1. IBHE Presentation 1 Illinois Higher Education Performance Funding Model Steering Committee Presentation March 28, 2012 Dr. Alan Phillips

2. Purpose To address the missions, functions, composition, and responsibilities of the Performance Funding Refinement Committee and the way ahead for the refinement effort. IBHE Presentation 2

3. What We Have Accomplished So Far Identified the key issues. Developed performance funding principles. Identified appropriate performance measures and sub- categories. Developed performance funding models for both 2-year and 4-year colleges and universities. Acquired initial data. Received input from steering committee members, colleges and universities, other groups, and individuals. Finalized the performance funding model for both four-year and two-year colleges and universities. Submitted the FY2013 Budget Recommendations, which included a performance funding component. IBHE Presentation 3

4. Performance Metrics Shall: – Reward performance of institutions in advancing the success of students who are: Academically or financially at risk. First generation students. Low-income students. Students traditionally underrepresented in higher education. – Recognize and account for the differentiated missions of institutions of higher education. – Focus on the fundamental goal of increasing completion. – Recognize the unique and broad mission of public community colleges. – Maintain the quality of degrees, certificates, courses, and programs. IBHE Presentation 4 Public Act 97-320 (HB 1503)

5. Refinement Committee Purpose To address shortcomings and resolve issues regarding the performance funding model itself and the data associated with the measures and sub-categories that were used in the model. IBHE Presentation 5

6. Intent of the Refinement Effort Determine if there are ways we can improve the model (i.e. scale the data). Improve the quality of existing data used in the model. Identify additional sources of quality data. Refine the existing measures by developing more concise and clear definitions for what we want to assess. Expand the scope of the model by identifying and compiling data for measures and sub-categories that can be added to the model. IBHE Presentation 6

7. Refinement Committee Composition IBHE Deputy Director for Fiscal Affairs (Chair). Institutional research representatives from each of the nine universities, as selected by the universities. ICCB Representative. IERC Representative. IBHE Staff. IBHE Presentation 7

8. Goal Develop the best possible model given the constraints of: – Time – Resources – Lack of State funding – Availability of data – The difficulty of capturing the uniqueness of each individual college or university IBHE Presentation 8

9. Tasks In addition to refining the existing measures, develop a list of additional measures for consideration, to include the definitions and sources of the data. – At a minimum, measures should address, but are not limited to the following areas; – Efficiency measures (e.g. completions/inputs, unit cost) – Improved research performance measures (e.g. patents, business startups, and external grants acquired/maintained). – Entry and momentum measures (e.g. retention rates, transfer rates) – Academic quality measures (e.g. full-time vs. part-time faculty) Indicate whether these measures are from existing sources or need to be added to current Longitudinal Data System (LDS) data collection efforts. Solicit assistance from IERC in the development of definitions and the identification of additional measures that could be added to data collection efforts for use as possible performance indicators. IBHE Presentation 9

10. Challenges Ensuring there are enough variables in the model to diversify away some of the differences in the universities, without making the model too complex. Identifying measures that address the entirety of the higher education process. Addressing the timeliness and the availability of the data. Ensuring we do not create incentives for colleges and universities to do things we do not want them to do. The law of unintended consequences. Getting to the point where we can lock the model for a period of time so that colleges and universities do not have a continually moving performance target. IBHE Presentation 10

11. Committee Groundrules This is a refinement effort. We are not starting over with a new model. This is a partnership. IBHE has the performance funding responsibility, but we are looking at this from the perspective of the universities. The model has to work for all twelve public universities. The model has to be transparent to the extent possible. The model has to produce results that are considered to be equitable. We are not looking for perfection. IBHE Presentation 11

12. IBHE Presentation 12 Performance Funding Model 4-Year Public Universities

13. Performance Funding Model Steps (4-Year Public University) Step 1 – Identify the performance measures or metrics that support the achievement of the state goals. Step 2 – Collect the data on the selected performance measures Step 3 – Award an additional premium (i.e. 40%) for the production of certain desired outcomes such as completions by underserved or underrepresented populations Step 4 – Normalize (scale) the data, if necessary, so it is comparable across variables. Step 5 – Weight each of the Performance Measures that reflects the priority of the Measure and the mission of the institution. Step 6 – Multiply and sum the Scaled Data times the Weight to produce the Weighted results. Step 7 – Use the Weighted results (or Total Performance Value) to distribute performance funding. IBHE Presentation 13

14. Performance Measures IBHE Presentation 14 MeasureSource Bachelors Degrees (FY07-09)IPEDS Masters Degrees (FY07-09)IPEDS Doctoral and Professional Degrees (FY07-09)IPEDS Undergraduate Degrees per 100 FTE (FY07-09)IPEDS Education and General Spending per Completion (FY09-11) RAMP Research and Public Service Expenditures (FY09-11) RAMP Step 1 – Identify the performance measures or metrics that support the achievement of the state goals. Step 2 – Collect the data on the selected performance measures (3-year averages)

15. IBHE Presentation 15 Possible Performance Measures Future Measures* Retention (By Cohort) Time to Completion (within 100% or 150%) Students Accumulation of Credit Hours (24/48/72) Student Transfers Remediation Diversity of Staff and Faculty Quality * The data for these measures is either not currently available or is not of sufficient quality to use.

