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Institutional Adequacy Framework


NCHEMS developed a conceptual framework for rationalizing state decision making about institutional appropriations for use in states seeking to revise their approach to making funding decisions.

Challenges Approach Impacts Resources


Facing an erosion of public support and trust, and needing to maintain adequate funding levels, higher education is becoming unaffordable.


The Institutional Adequacy Framework is aimed at ensuring that policymakers are fully aware of the impact of resource allocation decisions they are asked to make, what share of such costs the state should bear relative to student payments, and how those shares may need to differ across institutions based on their missions and the characteristics of their students. This framework unpacks the costs public institutional budgets beginning by acknowledging the responsibility states have in preserving the value of their own assets, a level which advances a basic standard for frugal funding adequacy. This level of unavoidable funding among state colleges and universities can be analogous to other kinds of public assets that accrue costs by their mere existence, such as state parks which require administrative oversight, rescue services, and general maintenance even on days they attract no fee-paying visitors. Building from this base, the framework also accounts for varying costs of institutional missions and connects funding requirements to state priorities. Originally developed for a virtual seminar series on “Public Finance of Higher Education” sponsored by SHEEO (link) and stimulated by existential financial challenges faced by Vermont’s state colleges that were at the core of one NCHEMS engagement, the framework has since undergone revisions and improvements. NCHEMS’ work with SCHEV featured the adaptation of the framework for use in directing state investments in Virginia. Visit our Insights & Updates blog to learn more about our approach.


This conceptual framework has attracted attention from state SHEEO agencies, system offices, and occasionally from institutions, which find the rational approach to defining public institutions as an asset that requires a basic level of public (non-tuition) support appealing. Virginia is redesigning their approach to funding public institutions with the Institutional Adequacy Framework at its core.