Exploration of revenue sources for financial sustainability of a public university in KwaZulu-Natal : a case study of Durban University of Technology

Abstract

Financial sustainability of public universities has been the predominant topic in South African universities since the start of the 2015/16 student protests and the proposal of fee-free education. A concern to universities is that their revenue structure is inadequate for proposed tuition fee scrapping as the government is not consistent in awarding grants. On the other hand, revenue derived from third- stream income is growing at a steady rate. To meet sustainability goals as per the universities’ strategic plans, diversification of revenue sources has been the adopted financing model used widely in the South African universities. However, different countries have different financing practices for higher education; while some rely solely on government funding, others rely on tuition fees and others on third-stream income. This study intended to recommend revenue generation strategies that may ensure the financial sustainability of public universities using the Durban University of Technology as the subject of the case study. The study used a quantitative research approach which included two open-ended questions. The quantitative questions explored funding challenges, evaluation of each income stream, possible recommendations for revenue sourcing for financial sustainability and the existing revenue sources. The two open-ended questions allowed respondents to express their opinions on the subject of this research. The research followed a positivism research philosophy with a deductive approach. The quantitative data collected was analysed using the Statistical Package for Social Sciences (SPSS) (version 26®) and Microsoft Excel, respectively. The study showed that DUT is using a diversified revenue structure, inclusive of first-stream income, second-stream income, and third-stream income. The findings indicated that revenue sourcing is a financial challenge for DUT. This meant that their revenue generation strategies are not adequate. Recommendations suggested by the respondents included developing strategies to enhance third-stream income, debt collection on owed tuition and improving the university throughput rate.