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Michigan State UniversityLyman Briggs College
LBC Dean's Financial FAQ
E.H. Simmons, Dean of Lyman Briggs College

 

Current topics:

What kinds of funds support LBC operations? The Flavors of Money

At what times of year does LBC receive funding? When the Dollars Flow

Should I spend out every dollar at year's end? Closing out the Ledgers

What is the role of grant and IDC funding in LBC? Direct and Indirect

How can I persuade LBC to give financial support to my project? Asking Effectively

How can I collaborate with LBC's Development & Alumni Relations Office? Advancing LBC

What is the financial model for LBC Study Abroad? Off-Shore Finance


Send questions or requests for coverage of additional topics to esimmons@msu.edu




The Flavors of Money

The Lyman Briggs College budget comprises several streams of funds with different sources, durations, and restrictions. Here, in brief, are a few of the most common. See also When the Dollars Flow.

By duration:
  • Recurring [R]: Funds the College can count on receiving every year. This term is most commonly used to refer to funds the college receives from the University as part of its "recurring base budget," the ongoing source of most of the College's money. But it also describes funds that become available each year as interest is paid out from endowments. Long-term expenses, such as salaries of regular employees or maintenance contracts for equipment, are normally paid from recurring funds. The College only contracts new long-term obligations if it has the recurring funds to meet them.
  • Non-recurring [NR]: Funds the College receives on a one-time basis (or for just a few years). This term is most commonly used to refer to funds the College receives from the University to cover an unusual expense such as bridging funds for a new hire. It also describes funds that become available through a one-time gift to the College or because a project has brought income to the college in a given year. NR funds are used to meet one-time expenses.
By source:
  • General Fund: University funds derived from sources such as tuition and state support. These funds provide most of the College budget and may be used to support any of the functions of the College, with very few restrictions.
  • Development Funds: Money donated to the college by alumni, friends, foundations, or corporations. This money may be unrestricted (i.e., available for most purposes) or may be directed by the donor to support particular kinds of expenses. It may take the form of an endowment, whereby the principal is untouchable and only the interest can be spent; or it may be an expendable gift that should be spent in the year it is received. Note that if development funds are used to pay someone's salary, then the College must also pay for their benefits. Thus, the most efficient salary use of development funds is to support undergraduate employees (who do not receive benefits) or graduate teaching assistants (whose benefits must be paid by the college no matter what the funding source). See also Advancing LBC.
  • Grant ("direct cost"): These are funds, typically from an external source such as the NSF, NIH, or EPA, that are provided to the University to support a particular project undertaken by particular faculty or academic staff. The funds sit in a College account, but may only be used for the one project, not to support general College activities. If a grant pays someone's salary, it must also pay for their benefits. See also Direct and Indirect.
  • Indirect Cost Return (IDC): Many externally funded grants provide not only the "direct cost" grant funds described above, but also provide the University with support for the "indirect costs" of maintaining a research environment. These are typically about half as large as the direct cost of the grants. The College receives 20% of these indirect cost funds (pro-rated by the degree of involvement of LBC faculty in the grant and their appointment fractions in LBC). According to LBC policy, half of its IDC funds go to the faculty associated with the grant and the rest remain with the college. All IDC funds used by the College are supposed to be used to support research; for example, the college's share is often used to support pilot research projects, student research, and matching support required by some external grants. See also Direct and Indirect.
  • Entrepreneurial: Offering certain special types of courses (e.g., Virtual University or Study Abroad) can bring separate income to the College. The rules governing how much income accrues to the College and when it reaches the College are complex, depending on factors such as where and how the course is taught, whether the students are from MSU or not, the number of credits offered, and so forth. See also Offshore Finance.
  • Capital Budget Funds: Money that may only be used to finance the construction of new facilities, renovations and deferred maintenance. Typically involves very large-scale projects. Capital projects are typically planned many years in advance and involve entities beyond a single College.
  • Auxiliary Enterprises: A university budget usually includes numerous self-supporting and auxiliary enterprises that generate revenue to support their own operations (examples include student housing, intercollegiate athletics, and dining services). These areas tend not to receive any state-supported revenues or tuition dollars.
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When the Dollars Flow

Support for certain purposes becomes available to the College only at particular times of year. Being aware of this can help individuals or disciplinary groups plan budget requests and expenditures effectively.

