eNEWSLINE - Business Education News from AACSB International

Where Do B-School Budgets Go? A Snapshot of 2013-14 B-School Financial Data

February 2015

By Jessica Brown
Senior Manager, Knowledge Services
AACSB International

Finances are always a hot topic, especially when schools are working on their annual budgets and long-term financial strategies. As part of the annual Business School Questionnaire (BSQ) and BSQ Finances Module collected beginning in February each year, AACSB International collects data from member schools about budgets, endowments, school structure, and both the uses and sources of operating funds. It is common for school administrators to use this kind of data in both planning and benchmarking needs.

How Much of a B-school’s Uses of Funds Goes to Salaries?

One of the big challenges always concerns the balance of properly compensating faculty for the best possible educational experience for students versus paying for the many other needs of a successful business school. The balance needed can vary based on a lot of different factors, including the financial structure of the school, its institutional control, and its overall faculty size. The chart below compares mean and median percentages for salary and non-salary uses of funds based on school size and on full-time faculty count (35 or fewer = small, 36 to 74 = medium, 75 or more = large). It is clear from these percentage averages that faculty salaries make up the bulk of the uses of funds for b-schools regardless of size.

Mean/Median Percentages of the Uses of Operating Funds
Source: AACSB International Business School Finances Module (2013-14)

How Much Money Do B-Schools Report for Their Operating Budgets?

If salaries are the biggest answer to where the b-school funds are being used, the next question is a question of just how much money business schools have available to try to meet the needs of their students, faculty, and communities. The chart below shows the average (mean) operating budget, as reported by AACSB member schools in different geographic regions.

Average Operating Budgets in Millions of U.S. Dollars
Source: AACSB International Business School Finances Module (2013-14)

A Balancing Act: How Do You Make the Most of Financial Information About B-schools?

Financial data like this can be crucial for b-schools to help make the most of their spending. Maximizing the results with a budget and ongoing costs can be a difficult balance, especially with constant progress in technology and business practices and the need for schools to maintain an active and up-to-date facility and faculty. In order to help AACSB members with this valuable and necessary process, AACSB has recently released a new set of tools to make the most of this data. The Financial Toolkit is a new member-only resource that offers a bevy of tools, information, and resources designed for business school deans, chief financial officers, and others to ensure the financial well-being of their institutions. AACSB members can access the toolkit using a myAACSB login here.

The 2014-15 BSQ and BSQ Finances Module will open for data entry in mid-February. Member schools that participate will also receive additional access to special reports and benchmarking tools when the newest BSQ data is released for the year.