Who’s Worth More: the Administrator or the Professor?

Should an average salary for full professors of $102,402 be considered low compared to an average salary of $334,617 for college and university presidents and $202,048 for chief financial officers? Should institutions be concerned that the ratio of faculty and staff positions per administrator dropped from 3.5 in 1990 to 2.2 in 2012? Those are the kinds of questions posed by a new report from the American Council of Trustees and Alumni (ACTA) that encourages college leaders to contain and even cut administrative spending.

“How Much is Too Much? Controlling Administrative Costs through Effective Oversight” provides a set of baselines allowing public and private non-profit institutions to compare the ratio of their spending on administration relative to spending on instruction. The raw information was pulled from publicly available data from the U.S. Department of Education’s IPEDS survey.

Instructional costs encompassed direct instructional support, as well as academic administration (“academic deans but not department chairpersons”); libraries, museums and galleries; and anything else related to supporting the institution’s primary mission. The administrative costs covered those expenses tied to daily operational support, including general administrative services, executive direction and planning, legal and fiscal operations and public relations and development.

What’s not included are expenses related to student services (student activities, career services or financial aid staff) and auxiliary expenses (parking facilities, housing or food services).

The result is compiled into two “dashboards,” one for four-year public schools and another for four-year private, not-for-profits. Each chart breaks the ratios down by Carnegie classification and enrollment size.

As the report explained, “The higher a school’s ratio, the greater the proportion of the institution’s spending on administration relative to its spending on instruction.” A ratio of 0.53, for example, means that the college spends 53 cents on administration for every dollar it spends on instruction.

Among public institutions, the smallest median ratio — 0.16 — is found in medium-sized doctoral universities with the greatest amount of research activity. The largest median ratio — 0.39 — is found within small four-year arts and sciences colleges. For private, not-for-profits, the lowest and highest ratios are found in the same types of schools, but they’re higher in both cases compared to the publics. The lowest ratio is 0.21 for doctoral universities; and the highest ratio is 0.64 for the smallest four-year arts and sciences colleges.

Overall, private, non-profits tended to spend more than public institutions on administration-related expenses compared to instructional expense. Over half spend 50 cents or more on administration for every dollar spent on instruction — while schools with higher research activity have the lowest ratios