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SOU’s Entrepreneurial Revenue Model: An Alternative to Endless Tuition Hikes

Brand Story - University collaborates to build a new fiscal ecosystem for students and the community.

Public universities traditionally rely on tuition and state funding for revenue, presenting an intrinsic dilemma: as funding drops, tuition increases to make up for the loss. Southern Oregon University (SOU) is moving to replace tradition with entrepreneurship, opting for a business model that cultivates industry partnerships to expand the school’s income streams.

According to SOU President Dr. Rick Bailey, the university’s commitment to this pioneering approach is purely student-centered.

DrBailey Winter 2022 004SOU President Dr. Rick Bailey

“State funds vary over time,” he says. “That’s just the nature of state budgets. So, the only other lever that universities can pull is the tuition lever. The more entrepreneurial we can be to diversify that revenue portfolio, the less financial responsibility we put on the backs of our students.”

SOU, a liberal arts university based in Ashland, Oregon, plans to launch innovative, profitable ventures that strengthen the school, the community and – most important – students’ financial picture. The success of these initiatives hinges on partnerships – something Dr. Bailey witnessed firsthand while president at Northern New Mexico College before joining SOU in January 2022.

“In that time, all of the successes we enjoyed, many of which were transformational, happened because we partnered with someone,” he recalls. “I am convinced that for SOU to be successful, all of our initiatives are going to involve collaborations and partnerships – with the government, businesses, community…everyone.”

Meetings with potential partners have already begun as projects take shape. The first is a renewable energy initiative that would make SOU the first university to generate all of its own electricity on campus. It already leads the way, producing eight percent of its own electricity.

In its mission to close the gap and reach 100 percent, SOU is exploring partnerships with solar companies, utility providers, county administrations and tribal entities. Relationships with government representatives also play a role in bringing its renewable energy efforts to life. In a recent trip to Washington D.C., Dr. Bailey met with U.S. Sen. Jeff Merkley and Rep. Cliff Bentz in an attempt to secure funding from President Biden’s Build Back Better Bill, which allocates $555 billion to clean energy and climate issues.

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“I think there are opportunities to connect with federal programs to achieve some of the goals we have,” the SOU president says. “Biden’s infrastructure bill earmarks federal dollars for renewable energy projects in Oregon. As a public institution attempting to become a leader in renewable energy, we should have the opportunity to plug into those resources.”

As one initiative moves toward energy sustainability, another prioritizes fiscal sustainability. A new, on-campus business district plans to house ground-floor retail spaces for small businesses that cater to students, including student-led businesses, startups, community partnership projects and more.

Chosen businesses would enjoy reduced overhead costs and partner with the university to enrich the lives of students, offering services that reflect their needs and lifestyle to create a vibrant commercial center.

In addition to diversifying Ashland’s business portfolio and establishing a robust on-campus economy, the commercial center doubles as a learning lab – providing internship opportunities, student jobs and a real-world model of business innovation.

“We’re creating a new fiscal ecosystem where all these different pieces contribute to a more diverse portfolio,” Bailey says. “All of these things involve calculated risk. As an institution, we need to become a little more risk tolerant, knowing the rewards could be transformative.”

In another prime real estate location on campus, the university is examining unconventional ways to replace an old residence hall complex. A leading proposal allocates on-campus community housing for senior citizens. These resident community members could access university classes and resources, while mentoring, sponsoring and forming an auxiliary team that supports students.

“All of these revenue ideas will have so many indirect benefits, but the centerpiece is student success,” Bailey explains. “This type of entrepreneurial approach has a way of building momentum. The word will get out and, over time, SOU will become known across the U.S. as an institution doing things in an imaginative and innovative way.”

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SOU has already proven its willingness to blaze the trail with its early adoption of Workday, a cutting-edge digital platform that centralizes its HR, payroll, business and student services. As the first university to integrate this content management system, SOU plans to position itself to train the colleges and universities that follow suit. A dedicated entity created from the university’s IT department will provide services focused on helping end users make that transition.

Essentially a university-born startup, this IT spinoff could supercharge the department, attract new talent and further diversify the university’s portfolio.

The pandemic, which halted Ashland’s iconic Shakespeare festival, illustrated clearly the importance of economic diversity within the region. Each of these projects are designed to become sustainable, resilient economic engines for the university and wider community.

“SOU plans to continue the incredible work we all do while understanding the context of the changing environment and staying nimble in order to adapt to it,” Dr. Bailey concludes. “The vision for us moving forward is based on creativity, innovation, entrepreneurialism and collaboration.

 


Brand stories are paid content articles that allow Oregon Business advertisers to share news about their organizations and engage with readers on business and public policy issues.  The stories are produced in house by the Oregon Business marketing department. For more information, contact associate publisher Courtney Kutzman.

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