Alternative Income Generating Activities for Financial Sustainability of Higher Education Institutions

Abstract

The huge increase in the cost of universities are starting to seriously ward off potential customers and alienate the public, whose support of colleges is waning. For the last five years, aggregate universities' enrollments in Kenya have fallen, and alternative Income Generation Activities (IGAs) to supplement the tuition income have become a necessity for institutions to grow economically and be sustainable in their business. This paper aims to examine better ways Higher Education Institutions (HEIs) approach financial management, including HEIs choice in allocating institutional resources. In today’s world, competition is a driving force for innovation and entrepreneurship with higher education not spared to unfair practices. For example, Africa, including Kenya, loses approximately 23,000 qualified professionals to the west every year. This is a theoretical paper; based on financial management theory, that explains the gap between the educational knowledge and business practices in the education industry. An expenditurebased budget allocation model for HEIs' resource allocation is developed as a new financial management framework. It is based on the premise that HEIs exists not only to educate students, but also to contribute to the development and furtherance of knowledge, and contribution to the nation's economic growth in terms of expertise and commercialization of intellectual property; this paper contributes to conversations and policies on financial management practices and alternative IGAs for HEIs.