  • General Funds: Each February, the University asks the College to submit a budget request for the following year. This is our chance to ask for new funds for new projects or for increased support of a recurring expense such as GTA salaries. We submit the request in early March, have a meeting with the Provost in April, and learn our new budget in July. Most funds are available for use in July, but some do not reach the College until September.
  • Salary Increases: These occur once per year, at a time that differs for employees in different classifications. For instance members of the Clerical/Technical union receive increases in spring; members of the Administrative Professional union receive increases in fall. For faculty, the system is more complicated: the university informs the College in July of the amount available for faculty raises and the rules for distributing the funds; by August, the Dean must submit a raise list to the Provost's office for approval; the raises then appear in October paychecks.
  • Educational Technology Funds (TLE): Each January, the University asks the college to submit a quest for educational technology funds for the next academic year. We submit the request in February, learn the likely outcome in May, and receive the funds in July. These funds cover computers and durable equipment (e.g., spectrometers, air tracks, gel electrophoresis setups, projectors) for our classrooms and teaching labs, along with the computers we use to prepare teaching materials. These funds do not support technology for purposes other than education.
  • Indirect Cost Return Funds (IDC): The University tracks how much was spent on each externally-funded research grant during the one-year period March 1 - February 28 and uses this to calculate how much IDC is due to each college. The college receives its IDC share information in April for the full March-Feb period just completed; the funds are transferred to the College in July. These funds must be used to support the research mission of the College. See also The Flavor of Money and Direct and Indirect.
  • Study Abroad Funds: If a study-abroad course results in profits that come to the College, they are received by the College one year after the course was offered. For example, profits from our summer 2009 courses would be received in fall 2010. The College uses these funds to support the faculty, students, and programs of LBC Study Abroad. See also Offshore Finance.
  • Virtual Course Funds: If an online course results in profits that come to the College, they are received by the College one year after the course was offered. For example, any profits from a summer 2010 online course would arrive in fall 2011.
  • Endowment Interest: This may become available yearly or quarterly, depending on the details of the endowment. The College is generally expected to spend this income in the year it is received, for purposes consistent with the terms of the endowment. LBC can also choose to reinvest the income to increase the principal. See also Advancing LBC.
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Closing out the Ledgers

When should you make an effort to expend all available funds in a particular budget line before the funding period expires?

Before you ask yourself that question, first answer these two:
  • Have you checked with the LBC budget officer to make sure the account really contains unencumbered funds and verify how much funding remains? Always start here, since overspending has bad long-term consequences for you and LBC.
  • Have you allowed enough time to complete the purchase (e.g., some purchases must go through a bidding process)?
If the answer to either is "no" then no further purchases from that fund are possible.


Assuming that funds remain and you have time to spend them, next consider the type and source of the funding [see also The Flavors of Money]:

  • Some funds are made available on a one-time basis for a special purpose and will not remain with the College after the funding period expires. These include grants or TLE funds, for instance. If these funds are not spent, they revert to the original external source. Hence, if there are important goals associated with the original funding purpose that can best be met by expending the remaining funds, do so.
  • Other funds, such as the College's recurring base budget that supports most College functions, remain with LBC year after year. If Briggs does not spend its entire recurring budget in one academic year, the left-over funds can generally be "carried forward" to the next academic year. This helps the College cope with a wide variety of special or unanticipated expenses, ranging from replacement instructors for parental leaves, to sudden mid-semester equipment failures, to extremely popular courses needing extra ULA's. Hence, the funds remaining in a course curriculum budget at semester's end may often do the most good by being swept back into the College's general funds account.
A few (hypothetical) scenarios:

  • The chemistry curriculum budget has $2000 remaining in April 2015. The faculty determine that replacing the glassware broken by students over the last three years would cost $2000. Glassware stores are depleted and not replacing the breakage will likely cause shortages in the fall as new students drop beakers.
    • Recommendation: Purchase the glassware.
  • The biology curriculum budget has $1000 remaining in April 2015. The existing lab equipment is all in good working order. The faculty realize that a newer type of widget costing $800 would allow them to add a new module to the curriculum in spring... but no-one has yet promised to develop the module.
    • Recommendation: Ask the Dean's Office to encumber $800 of carry-forward for the new widget, to be purchased in fall 2015 if the new module is actually being developed for trial in spring 2016. Let the other $200 migrate back to the College's general funds account.
  • The math curriculum budget has $1200 remaining in April 2015. The computers in the high-tech math teaching lab are getting old and will likely need replacement in summer 2016. The faculty consider purchasing one new computer now.
    • Recommendation: Let the $1200 migrate back to the College's general funds account. Ask the College to include funding for the new teaching-lab computers in the spring 2016 TLE request; such requests generally have high priority. Funding would then be available in 2016 when needed.



