Tips for Reinvestment of Fund Balance Returns

As funding allocated in support of higher education in the U.S. has gradually declined in some regions or has remained stagnant in others, there is no doubt that international educators across the country are facing increasing challenges with securing adequate resources. Education abroad directors are assertively benchmarking funding practices and pursuing new approaches to sustain and/or enhance education abroad operations. This four-part series will appeal to those education abroad professionals who are eager to explore entrepreneurial strategies and savvy approaches to maximizing education abroad operational funding.  

By Dr. Anthony C. Ogden, ISA Consultant

Much earlier in my career, I had the opportunity to manage my first education abroad office budget. I had taken budget management courses in graduate school and felt confident in my ability to monitor revenue flows and track monthly expenses. My team and I spent a long time developing our operational budget and I worked hard to ensure we stayed on course. We saved where we could and invested smartly in new opportunities.  At the end of the year, I was pleased to report that we were under-budget and had saved the organization considerably.  Much to my surprise, my boss was disappointed. What could I have done wrong!

What I’ve learned over the years since is that one should budget and plan as accurately as possible, while retaining some degree of flexibility to react to changes and manage the unexpected. Although saving money is not bad, I quickly recognized that underutilized money could have been allocated elsewhere in the budget to advance other priorities. Over-budgeting suggests poor planning – encouraging supervisors to question why the resources were ever needed and, understandably, to become skeptical of future budget requests.

In spite of our best efforts with planning and management, some education abroad budgets will invariably fall over or under our best estimations. Even the most resilient education abroad budget is subject to the vagaries of international programming. Currency fluctuations, enrollment shifts, changes in institutional policies, staff turnover, international emergencies, and much more can quickly throw even the most meticulous education abroad office budget into disarray. Thus, it is important to carefully track revenue and expenses monthly and make proactive corrections throughout the fiscal year.

Most institutions generally have well-articulated financial policies and protocols in place for responding to fiscal year budget losses and returns. In the case of fund balance returns, some institutions may simply allocate any underutilized money back to its central coffers, while other institutions may allow fund balances, either in part or whole, to roll over within the unit across fiscal years, especially because education abroad operations rarely align with fiscal year calendars. What follows are ways some institutions utilize fund balance returns that are allowed to carry forward across fiscal years.


For those primarily self-sustaining offices that are funded through tuition, fees, and external revenue, it is important to maintain financial reserves that allow the office to respond to abrupt shifts in revenue. Even a modest downward enrollment shift, for example, can result in budget shortfalls, which can impact planning, staffing, and momentum. Having a secure financial foundation can prevent potential downward spirals. Centrally funded offices that receive an annual allocation may consider using fund balance returns as a reserve for long-term, strategic planning and related initiatives.


Many education abroad offices maintain a contingency fund account intended for health, safety and security crises. In alignment with peer institutional benchmarks, most institutions will have a targeted contingency fund amount that is maintained over time. Accordingly, a variable contingency fee may be added to student program fees to generate the targeted contingency fund amount. Alternatively, fund balance returns can be allocated to contingency funding, thus minimizing student fees and further abating institutional risk.


While managing the operational budget is an important role for any education abroad director, it is similarly important to never lose sight of one’s most important assets: the education abroad team! Just as it is important to budget for professional development in any given year (Henke, 2014), fund balance returns can be used strategically to support long-term staff development initiatives across fiscal years.


It is essential to periodically review existing scholarship protocols to ensure that recurring funds are being leveraged effectively to enable students that might otherwise self-select out of education abroad, to be able to participate. Fund balance returns can be used effectively to create scholarship opportunities that target specific student populations, particularly those who are traditionally underrepresented in education abroad programming. It may be possible even to position these funds in such a way as to generate matching scholarships with other academic units on campus or even with affiliated provider organizations.[1]

Many institutions today are offering a growing number faculty-directed programs, which, unless customized through affiliated program providers, generally involve developing, managing, and reconciling complex program budgets. Not surprisingly, many institutions are also quickly developing budgeting protocols for such programming. As with any other budgets, these programs can also generate fund balances. Indeed, some programs experience financial loss, which can result from poor budgeting, currency fluctuations, unplanned and un-budgeted activities, etc. Other programs are reconciled with positive balances, which often result from unexpectedly high enrollment, padded budgets, favorable rounding estimations at the time of budgeting, and so on. Although most education broad offices have become increasingly savvy with ensuring, to the extent possible, that faculty-directed programs maintain zero-balanced budgets, some offices still see positive fund balances, even after offsetting budget losses across their broader program portfolio. What follows are some common practices for utilizing fund balance returns from faculty-directed programming.


