Foundation Model brings Success

Lüneburg. The positive results are clearly visible ten years after Leuphana University of Lüneburg assumed the legal status of a foundation under German public law. One particular advantage from the university’s perspective is its greater autonomy and the freedom to make its own decisions. It laid the foundation for the university’s successful growth and its distinguished image in the past years. The foundation model has put the university in a position to better build on its strengths, to respond with agility to new challenges and to compete more effectively.

The structural advantages of the foundation model are most apparent in the university’s administration and budget. Leuphana’s greater autonomy and self-determination has led to a dramatic reduction in bureaucracy, so that policy decisions that used to require the State government’s involvement can now be advanced more rapidly. In particular the university’s legal right to make its own professorial appointments has been a substantial improvement. Over the course of the last years, this new ability has been used to speed up the appointment process and find the most suitable candidate for each position. Overall, the foundation model has strengthened the role of the Presidential Committee to such a degree that a professional university management team has replaced the traditional university administration. The university’s management is now responsible for the annual budget, for setting institutional goals, recommending appointments, and the like. The State government did not just pass along responsibilities to the Presidential Committee, it also provided the Committee with the necessary means for carrying out these decisions. The university foundation also makes its own human resource decisions and is therefore free to recruit and develop its own personnel.

Shortly before the introduction of the foundation model that allowed the university to set its own independent and entrepreneurial policies the old Cameralist procedures had already been replaced by double-entry accounting. The opportunities that the foundation model created only reinforced this trend: at the end of the fiscal year, the unallocated portion of the State’s annual funding grant is placed in a reserve fund, so that it continues to be available to the foundation to finance additional projects.  One more advantage: mid-year budget interventions, such as spending and hiring freezes or investment bans, can no longer be imposed. This stabilizes the long-term planning in the academic disciplines and administration.

Both instruments have played an important role in the university’s successful growth and in promoting its educational profile over the last years. Key performance indicators, such as publication and citation indexes, rates of promotion, successful external funding applications, student-faculty ratio, and overall earning trends are evidence of the university’s overwhelming positive growth. These changes when combined with the successful implementation of the university’s curricular education model have allowed Leuphana to establish an impressive public image within Germany, as reflected in the many prizes and distinctions Leuphana continues to receive. Overall, the foundation model allows universities to increase its focus on social problems, to thoroughly explore the potential of innovative ideas, and use both to enhance its position. Leuphana’s newly founded Faculty for Sustainability is an excellent example of such change.

Concerns that the foundation model’s openness towards society as well as business would lead to the university’s dependence on corporations, which in turn would exercise an influence on research and instruction have been proven unfounded. Leuphana actually scrutinizes its business collaborations to ensure that no undue influence is exercised.

When the foundation model was first introduced, it was well understood that the accumulation of an endowment with sufficient funds to support research and instruction would take considerable time. Germany does not yet have the necessary gift-giving and fund-raising culture for such an undertaking. Only by continuing to build on its carefully managed public image can the foundation, in the long run, acquire funds substantial enough to contribute directly to the university’s finances.

Leuphana’s experience shows that the introduction of a foundation model for university governance can provide greater self-determination and open the academia further towards civil society, a move that will secure the viability of universities in the long run.