Georgia Tech Budget Model

The Hybrid Allocation Model (HAM) is Georgia Tech's approach to aligning financial resources with the Institute's 10-year Strategic Plan. By linking new revenue allocations to growth drivers, the model promotes strategic investment, balances financial control with unit-level flexibility, and enhances transparency to support data-informed decision-making.

How the Hybrid Allocation Model Allocates Funds

The Hybrid Allocation Model (HAM) allocates annual budgets through the general operations pool, comprised of student tuition and state appropriations. This model, used across both colleges and non-college units, blends centralized oversight with decentralized financial management.

Overview of the Funding Process

Initial Allocation: Revenues from state funds, tuition, and other sources are allocated to the Institute using a formula that primarily supports instructional growth.
Centrally Required/Strategic Funding: Before unit-level distributions, the following are funded:
- Must-Pays (e.g., fringe benefits, leases, legal obligations)
- Strategic Funding (e.g., Institute Strategic Plan, one-time investments)
- Institute Reserves for contingencies and unexpected needs
Remaining Funds: After central requirements are met, remaining funds are split equally:
- 50% to Colleges based on:
  - Student Credit Hour (SCH) growth
  - Strategic allocations from the Provost
- 50% to Non-College Units based on:
  - Activity-based drivers (e.g., student/faculty/staff Full Time Equivalent (FTE) or Indirect Cost Recovery (ICR))
  - Drivers are used to calculate annual growth or reduction in funding levels
Indirect Cost Recoveries: Overhead is distributed separately, with colleges getting 30% as per policy, and non-college units’ share based on effort and expense management identified in Georgia Tech’s rate study.

Summary of Funds Flow

This diagram illustrates revenue flow and funding order in the Hybrid Allocation Model.

Hybrid Allocation Model Funds Flow Definitions

Total Allocable Revenues: Units continue to receive 100% of Direct Revenues annually (i.e., OMS, Tuition Differential). Changes in the remaining allocable revenue are distributed based on unit activity to incentivize growth.
Net Tuition: The amount of tuition revenue that remains after institutional financial aid and tuition waivers are subtracted from the total tuition charged. It represents the actual tuition dollars received by Georgia Tech and available for allocation through the budget model.
Indirect Cost Recoveries: Indirect cost recovery (ICR) revenues from sponsored research are allocated separately to better align research revenues and expenses. Funds are distributed to Colleges and Non-Colleges based on an internal rate study. Colleges receive their share per the Institute’s 30% policy, and each unit allocates its portion internally.
General Institutional: Institute wide expenses and strategic requests are the first to receive allocations and are funded as the sum of Must-Pays, Strategic Funding, and Institute Reserves.
Must-Pays: Annual increases in legally or contractually required central expenses such as fringe benefits, legal, and lease obligations.
Strategic Funding: A flexible percentage of revenue growth (Net Tuition, State Appropriations, Other Revenues) used to fund priorities like the Institute Strategic Plan (ISP) or one-time initiatives. The percentage may vary year to year.
Strategic Allocation to Colleges: 15% of the change in Net Tuition and State Appropriations is reserved for strategic investment by the Provost within the colleges.
Colleges: College allocations are based on SCH growth. Continued credit hour growth helps protect against loss and maximize gain.
Non-Colleges: Non-College units are allocated funding-based on changes across unique drivers, such as Indirect Cost Recoveries, and student, faculty, and staff FTE.

Summary of Order of Funding

This graphic shows how remaining revenue growth is allocated: 50% to non-college units (based on activity drivers) and 50% to colleges (35% for credit hour growth, 15% from the Provost's strategic allocation).

Central Funding Levers That Influence Institute Budget

Executive leaders have visibility into which central funding categories are flexible and how adjustments to these levers impact downstream allocations. Leaders retain discretion over how growth or reduction in budgets is distributed across their units.

Strategic Funding

A flexible percentage of the annual growth in Net Tuition, State Appropriations, and Other Revenues designated for Institute-wide strategic priorities
Supports initiatives such as the Institute Strategic Plan (ISP), one-time strategic investments, and emerging budget needs
The percentage can be adjusted annually at the discretion of leadership

Institute Reserves

Funds to cover unexpected expenses or declines in revenue. Reserve contributions are flexible and reviewed annually based on fiscal conditions

Institute Budget Planning & Administration