Direct and Indirect

The role of grant funding and IDC within Lyman Briggs has several components:

How much external grant funding is each faculty member expected to bring in?

Part of the answer is that each faculty member should bring in the external funding required to support an excellent scholarly program in their discipline. For example, if they need to purchase equipment or hire postdoctoral fellows to conduct lab-based research, those needs should be met from external research grants. Or if their scholarship involves working with undergraduates in the summertime, then obtaining an external grant to start an REU program could be very appropriate.

Another way of framing the answer is that faculty should always seek available external support for any part of their mission as educators. Internal MSU research funds are available only in the context of "bridging funds" to help establish a new research thrust or cover a gap between grants, or for scholarly areas for which few-to-no external grant sources exist. As the university budget is squeezed, internal funds to support educational innovation are severely limited. Hence, the recent trend whereby LBC faculty have obtained external funding for collective educational projects such as the BRAID, the mathematics REU, and the S-STEM program (and have pending applications for numerous other such projects) is extremely positive and appropriate.



How does obtaining external grant funding benefit the College?

External grant funding principally benefits the College through the support and success enjoyed by the faculty who receive the grants. When the faculty do well, so does the College. External grant funding can enable the faculty to be more productive in their own scholarship and make progress towards tenure or promotion. Collective external funding for pedagogical innovation can enable teams of LBC faculty to advance the educational mission of the College along multiple axes. At the same time, the College's success in obtaining external grants is used as a metric in University evaluations of LBC, and this directly impacts our success in obtaining certain kinds of funds from the University.



How is grant funding used within the College?

The grant funds proper (often termed "direct costs") are provided to the University to support a particular project undertaken by specific faculty or academic staff. The funds sit in a designated College account and may only be used for this project, not to support general College activities.

Many externally funded grants provide not only the "direct cost" grant funds described above, but also provide the University with support for the "indirect costs" of maintaining a research environment. These are typically about half as large as the direct cost of the grants. The College receives 20% of these indirect cost funds (pro-rated by the degree of involvement of LBC faculty in the grant and their appointment fractions in LBC). According to LBC policy, half of its IDC funds go to the faculty associated with the grant and the rest remain with the College. All IDC funds used by the College are supposed to be used to support research; for example, the College's share is often used to support pilot research projects, student research, and matching support required by some external grants.

While IDC funds are available to the College to support research-related purposes, it is important to note that any given grant brings a limited amount of IDC to LBC, as the following example illustrates:

Suppose a single PI who is appointed 100% in LBC gets a $900k grant payable as a total of $300k/yr for 3 years.

  • The portion of this grant that comes to the University as IDC is ~ $300k.
  • Of that, LBC gets 20% or $60k.
  • Half of this amount returns to the PI of the grant and half, or $30k, stays with the College to be available for research-related purposes.
  • This $30k will reach the College in yearly installments (received each July). In this example, there would be three yearly installments of about $10k each, depending somewhat on exactly how and when the PI spent the grant funds.
  • However, most LBC faculty have at least a 25% joint appointment in another unit and most tend to receive multiple-PI grants. So this estimate actually overstates the likely IDC revenue to LBC.

While limited in size, IDC funds are extremely valuable to the College because they provide the ability to support new scholars and new scholarly endeavors.


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Asking Effectively

Every year, LBC faculty, staff, and disciplinary groups make requests to the Dean's Office for funding of a wide range of programs, equipment, and events. Here's how to make these requests persuasive:

Explain why you think that supporting this endeavor is in the best interests of the College as a whole (as distinct from the interests of the individuals making the request).

