What Grantmakers Want From Higher Ed:

with host Dr. Drumm McNaughton and guest Ken Knueven | Changing Higher Ed Podcast 079

Table of Contents

What Grantmakers Want From Higher Ed

Higher education grantmakers are rewarding innovative higher education institutions with grants, and technology innovation, a disruptive force for traditional industries, is now playing a key part of the ongoing and rapid transformation. A growing number of social entrepreneurs within traditional higher education are emerging, which is challenging higher education’s status quo.

Higher education leaders are realizing that technology can help institutions better address the concept of lifelong learning, whether that is preparing for what is coming next in the individual’s life or being able to address disruptive changes such as job loss. When done right, the use of technology can instill a passion for lifelong learning that endures throughout an individual’s life.

Grantmakers Consider Higher Ed Challenges

Higher education is currently facing significant headwinds and grantmakers want to see colleges and universities that are focusing on those challenges to stay relevant. These challenges include:

  • 50 million consumers/earners have $1.7 trillion in student debt, which is unheard of. When the mortgage industry collapsed, the outstanding debt load was less than this amount. 
  • Experts agree that higher education is an industry with poor quality of earnings.
  • Higher education has had nine consecutive years of enrollment decline nationally, which has led to lower net tuition pricing.
  • Colleges and universities are seeing lower student demand. However, many higher ed institutions are relying on current and planned brick-and-mortar buildings, which is creating excess capacity. While COVID had an impact as more students opted for online learning, this disconnect between available and planned facilities and in-person student attendance probably will not change.
  • The Department of Education reports that 1,200 colleges are not financially viable or approaching this status.
  • Consumer behavior is changing tremendously. Potential students are questioning the educational approach to take; they increasingly are migrating from earning traditional degrees and instead are increasingly focusing on getting certificates and credentials.
  • The corporate workforce needs are having a dramatic influence on higher education.
  • Technology is having a huge impact on higher education.
  • New players are coming into the post-secondary space and putting competitive pressure on the traditional higher education model.
  • The current economic model does not support a continuous investment in functional areas that are critical to any higher education institution’s long-term success.


Concerns about higher education extend beyond ideology. There are a lot of mismatches between employers’ needs and higher education graduates’ skills, and the value that degrees provide to the workforce. Many top technology companies are offering and placing more emphasis on certificates and credentials, e.g., Google and 150 of their corporate partners now value several of Google’s certificates more than a 4-year degree. This is a big shot across the bow of higher education.

Corporations also are looking for workers who can read, write, communicate, work in teams, use critical thinking, analyze, and interpret data. Many higher education institutions believe they are adequately preparing students with these skills, but many industry leaders would disagree. This mismatch of opinions about the quality of skills that a student should have upon graduating undermines higher education’s credibility and needs to be resolved.

Employers are facing a shortage of competent workers. At the same time, higher education is being very selective about the type of students they recruit and admit. Individuals of any age or income level who live in the United States who want to learn should have the ability to learn and access to those offerings; however, that often has not been the case.

Transformational Higher Education Attracts Funding

Higher education received significant grants from the federal government’s pandemic financial support packages that came out over the past year and a half. Unfortunately, many institutions are using this funding to go “back to normal.” This is backward thinking; higher education leaders who strive to return to normal and maintain the status quo approach will not be helping their institutions – think Sears and Blockbuster, whose leaders and board members did not feel the need to evolve their business models despite the increasing evidence to the contrary.

The world has been completely disrupted, something that has been accelerated by COVID-19, and the pandemic has created a new way of working, learning, and interacting in society. To remain relevant, higher education institutions need to be flexible, forward-thinking and embrace these new changes and norms to attract grantmakers. 

The north stars that higher education should be striving for include:

  • An individualized pathway to learning. Maintaining a one-size-fits-all approach to providing an education does not work anymore.
  • New markets. Approximately 70 million individuals have a high school degree or part of a higher education portfolio; these individuals will not benefit from this old approach.
  • Access to postsecondary education and learning. This includes providing education for every individual, no matter age or income level.
  • Students should not have to take on a large debt load to get a higher education.
  • Quality of education. Higher education should focus on creating a high quality of education that is measurable and agreed upon.
  • Institutions that pride themselves on selectivity are going to be disrupted by institutions such as Arizona State University, Southern New Hampshire University, Western Governor’s University, as well as social entrepreneurs at places like Coursera and EdX.


Higher education institutions have an opportunity to thrive, as long as they transform. To create this desired state, institutions need to develop pathways to serve a wider range of student groups, including finding ways to serve non-traditional students who need a different kind of support. This is especially true for those faced with job loss due to economic turmoil. For example, Sweden’s citizens know they will have the opportunity to get education to retool their skills if they lose their jobs. The United States does not currently have this type of educational system – they prefer to give unemployment for a short period of time and then it is up to the displaced worker to retrain themself.

To stay viable, higher education leaders also need to focus on their institutional costs. Costs must be reduced, but cost-cutting is not a strategy and in and of itself will not lead to prosperity and growth.

The bigger issue involves addressing declines in enrollment. For example, leaders could consider how an institution could change its model to position itself to serve those 70 million potential students who only have a high school degree or a couple of college credits. Instead of looking at the traditional ranking system, higher education needs to look at its audience and consumers differently.

The Gates Foundation and the Postsecondary Value Commission recently released a report entitled “Equitable Value: Promoting Economic Mobility and Social Justice Through Postsecondary Education” that redefines the value of higher education in terms of economic outcomes for students earning degrees and certificates. Those outcomes include earnings after college, the ability to repay debt, and economic mobility after college. This makes it even more imperative for colleges and universities to educate students to become lifelong learners and make their education more relevant.

Leaders also need to look at innovative and viable revenue streams.  They need to consider where to invest, especially in identifying how technology can be an enabler for the institution.

Recommendations for Higher Education Leaders

  • Technology is crucial because of its disruptive capacity. Higher education should not ignore this or else other institutions and/or social entrepreneurs will make the institution obsolete.
  • Higher education should figure out how to embrace technology as an enabler.


Dr. Drumm McNaughton provides strategy and change management consulting for higher ed institutions. 

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