Performance funding or outcomes-based funding is a connection between the allocation of resources and the achievement of certain desired outcomes. The purpose behind linking funding to performance goals is to provide colleges with stronger incentives to improve educational outputs, build collaborative higher education policy environments, and ultimately become more accountable.

The MUS is engaged in the process of developing and implementing a performance funding model for three primary reasons:

  1. To support of a completion agenda aimed at increasing the number of college completers in the MUS and helping to achieve a national goal (as well as a state goal identified by the Governor) of increasing the percentage of the population with a higher education credential from 40% to 60%.
  2. To help facilitate the passage and approval of the College Affordability Plan in the 2013 Legislative Session, an agreement between the MUS and Governor to implement a resident-student tuition freeze for the 2013-14 and 2014-15 academic years if certain funding levels were provided for by the Montana Legislature. (link to CAP addendum).  Note: while the Legislature has the authority to appropriate funds to the MUS, the Board of Regents has sole authority for how those funds will be allocated to the campuses.
  3. To make progress on a long-standing strategic initiative of the Board of Regents; in order to increase the overall educational attainment of Montanans and provide an efficient and effective system of higher education, the Board of Regents adopted a Success Agenda to augment the Strategic Plan and help guide the Montana University System.

The MUS has split the Performance Funding initiative into two phases: Phase 1, a short-term pilot phase directed at the allocation of performance funds specifically for FY 2015, and Phase 2, a larger effort aimed at developing a performance funding model to be used on a longer-term basis that also takes into consideration the unique missions of the institutions.

In order to help facilitate this effort, the Commissioner of Higher Education appointed a Performance Funding Steering Committee to help provide oversight and direction.

The PFSC members constitute a diverse set of campus leaders representing major functional areas within the MUS (academics, finance, student services, institutional research), as well as provide representation from each institution throughout the System.   

In Phase 1, the pilot phase, 5% of FY 2015 state appropriations (or $7.5M) will be allocated based on performance.  The metrics in this performance model will be measured in early 2014 and performance funding allocations applied to operating budgets for the 2014-15 academic year.

The amount of performance funding attached to a longer-term model is yet to be determined.

The Phase 1 model was developed in the spring 2013 and approved by the Board of Regents at their May meeting.  Follow the link above to the full report, recommendations, and model.

The plan is to create subgroups by campus type (2-year, 4-year, and 4-year doctoral) that will work to develop metrics that relate to the various missions of institutions throughout the MUS.  Subgroups will be provided a basic menu of metrics (with longitudinal data provided for each metric) that will serve as a starting point for discussions.  It is anticipated that we will adopt a few metrics within each of the following categories: system-wide metrics, institutional-type metrics, and institution-specific metrics.

One of the primary goals of the longer-term (Phase 2) process is to increase faculty and staff engagement in the effort to create a performance funding model.  The following are some of the ways faculty and staff can get involved in this effort:

  1. join the online forum discussion;
  2. participate in campus focus groups;
  3. respond to surveys;
  4. join a steering committee sub-group; and/or
  5. contact a steering committee member directly to provide advice/suggestions or ask follow-up questions on how to get involved.