Be specific about what is being requested and when [see also The Flavors of Money]
  • In-kind contributions? Money?
  • Recurring or one-time support?
  • Full or partial funding of the effort?
  • Are other units contributing?
  • Are there deadlines?
Provide context for the request:
  • Why is the need arising now?
  • How was this function supported in the past (or is it new)?
  • What are the longer-term prospects or implications?
  • Is this related to a submitted or planned external grant proposal?
Include specific data that supports the need for the request:
  • If asking for funding to pay personnel, be very specific about the role(s) the person will play and explain why current personnel cannot cover that role.
  • If the request relates to increased course enrollment, give complete information about that course in the current year and in 1-2 past years to set the context.
Please note: Simple appeals for a restoration to past funding levels are unlikely to be compelling unless they explicitly address any overall University and College budget cuts that have occurred in the meantime.



Advancing LBC

Your engagement with LBC Alumni Relations and Development (aka Advancement) is extremely important for the college and our students. Danielle Parish, LBC's Advancement Officer, welcomes the opportunity to collaborate with faculty and staff on communicating the most exciting accomplishments and aspirations of the college to our alumni, donors, and friends. Please let her know about your accomplishments and aspirations, and what kinds of alumni involvement or donor support might lead to even greater achievements in the future.

If you receive a grant, publish a book or major article, have a media interview, win an award, or teach a special, unusual course, tell Danielle. Our alumni and friends love to stay informed about the exciting things going on in LBC. Danielle's office publishes on-line and hard-copy newsletters throughout the year, as well as maintaining an extensive news listing on the alumni website.

If your recent topics course or scholarly work may be of interest to a foundation or corporation, tell Danielle. The College is very interested in building strong relationships with external partners, and these often start by identifying specific projects on topics of mutual interest. Your recent article, senior seminar, or student event may be the link that starts a productive conversation with a new partner.

If one of your students has significant need for a scholarship, tell Danielle. She has the most up-to-date information about what scholarships are available and which new ones are coming on-line soon. On occasion, he has been able to arrange one-time scholarship support to help students undertake unusual educational opportunities, such as international research internships.

If one of your students is seeking a research internship, tell Danielle. Her contacts with LBC alumni may help match that student with an internship program in their field of study.

If you realize that certain resources (e.g., major equipment, special materials, new learning space) could truly transform your courses or Briggs's ability to foster student retention and success, tell Danielle. Having this specific information on hand is invaluable as she and the Dean communicate with potential donors about gifts that could have a major impact on Briggs students.

If you would like to make a donation of any size to LBC, tell Danielle. Faculty and staff support of the College is extremely important, not only because of the direct impact each dollar makes, but also because these gifts show a strong community spirit that inspires other donors.

If you are open to involving LBC alumni in a course, program, or event that you are arranging on campus or elsewhere, tell Danielle. And if you have a specific idea about the role they might play, all the better. Many of our alumni have expressed strong interest in mentoring LBC students, offering internships, and otherwise helping the next generation achieve their dreams. But this only works if a course, event, or program is ready to engage these alumni with students --- and if Danielle knows that the opportunity exists.

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Offshore Finance

Faculty and academic staff interested in creating Study Abroad programs are strongly encouraged to work closely with LBC Assistant Dean Philip Strong on constructing a budget plan. The College's Study Abroad program is self-financing, so we can only offer courses that are designed to at least break even.

LBC participates in Study Abroad in two ways. We offer several of our own programs, run by LBC faculty and offering credit for LBC courses. These include our programs in Europe, Nicaragua, and Panama. We also participate more indirectly in other Study Abroad programs by including LBC courses or course-equivalents within them.

The budget of the course has two components: "instructional" costs and other "program" costs that are essential, but not directly related to instruction per se.

•  Instructional costs are literally those associated with providing the courses themselves (e.g., instructor salaries, classroom rental). They are met by the tuition collected for the courses that students take in the Study Abroad program. Any surplus returns to the College as a profit (minus a percentage to the Office of Study Abroad for its development, marketing, and general support services).

•  Program costs are all other costs associated with running the program (e.g., local transportation to field trip sites, lodging). They are supported by a separate flat-rate "program fee" each student pays, regardless of the num dber of credits s/he is earning in the program. Any surplus returns to the Office of Study Abroad; any deficit must be paid by the College. LBC strives to keep these costs as low and predictable as possible.

Our share of any profit or debt from any Study Abroad program scales as the percentage of Student Credit Hours for the program that are actually earned for LBC courses.

LBC will be directing any profits from its Study Abroad programs to support the faculty, staff, and students engaged in Study Abroad. For example, this will underwrite the Study Abroad scholarships the College offers to students and cover the costs of site visits needed to establish new programs.

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