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Perceived Reputation and Capacity Bias in Higher Education Funding Mechanisms

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Emily Devereux 
May 10, 2019

Institutions of higher education competitively struggle to secure a proportionate share of external funding, including sponsored funding and private gifts. This results in social equity performance concerns regarding the distribution of funding mechanisms. This concern further results in a disproportionate number of sponsored opportunities for faculty and students, creating the haves and the have-nots present in institutions of higher education. Based on previous research on social equity performance in the distribution of funding mechanisms in institutions of higher education, administrative capacity and reputation have been found as contributing elements by peer review and panels during the funding process. Yet, what contributes to the perceived reputations and administrative capacities by panel reviewers and philanthropic sponsors?

Institutions affected by the disparity in social equity performance of funding mechanisms are typically those which have less capacity in terms of funding resources and administrative infrastructure and have experienced such disparities in the past in the distribution of resources. This further divides them from the large and stable institutions which rely on their established reputations from advantageous access to funding resources. These types of minority institutions have been found in previous studies to experience a disadvantaged bias in distribution of funding mechanisms and award management as agencies and foundations base their decisions on models that weigh reputation and capacity when awarding funding resources. Social equity suffers under the competition-based funding models due to applicants with higher capacity and a reputation of prestige and performance holding higher rank than disadvantaged minorities in the evaluative process. Perception of higher capacity attracts more funding through such models, as sponsors apply competitive context to capabilities of the applicants or institutions based on cost and performance. Social equity then becomes lost in the process due to need-response matching taking the backseat to efficiency and effectiveness translated through capacity and reputation.

Contributing factors to perceived reputation and capacity include classification systems that are recognized by United States institutions. The Carnegie Classification, described as the dominant classification system for higher education research and a comparison tool for peer institutions, is one of the oldest published rankings recognized in classifying university programs and reputations for doctorate-granting universities.  It bases its methodology on publicly available data, including research expenditures, conferred eligible doctoral degrees, faculty composition, and research staffing. Carnegie has periodically updated its methodology to accommodate the changing landscape of research and higher education, most recently updating the basic classification system in 2018 to include professional doctoral degrees. The viability of Carnegie has provided universities and funding agencies a consistent and adaptable classification system to base comparisons of research activity across U.S. institutions of higher education.

Further exploring this concept, Thomas McGarity, in his article, “Peer Review in Awarding Federal Grants in the Arts and Sciences,” states reputation bias in peer reviews and panels is sometimes referred to as the halo effect due to agencies and sponsors awarding funds based on the review panel’s recommendations for funding when they rank the proposal higher based on the researcher’s or institution’s past reputation rather than merit of the proposal. Some agencies and sponsors have also been stifled by the old boy network or old boyism when peer review panels are allowed to serve extended terms and take care of their own in the review process. Reputation perception or biases are a direct contributor to the social equity performance issue in distribution of funds and resources in higher education institutions and demands attention from government agencies and philanthropic sponsors to better the funding models and mechanisms in best practices for better equity.

Expanding reputation bias is the concept of institutional capacity, of which is organizational performance in both attracting and the absorbing resources. Beth Honandle, in her article, “A Capacity-Building Framework: A Search for Concept and Purpose,” emphasizes that from the perspective of a funding agency or philanthropic sponsor, the ability of the institution to both absorb and manage funds with efficacy is critical during their decision process, as they perceive institutions that are smaller or with less rank as unable to absorb the same or equal amount of resources as the larger or higher ranked institutions. Such capacity is measured through data points identified in the Carnegie Classification system, thus administrative capacity being a contributor to the perceived reputation considered during the funding process.

Governmental reports on research and development expenditures reflect that universities of very high research activity have expended 71 percent of national research and development expenditures, with all other university and colleges representing the remaining 29 percent of expenditures. Public institutions contributed to 66 percent of expended funds, with private institutions the remaining 34 percent of expenditures. In contrast, private institutions reported 68 percent of institutions’ total endowment assets, leaving public institutions at a rate of 32 percent in endowment returns. These statistics raise important questions as to how reputation and prestige contributes to funding distribution and types of funding mechanisms. A further look into how the percentage of funding distribution reveals gaps between Carnegie classifications both in research and development funds and in foundation or private endowments, and if public or private institutions play a significant role in funding trends will provide additional insight to the role of reputation and capacity in funding models.

Author: Emily Devereux is executive director of research and technology transfer at Arkansas State University and is a student in the DPA program at West Chester University in Pennsylvania. She is a certified research administrator, serves as chair of NCURA Region III, and serves on the Arkansas State University’s MPA advisory board. She can be reached at [email protected] and followed on Twitter @EmilyDevo.

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