Mutual Benefits

Institutions that collaborate on services have lots to gain, from financial benefits to improved student services.

This content originally appeared in the July/August 2017 issue of Business Officer Magazine, by Sandra R. Sabo

Looking to reduce operating costs during a severe economic downturn, four higher education institutions in Atlanta decided to capitalize on their geographic proximity. They formed a consortium and built a central power plant that produces electricity and steam for all the member institutions, as well as providing heating and cooling.
The year was 1930. And 87 years later, the Atlanta University Center Consortium (AUCC) and its now-modernized power plant are still going strong. Over time, AUCC has weathered a few membership changes—including the merger of two of its founding institutions—and expanded its shared operations by, among other initiatives, building the Robert W. Woodruff Library to serve all students and faculty within the consortium.
“The consortium started with the understanding that the institutions could do some things better as a group than as individual institutions,” recounts Robert D. (Danny) Flanigan, vice president of business and financial affairs for Spelman College, one of AUCC’s founders. “For example, if Spelman had to buy all of its power from utility companies in Georgia, we’d spend about twice what we pay now for the power plant, even with the debt service and overhead that go with it.” Similarly, he says, Spelman’s library spending would probably double without a shared facility.
Given the unrelenting financial pressures under which colleges and universities now operate, shared efforts to produce such savings are likely to proliferate. Equally important to most institutions, particularly smaller colleges, is improving student services.
Traditionally, geography has provided the starting point for collaboration within higher education; consortia often comprise institutions located in the same city, state, or region. That’s changing, however, as evidenced by geographically diverse consortia such as HESS, whose 85 member institutions cover 15 states, ranging from Oregon to Pennsylvania.
“Most other industries have understood for a long time that you can transcend geography, particularly through the use of technology, and higher education is waking up to that realization as well,” says Michael Horowitz, president of Chicago-based TCS Education System. The consortium has five member institutions representing five states and several professional disciplines, including law, nursing, integrative health care, management, education, and psychology. For TCS, which is shorthand for The Community Solution, the unifying factor is institutional mission.