Documenting the Growth of Responsibility Center Management Budget Models in Public Higher Education

As most of higher education is concerned about their financial position, a growing number of colleges are trying to encourage academic units to generate additional revenues and cut back on expenses. One popular way of doing this is through responsibility center management (RCM) budget models, which base a portion of a unit’s budget on their ability to effectively generate and use resources.[1]

Both universities that I have worked at (Seton Hall and Tennessee) have adopted variations of RCM budget models, and there is a lot of interest—primarily at research universities—in pursuing RCM. Having been through RCM, I am quite interested in the downstream implications of RCM on how leaders of institutions and units behave. There are a couple of good scholarly articles about the effects of RCM that I use when I teach higher education finance, but they are based on a small number of fairly early adopters and the findings are mixed.

One of my current research projects is examining the growth of master’s degree programs (see our recent policy brief), and I have a strong suspicion that institutions adopting RCM budget models are more likely to launch new programs as units try to gain additional revenue. My sense is that there have been a lot of recent adopters, but the best information out there about who has adopted RCM comes from slides or information provided by consulting firms (which often are not under contract by the time the model is supposed to be fully implemented). This led me to spot check a few institutions commonly listed on charts, and some of them appear to have either never gotten past the planning stage or quietly moved to another budget model.

My outstanding research assistant Faith Barrett and I went through documents from 535 public universities (documents from private colleges are rarely available) to collect information on whether they had announced a move to RCM, actually implemented it, and/or abandoned RCM to return to a centralized budget model.[2] The below figure summarizes the number of public universities that had active, implemented RCM budget models for each year between 1988 and 2023.[3]

There has been a clear and steady uptick in the number of public universities with active RCM models, reaching 68 by 2023. Most of this increase has happened since 2013, when just 25 universities used RCM. Only seven universities that fully implemented RCM fully abandoned the model based on publicly available documents (Central Michigan, Ohio, Texas Tech, Illinois-Chicago, Oregon, and South Dakota), although quite a few colleges have backed off how much money flows through RCM.

Additionally, a number of universities publicly announced plans to move to RCM before apparently abandoning them before implementation. Some examples include Missouri, Nebraska, and Wayne State. This is notable because these are often included on consultants’ slide decks as successful moves to RCM.

Here is the list of universities that had fully implemented RCM by fall 2023. If you see any omissions or errors, please let me know!

Name	State
Auburn University	AL
University of Alabama at Birmingham	AL
University of Arizona	AZ
University of California-Davis	CA
University of California-Los Angeles	CA
University of California-Riverside	CA
University of Colorado Boulder	CO
University of Colorado Denver/Anschutz Medical Campus	CO
University of Delaware	DE
University of Central Florida	FL
University of Florida	FL
Georgia Institute of Technology-Main Campus	GA
Iowa State University	IA
University of Iowa	IA
Boise State University	ID
Idaho State University	ID
University of Idaho	ID
University of Illinois Chicago	IL
University of Illinois Urbana-Champaign	IL
Ball State University	IN
Indiana University-Bloomington	IN
Indiana University-Purdue University-Indianapolis	IN
Kansas State University	KS
University of Kansas	KS
Northern Kentucky University	KY
Western Kentucky University	KY
University of Baltimore	MD
University of Michigan-Ann Arbor	MI
University of Michigan-Dearborn	MI
Western Michigan University	MI
University of Minnesota-Twin Cities	MN
University of Missouri-Kansas City	MO
The University of Montana	MT
North Dakota State University-Main Campus	ND
University of North Dakota	ND
University of New Hampshire-Main Campus	NH
Rutgers University-Camden	NJ
Rutgers University-New Brunswick	NJ
Rutgers University-Newark	NJ
University of New Mexico-Main Campus	NM
Kent State University at Kent	OH
Miami University-Hamilton	OH
Miami University-Middletown	OH
Miami University-Oxford	OH
Ohio State University-Main Campus	OH
University of Cincinnati-Main Campus	OH
Oregon State University	OR
Southern Oregon University	OR
Pennsylvania State University-Main Campus	PA
Temple University	PA
University of Pittsburgh-Pittsburgh Campus	PA
College of Charleston	SC
University of South Carolina-Columbia	SC
East Tennessee State University	TN
Tennessee Technological University	TN
The University of Tennessee-Knoxville	TN
University of Memphis	TN
The University of Texas at Arlington	TX
The University of Texas at San Antonio	TX
University of Utah	UT
George Mason University	VA
University of Virginia-Main Campus	VA
Virginia Commonwealth University	VA
University of Vermont	VT
Central Washington University	WA
University of Washington-Bothell Campus	WA
University of Washington-Seattle Campus	WA
University of Wisconsin-Madison	WI

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[1] This is also called responsibility centered management, and I cannot for the life of me figure out which one is preferred. To-may-to, to-mah-to…

[2] RCM can be designed with various levels of centralization. Pay attention to the effective tax rates that units pay to central administration—they say a lot about the incentives given to units.

[3] This excludes so-called “shadow years” in which the model was used for planning purposes but the existing budget model was used to allocate resources.