August 1999 // Volume 37 // Number 4 // Commentary // 4COM1

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Implications of Increased Alternative Revenue for the Cooperative Extension System: Present and Future Strategies for Success

As the next century approaches, alternative funding sources will increasingly contribute to a diversified portfolio of resources for the Cooperative Extension System. The Personnel and Organizational Development Committee (PODC), of ECOP (Extension Committee on Organization and Policy), has identified several issues associated with alternative revenue acquisition and use and suggests guiding principles and associated strategies to address the major personnel and organizational development implications.

Judith Ann Barth
Coordinator, Human Resources
Colorado State University Cooperative Extension
Ft. Collins, Colorado
Internet address:

Barry W. Stryker
Assistant Director
University of Vermont Extension System
Burlington, Vermont
Internet address:

Larry R. Arrington
Associate Dean
Florida Cooperative Extension Service
Gainesville, Florida
Internet address:

Syraj Syed
Graduate Assistant
Florida Cooperative Extension Service
Gainesville, Florida

Alternative revenue is defined by the Personnel and Organizational Development Committee (PODC) of the Extension Committee on Organization and Policy (ECOP) as funds that are not directly appropriated to the Cooperative Extension System (CES) or research units by federal, state, or local governments. In 1987, the Futures Task Force raised several questions about alternative funding and offered suggestions regarding funding methods, such as grants, subcontracting with external agencies, and user fees. As is often the case with resource development, the suggestions made by the Futures Task Force also resulted in the identification of numerous problems:

Grant funding poses the problem of relinquishing control of program content to the funding source.

Subcontracting raises questions about authority. Which agency will have authority? Who will maintain controlling interest?

User fees prompt concern that those with the greatest need will not have the financial resources to access the information necessary to address those needs. User fees will place a financial barrier between Cooperative Extension and the target audience.

In 1994 and 1995, a report prepared for ECOP and Cooperative State Research, Education, and Extension Service (CSREES) titled "Framing the Future: Strategic Framework for a System of Partnerships" listed broadening resource acquisition' as a major issue for CES. Specifically, the report called for the system to "...continue to build partnerships with state and local agencies and private (including non-profit) organizations that result in the allocation of funds to Extension for educational components of collaborative programs, and to develop strategies for contracting and collecting appropriate user fees as additional revenue sources."

In 1997, several components were added to the growing debate on alternative funding for CES. Senator Richard Luger, on behalf of the land-grant system, posed the questions, "Who are the primary users and beneficiaries of the Extension Service? Should consideration be given for user fees to be charged for these services?"

A Program Resource Ad Hoc Committee, established by ECOP, identified several reasons why Cooperative Extension may need to seek additional funding:

Federal funding through USDA has not kept up with inflation over the past several years.

The CES mission extends beyond the USDA/CSREES core vision into areas of community-based needs, which may exist outside the parameters of agriculture and land-grant issues.

CES is a point of access for many other agencies that want to tap into the pulse of a community.

Today's communities and society face issues that require collaborative effort and attention. CES may enhance its potential impact and effect on a community through these collaborations.

Thus, a strong need for a dialogue on alternative funding is necessary. As our society approaches the next century, CES must consider its potential to achieve and maintain a diversified portfolio of additional funding.

Since 1996, PODC explored the implications of increased alternative revenue in CES. This article suggests a set of guiding principles for an expanding portfolio of alternative funding sources. Decisions on alternative funding also must be made in accordance with appropriate local, state, and federal guidelines. The guiding principles in this article are not intended to supersede any already existing state policies and procedures.

In addressing the various issues associated with alternative revenues, it is important that the Extension System operate from a solid philosophical base. The following guiding principles represent fundamental values that form the basis for obtaining and managing alternative revenue:

1. Mission driven program The resource acquisition advances the mission of Cooperative Extension. The funded program has been identified as a priority for the system, state, or county.
2. Appropriate sources Funds acquisition is ethical and legal and does not compromise the integrity of the organization. Alternative revenue sources are evaluated to determine their appropriateness.
3. Appropriate uses Alternative revenues will enhance and/or expand the educational outreach of Cooperative Extension programs.
4. Public good vs. individual advancement Alternative revenues promote societal good rather than the individual advancement of the principal investigator.
5. Responsibility of all staff Resource identification and acquisition in support of priority issues is the responsibility of all professionals within CES.
6. Efficiency and effectiveness R The cost/benefit ratio of programs funded with alternative revenue consider the total cost of programming, including system support.
7. Teamwork vs. entrepreneurial success Entrepreneurial success does not override the emphasis on teamwork and interdisciplinary efforts to address key issues.
8. Fairness in performance appraisals RThe system acknowledges that not all efforts made to acquire additional resources are successful. Personnel appraisals are based on solid needs assessment, program planning, resource identification, implementation, and evaluation, rather than on the success or failure of individual efforts to acquire resources.
9. Flexible employment arrangements R The system recognizes the need for employment flexibility that often is required by alternative revenue funded programs. Flexibility is accomplished through the use of non-traditional employment models such as part-time, short-term, non-tenured, and contract employees, etc.
10. Comparable and equitable pay R The system supports comparable/ equitable pay for all faculty and staff regardless of the source of salary and support funds. The system also considers how market forces may affect final compensation.
11. Incentives: RIncentives to encourage attempts to secure potential alternative funding are appropriate, equitable, and consistent with state policies.
12. Planning for the end of funding RProjects funded with alternative revenues often exist within specific parameters and do not continue indefinitely. Plans are in place to make timely decisions regarding the priority of the project and whether to continue that project through on-going (institutional)funding.
13. Access: RCooperative Extension programs are open to all persons regardless of each individual's ability to pay. The source of program funding does not change this availability.
14. Commitment: RKnowledge of, and commitment to, these principles permeate the system at all levels (federal, state, and local).

