Q: We are currently “negotiating” with our administration on the percentage of net profit we can retain in our continuing ed department at the end of the year. I would appreciate any statistics that you can provide from other institutions that might help my case.
A: Presently there is not standard number. The amount of net kept by continuing education units ranges from 0% to 100%, but in most cases continuing education units do not normally keep their net. But there is a shift starting because of the need for continuing education to a) invest in future growth and b) have a reserve for down years.
-Another issue is how is net being defined. LERN would say net is income minus promotion, marketing, and administration expenses. Administration expenses are direct expenses (staff salaries and benefits, staff computers, staff training, and so on) and not indirect expenses (rent, lights, insurance, and so on). Some continuing education units show a stronger net because they are not covering all their expenses (certain staffing positions paid out of other budgets) or a weaker net because they are covering institution costs that would exist whether the continuing education unit existed or not (building expenses).
-Your efforts to negotiate is the right direction and I applaud you for realizing the importance of keeping your net. Ideally you would like to have net in reserve of 50% of your annual expense budget.
-I am not sure how much net you are generating or your budget, but if the institution will not let you keep all the net, I suggest negotiating to get 50%.
-If you need more information, let me know what would help and I will see what I can do.