3 Internal Questions for Non-Profit / For-Profit Online Program Partnerships

What every institution should first ask itself.

May 1, 2014

Many of us have been closely following the 2U Semester Online story.

The fact that the 2U and its partners have chosen not to continue the Semester Online program should not obscure the larger story about the growth of not-for-profit / for-profit partnerships in developing online learning programs. These partnerships will continue to grow, as more schools become comfortable with the idea of bringing in a for-profit partner to develop academic programs, and as the for-profit online course development industry continues to consolidate and mature.

For many schools, the option to work with a partner such as 2U or Embanet or Bisk or Learning House or Deltak (who am I missing?) makes good sense.  

A for-profit partner can de-risk the decision to move into new online programs by providing the up-front capital and resources. A for-profit partner may have expertise and scale in nationwide marketing and student recruitment that would be hard replicate. A for-profit partner will have experience in course design and faculty training, and immediately will be able to draw on the assets of existing learning design teams and edtech platforms.   

Spinning up a new online or blended program, usually a terminal masters program, with a for-profit partner involves agreeing to a revenue share. This revenue share will be determined by the size of the up-front investment that the for-profit partner makes, and the menu of services (from recruitment to retention to platforms to course design to student support) that the partner provides. This revenue share may be 70/30 (with the larger number going to the partner), but the school will retain full ownership of the intellectual property produced and full control of the brand.

If your institution is thinking of starting a new online or blended program I recommend that you at least talk with some of the for-profit partners. These discussions will give you a good idea about the feasibility of your plans, as the for-profits will only partner in programs and markets that are highly likely to be grow and be economically sustainable in the long-run. You will also get a clearer idea of the costs and resources involved in standing up a new online program.

Before agreeing to any partnership with a for-profit online learning provider, every institution should ask itself (at least) three questions:

Question 1: How will the new online program advance your institution’s mission?

In my experience the worst possible reason to start a new online program is an expectation around revenues. These programs are rarely cash cows, and expenses (as well as opportunity costs) are always higher than expected. That is not to say that these programs should not be sustainable, and if done well may eventually result in positive economic returns for the institution. Just don’t count on it, and certainly don’t count on it to be quick.

Rather, the best reasons to spin up a new online program have everything to do with mission. Will the program be able to educate students who otherwise would not be able to quit their jobs or move to where your campus is located? Will the program help your institution deepen its skills and expertise in a particular subject area? Will the program provide new opportunities for your faculty? Will the program fulfill an important societal need, and a provide your future students with opportunities that would be unavailable unless the program goes live?

Question 2: Are we committing enough local resources and leadership support to make sure that the project is successful?

Where I’ve seen all sorts of not-for-proift and for-profit educational partnerships fail is where the school does not invest enough resources and leadership support to make the project is successful.  

The for-profit partner will make this point, but it is often inadequately heard and operationalized by the university partner.   

Much of the work in any educational partnership, particularly around a new online program, cannot be fully sourced to a partner. At a minimum, there needs to be a full-time high level person at the university who has the skills, time, and authority to manage the partnership. This partnership management works both ways, as the for-profit company’s work needs to be managed and the interface between the partner and the school needs to be carefully steered.

Even the best for-profit partner will never fully represent the needs of the school.  There is always a gap between what is promised in the courting and contract development phase and what can be delivered.   A person on the university side needs to be responsible and accountable for the success of the program.   This is the minimum requirement, as that person will need to draw on other resources and people at the institution to manage the partnership.  Therefore, the fully loaded costs of the partnership will be higher than it initially appears, and the institution will need to invest the resources (and the leadership authority) to make sure that program can succeed.

Question 3:  What is our plan to develop core competencies in course development and online teaching to our own institution?

The third question to ask is around the sourcing of core competencies. The ability to develop and teach high quality online courses is, I believe, a core postsecondary competency. Core competencies should not be sources. Any agreement to work with a partner should be made with the idea that the partnership will assist in accelerating the development of these core competencies?

Why should online course development and teaching be a core competency for a residential campus? The reason is that everything you learn in developing a good online course can be applied to a face-to-face course. The development process for a well-designed and educationally sound online course will almost exactly match the development process for investing in a residential course. This is particularly true as we work to bring active and experiential learning to large enrollment courses. The competencies, infrastructure, and sets of skills that you will need to develop online courses will exactly match what is needed to develop high quality large enrollment residential courses.

Therefore, any partnership with a for-profit online course provider should be built around the goal of bringing these core competencies to campus. It may be fine to source things like marketing and recruitment, but sooner rather than later the learning and course design tasks (and the digital teaching platforms) should be brought in-house.

What is your experience working with for-profit partners for online program development?

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Joshua Kim

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