Late in 1996, PODC conducted a survey of faculty and staff in selected states. Entitled "A Pulse Survey On Alternative Revenue Issues," the effort was designed to measure the reaction of the system to an apparent increase in alternative revenue sources, to determine issues raised by such increases, and to identify strategies used to deal with those issues. A similar survey was conducted in April 1997 with participants from two workshops at the CSREES administrative officers meeting.

The surveys identified three major categories of issues associated with alternative funding:

  1. Program and Mission
    Survey respondents clearly indicated that the diversification of funding sources could influence the program, mission, and focus of Cooperative Extension.
  2. Human Resources
    Because alternative revenue generation or management has not traditionally been included within Extension job descriptions, increases in alternative funding pose challenges for current employees.
  3. Accountability
    Outside investors place additional and different accountability demands upon the system.

Through these surveys, PODC identified several strategies that help minimize any negative effects alternative revenue may have on CES. The following strategies were suggested:

  1. Program and Mission

    Identify and focus efforts on priority programs to avoid an influence on the mission by the acceptance of alternative funding.

    Identify priority programs in order to shift perspective and energy from non-priority programming.

    Involve local boards/committees in the identification of program priorities and discussions on alternative revenue.

    Keep the system apprised of priorities.

    Have team leaders and supervisors periodically assess productivity and focus to ensure a balance of time and energy.

  2. Human Resources

    Clearly state responsibilities to acquire and manage alternative revenue in new faculty position descriptions.

    Revise existing position descriptions to include these responsibilities.

    Make new and existing faculty aware of the system priorities regarding alternative revenue.

    Have new hires participate in an orientation to learn about the acquisition and use of alternative revenue.

    Develop strategies to establish faculty and system benefits when appropriate alternative revenue sources are acquired.

    Provide opportunities for faculty to align themselves with system focus.

    Have supervisors discuss alternative revenue acquisition during annual performance evaluations.

    Incorporate expectations for the acquisition and management of alternative revenue into annual plans of work.

    Have program directors and supervisors encourage the acquisition and management of alternative revenue in support of a shift in organizational culture and attitudes.

    Use leadership modeling, performance rewards (including appropriate risks taken), and program sharing through internal and external media to further encourage a shift in organizational culture and attitudes.

    Provide staff with training and mentoring programs in grantsmanship, proposal development and writing, and institutional policies, procedures, and ethics.

    Include support for professional development activities for project staff when grants and contracts are developed (at a level consistent with organizational expectations, policies, and guidelines for comparable faculty and staff).

    Focus on a clear identification of the roles and responsibilities of all internal and external collaborators.

  3. Accountability

    Ensure that all fiscal and human resource staff are aware of the organization's goals for the acquisition and management of alternative revenue.

    Have staff members participate in training sessions, serve as trainers when appropriate, participate in problem-solving sessions, and provide consultation about the development of policies and procedures.

    Develop collaborative relationships with all institutional development offices.

    Update all policy and procedure manuals to include language on alternative revenue acquisition.

    Become familiar with federal, state, and institutional conflict of interest and ethics policies, and build relationships with the appropriate offices to interpret situations and circumstances.

    Develop internal review mechanisms for pre-proposal and proposal development.

    Provide computerized worksheets for the analysis of the total costs of programs and services.

    Identify recoverable costs, costs subject to limitations, and a process/formula for basing fees on the analysis.

    Provide support and training for faculty so they have the ability to determine market-rate prices relative to Extension cost recovery.

    Develop and conduct award briefings that include Extension and institutional policies for new principal investigators.

    Provide staffing assignments to separate the receipt of funds from the expenditure of funds and the acceptance of goods and services in alignment with state or institutional policies.

    Regularly review procedures to eliminate unnecessary policies and procedures without impacting appropriate controls and oversight.

    Involve all affected faculty and staff at the outset to assure appropriate and timely funds management.

    Provide a grantsmanship "tool kit" that includes policies, procedures, and basic information, as well as the name of an Extension contact person for grants and contracts information.

    Review proposals for grants, contracts, user fees, and other alternative revenue in order to determine the extent of the need for faculty support.

    Have all staff, including support staff, who work on the proposal stage of a grant or contract individually sign off on the finished product.

    Consider all resources, including total real-dollar costs, indirect costs, time, support staff, etc., necessary to accomplish grant requirements and associated tasks when determining the appropriateness of alternative funding. If grant funding is insufficient, faculty and staff should re-evaluate the appropriateness of accepting/pursuing the grant.

There is no doubt that as changes occur in public sector support for higher education, including Cooperative Extension, an increased commitment to alternative revenue will be required. Extension must embark upon a new era in resource development--a system-wide endeavor that enlists the efforts of all faculty and staff. This effort will have a formidable impact on Cooperative Extension, as the system builds an expanded alternative revenue base.

Extension programs reach countless citizens on an annual basis. People young and old benefit from timely and practical applications of the latest research results. Alternative revenue will help expand Extension programs to successfully address the critical and often complex issues confronting citizens.

The guiding principles outlined in this article are intended to provide a basis from which Extension faculty may approach the growing need for alternative funding and some of the potential problems associated with such funds.

For more information on this topic, refer to the PODC report by this same name distributed to all Extension Directors. The report will soon be available on the NASULGC web site: