APPROVED Membership Contribution Model for ACDE

AFRICAN COUNCIL FOR DISTANCE EDUCATION ACDE APPROVED FINANCIAL SUSTAINABILITY MODEL FEBRUARY, 2016... to interrogate the ACDE financial sustainability model which was presented on 28 Feb

AFRICAN COUNCIL FOR DISTANCE EDUCATION (ACDE) APPROVED FINANCIAL SUSTAINABILITY MODEL

FEBRUARY, 2016

of the income of the Council to meet its obligations, the Executive Board of the ACDE resolved at the 22ndExecutive Board Meeting held in Lusaka, Zambia on 14 September 2013 to establish a five person taskteam to “develop a five year sustainability strategy for the ACDE” Attached as appendix 5 is the report ofthe task team.

An earlier version of this report, attached as appendix 6, was tabled at the ACDE Executive Committeemeeting in Baira Mozambique on 25 February 2015 The Executive Committee established a task teamand directed them to interrogate the report and make further recommendations regarding revisions tothe sustainability model with particular reference to the annual membership contributions of ACDEmember institutions The task team was further requested to deliberate on other matters and strategiesthat could positively impact on the financial sustainability of the ACDE

The following are the members of the committee:

1 Dr Molapo Qhobela Molapo (Vice Principal, UNISA) Chairperson

2 Prof Israel F Adu (Director, ACDE-QAAA, NOUN) Member

3 Prof Elifas T Bisanda (Acting VC, OUT) Member

4 Dr Musa Fadlalla Ali (Principal, OUS) Member

5 Prof Rotimi Ogidan (Executice Director, ACDE) Secretariat

6 Dr Kassimu A Nihuka (Director, ACDE-TCC, OUT) Secretary

7 Dr Evaristo A Mtitu (Manager, VC’s Office, OUT) Member

8 Prof Chrispine Chiwome (Research Fellow, ZOU) Member

9 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:

1 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 thepayments of annual institutional membership subscription using the principle of proportion ofODL students against the students in the conventional institutions

would be utilized

3 to review the ACDE Human Resources Policy document

4 to deliberate on the payment of top up allowance for the ACDE secretariat staff particularly toensure that it agrees with funding capability of the Council and

5 to deliberate on other relevant strategies that would improve the financial sustainability ofACDE

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 nordesirable 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 importantfor sustainability that members demonstrate their commitment to the organisation in hard financialterms, as well as commitments of staff time and other resources Appendix 1 is the list of currentinstitutional members and their current annual institutional membership and voluntary contributionfrom 2011 to 2013

In developing a proposed model for membership fees, it is instructive to study the fee structure of otheruniversity associations It is noted that this comparison is challenging in that the table below does notreflect potential alternative income streams, the maturity of the various associations or the size of theirmembership 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 of African

Universities (AAU) Size of institution (number of students)

Inter-University Council for East

Africa (IUCEA) Size of institution

Association of Commonwealth

Universities (ACU) HDI ranking of the country and income of the HEI

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) Size of Institutional Block Grant

Southern African Regional

Universities Association (SARUA) Size of the institution and the GDP per capita in US $

In terms of table 1 above, it can be noted that similar associations utilise different models for feecalculation, and some of these continental based associations are also facing challenges of financialsustainability.

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 urgentlyinitiates a process to develop a strategic plan for the period 2015 to 2020 This will ensure that theincome 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 financialsustainability 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 theirgrowth on the Continent Deepening and broadening the knowledge base on the value andbenefits 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 andbetween 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 onresponding 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 AUand 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 theorganisation; the following is also proposed:

 ACDE membership fees must cover the minimum operational needs of the organization, whichmust include defined minimum services to members Donor and other philanthropic agenciesare more likely to support an organization for dedicated projects if they know that the ACDEmembers financially support the operations of the organization;

 The ACDE as an organization must provide a minimum menu of services to paid up institutionalmembers;

 That the staff of the ACDE secretariat are seconded from and paid for by the member institutionand this is taken as part of their contribution;

 That the ACDE projects are funded from surplus funds after all operational costs have been metand from additional and separately sourced funds from donors or other benefactors Inpreparing 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

 Annual Vice Chancellor Forum – Convene a Vice Chancellor dialogue and networking forumevery year to share experiences and discuss pertinent issues facing ODL institutions on theContinent and beyond;

 Capacity Development Workshops in identified areas such as Quality Assurance, ManagementInformation and Strategic Planning Member institutions will be encouraged to provide theresource persons and venues for such meetings

 A quarterly Newsletter - Communication of issues facing ACDE member institutions and ODLissues 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

2 below is the list of African countries in term of GDP per capita for the period 2010 to 2013 Appendix 2also illustrates the diversity of African economies, with the majority of the 55 countries presenting a GDPper capita of less than US $ 3000 Only 17 countries have GDP per capita of US $ 5000 or higher Theseinclude 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 theaccording to the size of the institution in terms of student headcount and the GDP per capita of theirhost country Similarly, it was noted that the current model of a flat institutional fee of US$ 2 000 peryear was ideal as it did not consider the differential capacity of institutions to support the ACDE andneither 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 institutionsand the active Full Time Equivalent (FTE) student enrolment; such data is not publically available for themajority of ACDE members However, the institutions student enrolment data and the country’s GDP percapita are publically available and are deemed good measures that recognise the diversity of ACDEmembers

Table 2 below shows the current, distribution of ACDE member institutions according to registeredstudent headcount, while appendix 2 illustrates the diversity of African economies, with the majority ofthe 55 countries presenting a GDP per capita of less than US $ 3000 Only 17 countries have GDP percapita of US $ 5000 or higher

Table 2 SIZE OF ACDE MEMBER INSTITUTION

(BASED ON PUBLICALLY AVAILABLE STUDENT ENROLMENT DATA)

<8 000 Students 8 001 – 15 000 Students 15 001 – 30 000 Students 30 001 – 50 000 Students Students >50000

Table 3 GDP Per Capita Bands for African Member States

GDP per capita in current USD

 No institution should pay subscription fees less than 2000 USD That means every institutionshould pay at least 2000 USD

 There must be visible and justifiable discrimination of fees to be paid by member institutionsthat differ in size and their host country GDP per capita

 The contributions should be fair and justifiable

Based on the principles, a linear mathematical model was then formulated that considers size ofinstitution in terms of enrolment of students and GDP per capita as follow:

C=F+xA+yBWhere;

C=contribution

x=Factor due to GDP

y=Factor due to enrolment

A=Constant related to GDP, and

B=Constant related to enrolment

The mathematical model also allocated a factor for the relationship between the student headcount andthe GDP per capita of host countries as per table 4 below

Table 4 Factorial Allocation based on Student Headcount and GDP Per Capita Bands for African Member States

FACTOR Student Head Count Enrolment GDP per Capita for Country

It is Recommended that the ACDE Executive Board Fund Raising & Development Committee:

i Consider the issues raised in this document regarding a new model of institutional membershipfees to ensure financial sustainability of the ACDE; The implications for individual institutionalmembers in outlined in appendix 4 below;

ii Support and approve the proposal to determine annual institutional membership fees of theACDE in terms of the institutional size and the GDP per capita of the host country;

iii Direct the ACDE secretariat to initiate a process to develop the 2015 to 2020 Strategic Plan of theorganization

iv Consider and approve the proposed minimum services that the membership fees will deliver topaid up institutional members of the ACDE;

v Make consequential amendments to the ACDE constitution and recommend these to the nextAGM

vi Commit to advocate and lobby the model and approach to current and potential ACDEmembers, especially to current members whose membership fees will increase significantly

Appendix 1ACDE Institutional Members and Respective Contributions

Annual ContribUS$

VoluntaryContn US$

Annual ContribUS$

Voluntary ContribUS$

Annual ContribUS$

Voluntary Contrib US$

INSTITUTION 2011 2012 2013

Annual ContribUS$

Voluntary Contn US$

Annual ContribUS$

Voluntary ContribUS$

Annual ContribUS$

Voluntary Contrib US$

Annual ContriUS$

Voluntary Contn US$

Annual ContriUS$

Voluntary ContribUS$

Annual Contrib US$

Voluntary Contrib US$

African Members States GDP Per Capita in current US $

AFRICAN COUNCIL FOR DISTANCE EDUCATION STUDENT ENROLMENT OF INSTITUTIONAL MEMBERS

Institution Country Student Headcont Enrolment -

Latest Public Data

20 Anambra State University Nigeria

21 Modibbo Adama University Nigeria

23 University of Rwanda Rwanda 29 000

Scenario Options for a Revised Annual Membership Fee

for ACDE Institutional Members

4000 0.2 <8,000 <1200

Institution Country Country

GDP Per Capita

US $ 2013

Student Headcont Enrolment

GDP Factor (x)

Student Factor (y)

Proposed Membership Fee in US $

Proposed Membership Fee in US $

Proposed Membership Fee in US $

25 UNISA South Africa 12 500 361 000 1 1 11000 10500 10000

26 Pretoria South Africa 12 500 55 000 1 1 11000 10500 10000

27 North West South Africa 12 500 60 000 1 1 11000 10500 10000

AFRICAN COUNCIL FOR DISTANCE EDUCATION (ACDE)

TOWARDS SUSTAINING THE ACDE

A REPORT PRESENTED TO THE EXECUTIVE BOARD OF THE AFRICAN COUNCIL FOR

DISTANCE EDUCATION (ACDE)

30 OCTOBER 2013

TOWARDS SUSTAINING THE ACDE

Table of Contents

Background and context 18

Terms of Reference 18

Mode of Operation 18

Organizational Performance 19

SWOT Analysis 19

Strengths 19

Weaknesses 20

Opportunities 20

Threats 20

Observations 21

Recommendations 21

Organisational 22

Immediate 22

Medium term 22

Long term 23

Programmatic and Financial 23

Immediate 23

Medium term 24

Long term 24

References 25

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 22nd 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” To this end the ACDE secretariat requested and received nominations from the Vice Chancellors, which resulted in the composition of the task team as listed below:

Prof Folorunso I Adu (National Open University of Nigeria)

Prof Chrispen Chiome (Zimbabwe Open University)

Prof Johnson Changeiywo (Egerton University)

Dr Molapo Qhobela (University of South Africa)

Dr Kassimu A Nihuka (Open University of Tanzania)

Prof Mutale Musonda (ACDE Secretariat)

The task team nominated Dr M Qhobela to chair the task team and deliberations and Dr Nihuka

to be the secretary of the meeting The members of the task team convened for a retreat at Panari Hotel, Nairobi from 28 to 31 October 2013

Terms of Reference

The Terms of Reference provided to the members of the task team were to prepare a five-year

sustainability strategy document for African Council for Distance Education (ACDE) The team

reflected on the request of the Executive Board of the ACDE and resolved that the development

of a five year sustainability strategy is a significant endeavor that cannot be developed over a 3 day retreat However, given the urgent and dire challenges faced by the ACDE, the team undertook to develop a resource plan (institutional and financial) that matches and complements the strategic direction of the Council as it is articulated in its vision and mission statement This document is thus presented as a report towards a sustainable ACDE with specific recommendations for the Executive Board’s urgent consideration

Mode of Operation

The task team used the first day and half of the second day to discuss and reflect on the critical issues that are current and will be faced by the ACDE which will inform the urgent choices that must be made by the Board on behalf of the Council In this regard, the team embarked on a brief SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis on the state of the ACDE, followed by a reflection on the progress made towards achieving the goals and specific deliverables contained in the ACDE rolling Strategic Plan 2010 to 2014; as well as reflecting on

the financial position of the Council, with particular reference to the most recent audited financial statements and the proposed 2014 budget These and other matters informed the deliberations of the task team

Organizational Performance

The task team observed that the ACDE has been reasonably successful in establishing itself as a credible and reputable organization representing the interest of the ODL community within the African continent This has resulted in being recognized by the African Union as the lead implementing agency of the AU Similarly, the Council should be commended for having increased its membership from an initial 5 institutions to the current 48 However, many of these institutions are not paid up members of the organization In addition, these successes also have to

be seen in the context of the very ambitious Strategic Plan, 2010 to 2014

As the Council enters the last year of the Strategic Plan, it is sobering to note that the majority of the targeted activities have yet to be met; and that the Council is still facing similar challenges to those identified in the implementation of the 2007 – 2009 strategic plan Some of these challenges are organizational in nature, while others are programmatic and financial In this regard, an immediate crisis facing the Council is the financial sustainability of the ACDE Currently, the anticipated expenditure is significantly above income, and further the income is not able to meet the salary bill of the organization The Council has also been reporting an annual deficit for the last 3 years and has only been able to continue operating due to the generosity of institutions that are members of the Executive Committee This generosity has limits and thus hard and immediate choices must be made

SWOT Analysis

The task team identified the following strengths, weaknesses, opportunities and threats currently

faced by the ACDE

Strengths

1 Increasing membership of ACDE

2 Enhanced collaboration and interaction among ACDE member institutions

3 Availability of a continental tool for quality assurance and control in ODL.

4 Successfully utilized staff of member institutions to work for the ACDE.

5 Succeeded in developing institutional collaboration research and capacity building e.g collaboration in ODL research among member institutions

6 Enhanced the value of the ACDE through TCC enhanced inter-institutional collaboration.