A hybrid RCM model is based on a full RCM model but differs somewhat to provide stability as well as agility. Full RCM is a decentralized budgeting model used in higher education that empowers individual units within an institution to manage their own revenues and expenses. This approach grants more autonomy to colleges, schools, and departments in making budget decisions than a full incremental model, fostering accountability and incentivizing revenue generation. A hybrid RCM model differs from a full RCM in that not all the responsibility for resources is passed to the academic and administrative units. Instead, a hybrid RCM preserves some of the features of the incremental budget model by supporting University-wide mandatory costs (i.e., insurance, utilities, financial aid, etc.), stabilizing budget fluctuations, and investing in University-aligned strategic opportunities while still enabling units to exert more influence over their budgets.

The former incremental budget model distributed funds based on historical allocations. In contrast, the hybrid RCM model ties academic funding to student credit hours (SCH), majors, and research expenditure growth while maintaining strategic incremental funding for administrative units. This approach blends enhanced accountability and responsiveness with incentives for performance, opportunities for strategic funding, and a commitment to CSU’s land-grant mission.

Yes. Many universities across the country have successfully transitioned from incremental models to RCM or hybrid RCM models to align spending more effectively with changing university needs and an evolving higher education landscape. We have engaged with and learned from our peer institutions who have gone through similar transitions. Importantly, CSU’s hybrid RCM model is uniquely CSU’s—meaning the components of our model reflect our institutional priorities and strengths.

The model includes the following funding:

• Undergraduate and Graduate Resident Instruction (RI) tuition from Fall and Spring semesters.
• State Fee for Service funding (FFS).
• College Opportunity Fund (COF) (treated as a mandatory cost offset).

No. Auxiliary revenues (e.g., Athletics, Housing and Dining, Parking and Transportation) are funded outside the hybrid RCM model and will continue to operate as self-supporting units.

The budget model itself does not generate new revenue, but rather is a tool for allocating existing revenue more transparently and effectively. Through the use of performance metrics, it creates powerful incentives for potential revenue growth across the University. By directly connecting resource allocation to unit performance, colleges and departments are strategically motivated to pursue innovative, revenue-generating opportunities that were not encouraged under the previous incremental model. This alignment of incentives positions CSU to expand its revenue streams through new programs, increased enrollment, enhanced research activities, and creative partnerships — strengthening the University’s financial foundation while supporting its mission-critical activities.

The President, in consultation with the Provost/EVP and CFO, will make decisions about allocation of the SAIF.

Administrative units will initially be funded through a strategic incremental process. Over time and with the input and support of individual units, resource allocation will also be informed based on use metrics and Key Performance Indicators (KPIs) that are specific to that unit.

Administrative units that teach for-credit courses will have funding allocated for that portion only through the academic side of the model (e.g., intra-university courses). All other academic functions of the University will be funded through administrative allocations (e.g., Libraries, undergraduate research, the Graduate School).

Yes, this risk exists. But it will be managed through clear academic oversight and review and leveraging existing structures and approval processes (e.g., curriculum committees, etc.). Colleges will be expected to collaborate and not duplicate courses that already exist elsewhere on campus. They will be encouraged to ensure curriculum design aligns with student needs and academic integrity, not revenue capture. We will incorporate learnings from peer institutions who have implemented similar models and will monitor perverse behaviors for early corrective action.

Double majors will be weighted equally with primary majors.

Minors and certificates are not directly included in how revenue is apportioned, but they are indirectly included based on the SCH that will drive revenue to the colleges. The role of minors and certificates may be reevaluated in future iterations of the model.

These components are currently outside the scope of the hybrid RCM revenue pool but may be reviewed for future inclusion depending on strategic goals and model refinement.

No. We conducted the budget model redesign at CSU internally through our established committee structure, without hiring an external consultant. We leveraged our existing partnership with EAB to access their resources, learn about best practices, solicit information throughout the process, and connect with other universities using hybrid RCM budget models. This approach allowed us to maintain control over the redesign process while still benefiting from specialized expertise in higher education budget modeling.

To learn more about the new budget model, you’re invited to attend and view campus information sessions, review materials on the budget model redesign website, and participate in unit-level discussions. Additional training and resources will be made available as implementation proceeds.

CSU community feedback was collected through open forums and listening sessions that occurred throughout the process. The process involved representatives of shared governance groups to enable an inclusive process so we could develop a model that reflects CSU’s values and campus context. Feedback was also solicited via an anonymous form on the budget model redesign website and incorporated into conversations. Members of the Steering Committee also brought back feedback from their units to inform discussion, process, and design.

One of the guiding values of the budget model redesign is to “Foster trust in our fiscal decisions through commitments to transparency, clarity, simplicity, consistency, accountability, and shared governance.” The Steering Committee has worked diligently to enable transparency in the process, including through broad representation of the collective governance structures across campus. The Communications Sub-committee of the Steering Committee has also worked to communicate clearly with campus the nature of the work being done and the proposals they have brought forward. Collectively, since Spring 2024, we have hosted more than 40 campus listening sessions and open fora related to the budget model redesign, with engagement from more than 1,500 members of our campus community. These communications can be found on the Budget Model Redesign’s Updates page. Moving forward, the University will maintain its commitment to regular budget updates through the office of the VPUO/CFO.

Feedback from campus listening sessions highlighted the need for more flexibility. The Technical Committee has developed a proposal to revise the carry-forward process and reduce the pressure to spend funds by year-end. There is an appetite for this kind of change in a way that supports long-term planning and strategic investments while also providing administration with the flexibility that is needed. Any changes to the carry-forward process will balance putting state and tuition dollars to work in support of the University’s mission against the need to plan for the future.

CSU is passionately committed to student success and recognizes the role of high-impact practices and high-quality educational experiences in ensuring our students are successful. We encourage all faculty to consider opportunities to enhance the impact and quality of their educational offerings, regardless of the budget model.

Regarding the model, we must first acknowledge that all our students benefit from high-quality educational experiences, and all units aspire to enhance the quality and impact of these experiences. Lastly, we must acknowledge that the new model will not be perfect, and we must carefully avoid unintended consequences.

The new budget model thus includes safeguards to protect high-impact learning for all our students. For example, a 15% Stabilization and Innovation Fund (SAIF) helps support essential, higher-cost instructional activities. Additionally, the model is not purely formulaic. Instead, college and department leaders are encouraged to be strategic in their priorities and use discretion in how funds are used internally to enable high-quality educational experiences.

A mix of learning experiences is essential to continue to attract students to our programs. While larger class sections have always been part of our strategic mix of course offerings, these alone will not lead to sustained growth. In this sense, good strategic decision making will continue to guide resource decisions through annual planning, college reviews, and leadership oversight. Finally, the model will be monitored and refined over time to ensure it continues to align with CSU’s educational priorities.

CSU’s research ecosystem is currently supported through multiple aligned incentives, including indirect cost (IDC) recovery, dedicated research infrastructure, and competitive internal funding. It will continue to be similarly supported. Maintaining the R1 status of CSU and continuing to support graduate education both remain institutional priorities for CSU. Within the new budget model, the Stabilization and Innovation Fund (SAIF) is also strategically intended to bolster research, support interdisciplinary initiatives, and invest in graduate programs. While the model does incorporate research into the academic allocation, leaders will continue to assess how best to recognize the full value of research and graduate education, also ensuring that CSU’s long-term research capacity is not only preserved but strengthened.

The budget model does not directly influence the hiring processes for faculty or staff. Hiring processes, as they are now, will be closely monitored for alignment with university policies.