The financial resources required to sustain OER over the long-term will vary, depending on the organizational structure, infrastructure supports, number of course conversions and the course development incentives offered. Before determining the best source of revenue for sustaining OER, colleges should understand the costs associated with these activities, as well as any ancillary course delivery fees that may be assessed.

Colleges should recognize that OER start-up costs may be higher than long-term operating costs. For example, faculty stipends initially paid to convert courses to OER may eventually be phased out. Also, time requirements may diminish as OER expertise grows and policies and procedures are put firmly in place. Financial sustainability planning includes estimating program and course-related costs, as well as exploring potential funding sources.

Estimating program costs.

Anticipated annual program costs should include the personnel expenses (existing faculty/staff and new hires) associated with the program’s organizational framework and the operational and professional development supports previously identified. Any non-personnel operating costs, such as technology, marketing, or communications should also be captured.

Estimating course-related costs.

Course-related costs include faculty time, financial incentives for course development (such as stipends or course releases), post-development reviews and revisions, and vendor fees for OER courseware. These variable costs depend on the number of courses or students enrolled.

Exploring potential funding sources.

Potential tuition revenue recapture (Return on Investment). OER has the potential to generate additional tuition dollar revenue for institutions by improving student retention. Precisely determining the tuition revenue recaptured because of OER may be difficult to quantify and transform into annual budget requests. But evidence that OER has positive financial and non-financial impacts for the institution may provide leverage for securing institutional investments in OER.

Institutional budget support. Campuses that expect to embed OER into existing departments or academic centers would include funding for OER activities in their regular budget process. Budget requests should include adequate funding for faculty and staff to take on new OER-related work, or include expansion funds when capacity is limited.

Grant funding. Numerous WTCS grants can be leveraged for OER creation and adaptation: Perkins V Grants and the Core Industry State Grant. There are also federal grants available to be applied to OER activities, the Title III grant and Open Textbooks Pilot grant. In addition to government grants, there are some private or non-profit organizations that offer financial support for OER such as the William & Flora Hewlett Foundation and Michelson Spark Grants.

Partnering with employers. Leveraging employer partnerships could lead to opportunities for employer sponsored OER. In this partnership, employers would help provide funds to cover the upfront costs of creating open textbooks and content for programs in which the employer needs to hire graduates.

A note on fee structures.

‘OER Course fees’ charge students $10-$20 for each course that has an OER textbook, and this funding is then used across the college to support OER work and adoption of open textbooks. While ‘OER course fee’ models have been proposed at colleges and universities outside of the WTCS, this type of revenue stream is not permissible according to state authority and statutes for program and material fees. Program and material fees are designated for items that are required for students to successfully complete the course. Textbooks are not included in these specific fee structures as they are considered supplemental in which students can choose where to purchase the book and for what price or whether to purchase the book at all. See the WTCS Financial and Administrative Manual and WTCS Guidance on Student Fees for more information.

Bookstore revenue impacts.

The implementation of OERs may have a significant impact on revenues generated by bookstores. Colleges that operate their own stores may see revenues generated by OER courses shrink by 82% to 98% (based on findings from NTC). Mass adoptions of OERs may also reduce overall store traffic and indirectly cause revenues for non-content items to decrease as well. At the same time, bookstore costs may also decrease from efficiencies (anecdotal evidence from Nicolet College). For these reasons, colleges with institutionally run bookstores should consider replacement funding for lost store revenues. It is recommended that bookstores have copies available for purchase for those who prefer a printed copy.

Colleges with leased bookstores are also likely to experience a reduction in revenue. If those reductions are significant, lease operators may request to move to an online-only services model in lieu of a staffed location. Colleges concerned about these impacts should work with their lease operator to estimate the potential loss in textbook sales, the related loss in sales commission, and impact on services offered.