APPROVED Membership Contribution Model for ACDE

1 AFRICAN COUNCIL FOR DISTANCE EDUCATION (ACDE) APPROVED FINANCIAL SUSTAINABILITY MODEL FEBRUARY, 2016 INTRODUCTION The purpose of this document is to table scenario for a possible membership fee approach and model for ACDE; aimed at building a sustainable funding base for ACDE to move forward For a long time since its inception in January, 2004 the African Council for Distance Education, (ACDE) enjoyed the support of a major donor – the Ministry of Education of the Government of the Republic of South Africa In response to the current financial challenges faced by the ACDE, in particular the inability of the income of the Council to meet its obligations, the Executive Board of the ACDE resolved at the 22 nd Executive Board Meeting held in Lusaka, Zambia on 14 September 2013 to establish a five person task team to “develop a five year sustainability strategy for the ACDE” Attached as appendix is the report of the task team An earlier version of this report, attached as appendix 6, was tabled at the ACDE Executive Committee meeting in Baira Mozambique on 25 February 2015 The Executive Committee established a task team and directed them to interrogate the report and make further recommendations regarding revisions to the sustainability model with particular reference to the annual membership contributions of ACDE member institutions The task team was further requested to deliberate on other matters and strategies that could positively impact on the financial sustainability of the ACDE The following are the members of the committee: Dr Molapo Qhobela Molapo (Vice Principal, UNISA) Chairperson Prof Israel F Adu (Director, ACDE-QAAA, NOUN) Member Prof Elifas T Bisanda (Acting VC, OUT) Member Dr Musa Fadlalla Ali (Principal, OUS) Member Prof Rotimi Ogidan (Executice Director, ACDE) Secretariat Dr Kassimu A Nihuka (Director, ACDE-TCC, OUT) Secretary Dr Evaristo A Mtitu (Manager, VC’s Office, OUT) Member Prof Chrispine Chiwome (Research Fellow, ZOU) Member Prof Johnson Changeiywo (Contact Person, Egerton University) Member 10 Prof Alfandega Manjoro (CUM) Member 11 Mr Lino Samuel (CUM) Member 12 Ms Grace Muriuki (PS, ACDE) Secretariat Terms of Reference of the Task Team The following were the Terms of Reference (ToR) for the committee: to interrogate the ACDE financial sustainability model which was presented on 28 February, 2015 to the Executive Board at the catholic University of Mozambique in Beira with emphasis to the payments of annual institutional membership subscription using the principle of proportion of ODL students against the students in the conventional institutions to prepare a strategic plan on how funds realized from the payment of membership subscription would be utilized to review the ACDE Human Resources Policy document to deliberate on the payment of top up allowance for the ACDE secretariat staff particularly to ensure that it agrees with funding capability of the Council and to deliberate on other relevant strategies that would improve the financial sustainability of ACDE Currently, the ACDE’s programme and activities are funded by institutional membership fees, set at US$ 2000 per annum and individual membership fees set at US$ 100 per annum This income has proven to be insufficient and has necessitated individual institutions to make further voluntary contributions, which have allowed have enabled the ACDE to continue to function The latter is not sustainable nor desirable or appropriate in terms of good corporate governance THE NEED TO REVISE THE MEMBERSHIP FEE MODEL FOR ACDE To date, ACDE membership comprise 41 diverse institutions and 272 individual members It is important for sustainability that members demonstrate their commitment to the organisation in hard financial terms, as well as commitments of staff time and other resources Appendix is the list of current institutional members and their current annual institutional membership and voluntary contribution from 2011 to 2013 In developing a proposed model for membership fees, it is instructive to study the fee structure of other university associations It is noted that this comparison is challenging in that the table below does not reflect potential alternative income streams, the maturity of the various associations or the size of their membership base The table below sauced from the Southern African Regional Universities Association (SARUA) presents the position for some African and international organisations: Table 1: Illustrative range of membership fees of similar associations Association Basis of charging Association of African Universities (AAU) Inter-University Council for East Africa (IUCEA) Association of Commonwealth Universities (ACU) Size of institution (number of students) International Association of Universities (IAU) Type of institution/organization, student enrollment and the Gross National Product (GNP) of the country Higher Education South Africa (HESA) Southern African Regional Universities Association (SARUA) Size of Institutional Block Grant Size of institution HDI ranking of the country and income of the HEI Size of the institution and the GDP per capita in US $ In terms of table above, it can be noted that similar associations utilise different models for fee calculation, and some of these continental based associations are also facing challenges of financial sustainability THE MEMBERSHIP FEE MODEL TO SUPPORT THE ACDE STRATEGIC PLAN The current ACDE Strategic Plan, 201O to 2014 has expired It is imperative that the ACDE urgently initiates a process to develop a strategic plan for the period 2015 to 2020 This will ensure that the income generated from member institution can be used to deliver on the strategic plan Pending the finalisation of the Strategic Plan, the Task Team