Generating Discretionary Income in an Academic Department of Pathology

The 2021 Association of Pathology Chairs Annual Meeting included a chairs’ session and a premeeting discussion-group webinar sponsored by the Senior Fellows Group (former chairs of academic departments of pathology who have remained active in the Association of Pathology Chairs) focused on generating discretionary income for departments. Discretionary income was defined as revenue that can be used by the department with few, if any, restrictions. Such income is particularly desirable given limitations on departmental budgets. Four discussion-group panelists presented the funds-flow model in their respective institutions and how they derived and used discretionary income. Discretionary income was obtained from both external sources (eg, philanthropy, indirect cost recovery, partnerships with outside entities, medical education courses, research laboratory agreements, clinical trials) and internal sources (eg, core facilities, institutional programmatic support, institutional incentive programs). Significant departmental variations were associated with differences in institutional financial structure and policies, revenue-generating capabilities of the department and individual faculty, practice plan policies, donor intentions, and geographic market forces. Most finances were dependent upon a robust funds-flow model. Uses of discretionary funds included salary support, recruitment expenses (including start-up packages), research equipment, space renovation, social events, support of academic programs, and travel. Panelists also discussed particular challenges of discretionary-fund generation and use during the coronavirus disease 2019 pandemic. Notably, each institution had its own unique methodology for generating discretionary income, and no obvious standard approach was identified. The 2 moderators emphasized the importance of identifying and understanding opportunities, issues, and institutional culture surrounding generation and use of discretionary funds.