Revenue Inequalities across Public Universities in the Midwest: What Differentiates the Haves and the Have Nots?

There is a deepening divide between higher education institutions that can sustain themselves fiscally in the wake of declines in state funding and those institutions that are struggling to sustain needed revenues. This research analyzes changes in revenue patterns from 2000-2015 in Midwestern public four-year colleges and universities to the extent that revenue inequality contributes to a widening gap between well-resourced and less-resourced institutions. Revenue shifts that appear to be contributing to bifurcation between haves and have nots colleges and universities. The study applied quantitative descriptive analysis to Delta Cost Project revenue and institutional characteristic data. Data over a 16-year was analyzed to show changes in revenue patterns and institutional metrics associated with haves and have nots. Revenue data is adjusted for inflation to 2015 dollars using the Higher Education Cost Adjustment (HECA). Resource Dependency Theory (RDT) is the theoretical framework used for the analysis. RDT argues institutional behaviors are shaped by the drive to avoid overarching dependence on only one or two revenue sources because that gives the external funding sources undue influence over the organization's operations. As a result, organizations look to cultivate multiple revenue sources, an especially important strategy when state appropriations decline and are inconsistent. The study identified an increase in total operating revenue for most institutions. The study also confirmed the existence of revenue inequality. The findings describe changes in patterns of revenue influenced by changes in funding sources, economic conditions, and pursuits of prestige. They show a growing spread between well-resourced and under-resourced institutions. The results of this study have important implications for higher education policymakers, practitioners, and researchers. As state support for public four-year higher education wanes, institutions have sought alternative revenue sources. However, the degree to which institutions can find alternative revenue varies widely. The more constrained under-resourced institutions are more often regional comprehensive and HBCU institutions that serve more minority, low-income, and first-generation students. If state funding continues to decline, revenue inequality will negatively constrain institutions who have fewer alternative revenue sources. As the gap between haves and have nots increases many institutions may struggle to deliver their mission with the greatest impact felt by institutions serving more lower income and students of color. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]