If, during the course of a faculty-directed program, unplanned savings significantly reduce actual costs, it may be desirable, if not always feasible, to actually refund each participant in equal measure. However, refunds should be issued only after all program costs are reconciled via appropriate institutional financial processes. It may be necessary to determine a minimum threshold that would warrant such refunds as doing so may be overly burdensome, complicated, and costly.


In cases where sponsoring academic units must provide financial backing, it may make sense that these same academic units are allocated, in part or whole, any fund balance returns, provided that all institutional oversight protocols for budgeting and planning were met. If such distributions are to be made, it may be necessary to develop clear and transparent protocols or an institution-wide framework for the use of such funds. Common approaches include; a) creating discipline-specific scholarships in support of education abroad participation, b) offering program subsidies to lower overall student costs on future programs, c) providing funding for education abroad site visits and program evaluations, d) incentivizing the development of new education abroad programs and/or the enhancement of existing programming, and e) covering personnel expenses or other administrative expenses directly in support of education abroad programming.


It is important to remember that the use of fund balances should be primarily in support of the purpose in which the funds were originally gathered and not re-allocated to support operational costs. In addition to creating institution-wide scholarships in support of faculty-directed, education abroad programming, common approaches to using these funds include a) encouraging new programming via program development grants that align with the institution’s overarching goals for education abroad, b) conducting thematic faculty-development seminars, site visits and/or program evaluations, c) offering booster grants for programs that require a financial subsidy to ensure viability, such as pilot programming with controlled enrollments or experiential programs with pedagogical reasons to lower student to faculty ratios, and d) promoting broader program enhancements that target a particular purpose. Program directors can apply for mini-grants, for instance, to offset the cost of an event or activity that supports learning and/or recognition of environmental sustainability. The focus area can even vary from year to year.

It should go without saying that when it comes to handling fund balances, education abroad offices should proceed with caution. It helps to remember that these funds have come from student sources and it is our responsibility as stewards of their investment to budget and plan with the utmost care and attention. When there are fund balances, it is critical that the protocols for reinvestment are clear, transparent and reviewed on a systematic basis for maximum efficacy and impact. It is critical to seek broad input, especially from faculty and administrators, when determining institutional protocols for fund balance management and ensuring approval at the highest levels. After reinvestment occurs, it is equally crucial to develop efficient and consistent accounting records and reporting mechanisms. When reinvesting with clear purpose, strategy, and transparency, fund balances can work to enhance education abroad programming for all.


In July, ISA will be hosting ThinkDen 2018, a unique professional development workshop on the campus of the University of Colorado at Boulder. Modeled as a think tank, ThinkDen will bring together a number of senior education abroad professionals for an interactive forum at which to critique common operational funding models, explore new and alternative revenue streams, and consider new directions in external collaboration and partnership. ISA will subsequently produce a special report as a contribution to the profession, featuring content from ThinkDen 2018. For more information, please click here.


  1. Henke, C. (2014). Managing an education abroad budget. In Wiedenhoeft, Hernandez, & Wick (Eds.) NAFSA’s Guide to Education Abroad for Advisers and Administrators, 4th Edition, 357-375.

[1] Also see, Five Tips for Maximizing your Education Abroad Budget.

Author: International Studies Abroad (ISA)

Since 1987, International Studies Abroad (ISA) has provided college students in the United States and Canada the opportunity to explore the world. ISA offers a wide variety of study abroad programs at accredited schools and universities in 73 program locations throughout the world.

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