is proposing that the ACDE financial sustainability needs to ensure the following with regard to the ACDE over time:  Enhance the Continental Stature and Identity of ACDE and ODL institutions – enhancing a sense of a common identity and a shared approach to issues affecting ODL institutions and their growth on the Continent Deepening and broadening the knowledge base on the value and benefits ODL for Human Resource Development  Enhance Continental and Regional collaboration on ODL - promoting widespread debate and discussion on key issues, and facilitating collaboration and common purpose among and between universities, colleges and the ODL space  Enhance Leadership Capacity in ODL at ACDE Member Institutions - building appropriate leadership capacity at the individual, institutional and systemic levels, with a focus on responding to particular needs of ODL institutions  Advocate for a more receptive ODL policy environment - foregrounding the value and contribution of ODL in the overall development priorities of the Continent and supporting AU and RECs in the context of Agenda 2063 in terms of policy advice and support To minimise costs and improve the participation of ACDE member institutions in the affairs of the organisation; the following is also proposed:     ACDE membership fees must cover the minimum operational needs of the organization, which must include defined minimum services to members Donor and other philanthropic agencies are more likely to support an organization for dedicated projects if they know that the ACDE members financially support the operations of the organization; The ACDE as an organization must provide a minimum menu of services to paid up institutional members; That the staff of the ACDE secretariat are seconded from and paid for by the member institution and this is taken as part of their contribution; That the ACDE projects are funded from surplus funds after all operational costs have been met and from additional and separately sourced funds from donors or other benefactors In preparing its annual budget, it is also proposed that the ACDE should budget for at least a 2% surplus to enable the organization to build financial reserves In this regard, the following are proposed as minimum deliverables by the ACDE to paid-up member institutions:     Annual Vice Chancellor Forum – Convene a Vice Chancellor dialogue and networking forum every year to share experiences and discuss pertinent issues facing ODL institutions on the Continent and beyond; Capacity Development Workshops in identified areas such as Quality Assurance, Management Information and Strategic Planning Member institutions will be encouraged to provide the resource persons and venues for such meetings A quarterly Newsletter - Communication of issues facing ACDE member institutions and ODL issues generally Conducting Policy work and engagement with AU and RECs structures and Technical Committee to advance the interest of the ACDE and ODL in general FORMULATING THE MEMBERSHIP FEE MODEL It must also be recognised that ACDE has a very diverse membership base in terms of institutional size, as well as varying financial capabilities commensurate to the diversity of the African continent Appendix below is the list of African countries in term of GDP per capita for the period 2010 to 2013 Appendix also illustrates the diversity of African economies, with the majority of the 55 countries presenting a GDP per capita of less than US $ 3000 Only 17 countries have GDP per capita of US $ 5000 or higher These include Nigeria, Botswana, South Africa, Mauritius; from which ACDE currently has a significant number of members It is against this background that the ACDE that institutional membership fees be differentiated in the according to the size of the institution in terms of student headcount and the GDP per capita of their host country Similarly, it was noted that the current model of a flat institutional fee of US$ 000 per year was ideal as it did not consider the differential capacity of institutions to support the ACDE and neither would it assure the financial sustainability of the ACDE While it was recognised that it would have been ideal to use the actual income of member institutions and the active Full Time Equivalent (FTE) student enrolment; such data is not publically available for the majority of ACDE members However, the institutions student enrolment data and the country’s GDP per capita are publically available and are deemed good measures that recognise the diversity of ACDE members Table below shows the current, distribution of ACDE member institutions according to registered student headcount, while appendix illustrates the diversity of African economies, with the majority of the 55 countries presenting a GDP per capita of less than US $ 3000 Only 17 countries have GDP per capita of US $ 5000 or higher Table SIZE OF ACDE MEMBER INSTITUTION (BASED ON PUBLICALLY AVAILABLE STUDENT ENROLMENT DATA) Current number of member institutions 50000 Students The above data represents the diversity of 35 member institutions of the ACDE for which data was available As expected, the majority are large universities with a student enrolment of 20000 or higher It is a matter of concern that institutions were not willing to share their student enrolment data when requested It is proposed that the host countries of universities are distributed into five (5) bands in terms of their respective GDP per capita as per table below, which have been derived from the World Bank as per appendix Table GDP Per Capita Bands for African Member States GDP per capita in current USD Band Band Band Band Band >10,000 7001-10000 4001-7000 1201-4000 50,000 30,001-50,000 15,001-30000 8,001-15000 10,000 7001-10000 4001-7000 1201-4000 $5,000 Between $3000 and $5000