and comprehensive analysis of the outcomes of performance funding as it is applied to HBCUs.

Performance Funding and Historically Black Colleges and Universities: An Assessment of Financial Incentives and Baccalaureate Degree Production

“…Similar to other lower-resourced public institutions, many public HBCUs grapple with the capacity to achieve performance funding output goals (most often graduation and retention rates). Participants in Boland’s (2016) and Jones’s (2016) studies suggested that the issue of limited resources not only hampered administrative capabilities, but also negatively affected the student behaviors measured by the PF policy. While the policy based funding on an increase in retention and graduation rates, participants argued that they did not have the finances needed to improve these outcome metrics.…”

“…Qualitative research on public HBCU responses to performance funding demonstrates widespread HBCU skepticism of performance funding given historical inequities in state funding of HBCUs in comparison with non-HBCUs (Boland, 2016; Jones, 2016; Sav, 2010). As Jones (2016) illustrates in her multiple qualitative case study analysis of public HBCUs and performance funding, administrators at HBCUs believed that they were held to an unfair and unrealistic standard compared with their PWI counterparts due to characteristics of their institutions’ target student population.…”

“…As Jones (2016) illustrates in her multiple qualitative case study analysis of public HBCUs and performance funding, administrators at HBCUs believed that they were held to an unfair and unrealistic standard compared with their PWI counterparts due to characteristics of their institutions’ target student population. Public HBCUs also expressed distrust toward policymakers because representatives from their institutions were not present for the creation of PF policies (Boland, 2016; Jones, 2016). Several studies explain how, in many states, members of PWIs were included in such planning meetings, while public HBCUs were not represented.…”

“…Several studies explain how, in many states, members of PWIs were included in such planning meetings, while public HBCUs were not represented. Others noted that they were able to offer feedback on the policies only after their initial adoption (Boland, 2016; Jones, 2014, 2016).…”

“…The promise of performance-based funding is that it will encourage postsecondary education to satisfy such statewide priorities as degree attainment and economic competitiveness. The threat of performance-based funding is that it will hinder the ability of colleges dedicated to educating and graduating traditionally underserved students to fulfill this mission (Boland, 2016; Dougherty & Natow, 2015; Dougherty & Reddy, 2013; Jones, 2014; Tandberg & Hillman, 2014). The increasing popularity among state policymakers to adopt performance funding necessitates rigorous evaluations to determine its efficacy.…”