16. Sub-Categories IBHE Presentation 16 Sub-CategoryWeight Low Income (Pell/Map Eligible) 40% Adult (Age 25 and Older) 40% Hispanic 40% Black, non-Hispanic 40% STEM & Health Care (by CIP Code) 40% Step 3 – Award an additional premium for the production of certain desired outcomes such as completions by underserved or underrepresented populations

17. IBHE Presentation 17 Future Sub-Categories* Part-Time Disabled Veterans First Generation English Language Learners Residents of Underserved Counties Additional Ethnic Categories * The data for these measures is either not currently available or is not of sufficient quality to use. Possible Sub-Categories

18. Scaling Factors Averaged the measures across all of the institutions. The average number of bachelors degrees will serve as the base value. Determine a scaling factor that will normalize the rest of the averages to the average number of bachelors degrees. Adjust the scaling factors as appropriate (i.e. Masters & Doctorates). Multiply all of the initial data by the scaling factor to normalize the data. IBHE Presentation 18 MeasureUniversities 1-12 (Avg) Scaling Factor Adjusted Scaling Factor Bachelors Degrees (FY07-09) 4,445 1.001.00 Masters Degrees (FY07-09) 1,152 3.861.00 Doctoral and Professional Degrees (FY07-09) 796 16.252.00 Undergraduate Degrees per 100 FTE FY(07-09) 26 173.64 200.00 Education and General Spending per Completion (FY09-11) 4,639 -.96 -1.00 Research and Public Service Expenditures (FY09-11) 10,803,117.0004115.0005000 Step 4 – Normalize (scale) the data, if necessary, so it is comparable across variables.

19. Performance Measure Weights IBHE Presentation 19 Step 5 – Weight each of the Performance Measures that reflects the priority of the Measure and the mission of the institution. UIUCUICNIUSIUCISU 22.5% 37.5% 40.0% 15.0% 20.0% 22.5% 15.0% 10.0% 7.5% 5.0% 10.0% 12.5% 2.5%0.0%2.5%0.0%2.5% 40.0%42.5%20.0%22.5%15.0% 100.0% Doctoral/ Research-Very High Research-HighResearch Masters Colleges & Universities (Large) SIUEWIUEIUNEIUCSUGSUUIS 45.0% 47.5%50.0% 25.0% 27.5% 25.0%37.5% 5.0%2.5%0.0% 2.5%0.0%2.5% 15.0% 0.0% 2.5%10.0% 7.5%10.0%7.5% 2.5% 100.0% Weights Based on Institutional Mission Bachelors Degrees Masters Degrees Doctoral and Prof Degrees Undergrad Degrees per 100 FTE Education Spending/Completion Research and Public Service Expenditures Weights Based on Institutional Mission Bachelors Degrees Masters Degrees Doctoral and Prof Degrees Undergrad Degrees per 100 FTE Education Spending/Completion Research and Public Service Expenditures

20. Performance Value Calculation IBHE Presentation 20 Measure Bachelors Degrees Masters Degrees Doctoral and Professional Degrees Undergraduate Degrees per 100 FTE Education and General Spending per Completion Research and Public Service Expenditures 3,921 1,552 209 23.2 3,788 5,486,590 6,813 1,754 229 23.2 3,788 5,486,590 Data Data + Premium Scale 1 2 200.0005 (Data+Premium) x Scale 6,813 1,754 458 4,646 -3,788 2,743 xWeight = 35.0% 25.0% 5.0% 10.0% 5.0% 20.0% 100.0% Total Performance Value 2385 438 23 464 -189 549 3580 Step 6 – Multiply and Sum the Scaled Data times the Weight to produce the Total Performance Value.

21. IBHE Presentation 21 Percentages for Distribution Total Performance Value 10,840 4,435 2,027 17,302 Percentage of Total 62.7% 25.6% 11.7% 100% Distribution: Pro Rata$627,000 $256,000 $117,000 $1,000,000 University 1 University 2 University 3 Total Funding Allocation Based on Performance Step 7 – Use the Weighted results (or Total Performance Value) to distribute funding based on a Pro Rata Share of the total amount of funds set aside for performance funding.

22. Performance Funding Model All steps are identical at each university The model accounts for each institutions unique mission by adding a weight to each measure. Each institutions formula calculation is independent. The formula calculation for each institution will change each year based on annually updated data. The funding allocation is competitive. Funds are distributed on a pro rata basis according to each institutions formula calculation. The model is not prescriptive in how to achieve excellence and success (what, not how). IBHE Presentation 22

23. The Way Ahead The next Refinement Committee meeting is scheduled for the 21 st of June. In preparation for that meeting, committee members will be: – Reviewing the work to date. – Looking at better ways to scale, or normalize, the data. – Working to better define the measures. – Identifying better sources of more current data. – Considering which measures and sub-categories we may want to add to the performance funding model. We will also be working to address data issues in conjunction with the ILDS effort. IBHE Presentation 23

24. Questions/Comments? IBHE Presentation 24