My Twitter feed exploded this past weekend with the news that the funding for Stanford University Press was in jeopardy. While the exact details of the situation remain incomplete, it appears that the Press has an operating loss of $1.7 million on revenue of $5 million — that is, its total expenses are $6.7 million, with the university picking up the difference between expenses and earned revenue. Apparently the Press had requested that a subsidy of that size continue in the coming years, but the administration determined that the money was better spent elsewhere. While the university is not shutting the Press down, getting the Press to break even is going to require not so much Hercules as Merlin. Academic book publishing is a challenging endeavor, and few presses manage to do it profitably. The decision by the administration is a matter of setting and enforcing priorities. While it is uncomfortable to ask this question, where does a press sit in the priorities of its parent institution?

Before getting into some financial and strategic issues, I want to be clear that no one is a bigger supporter of university press publishing than I am. It’s the best publishing in the world, as even a casual skim of the catalogues of the presses demonstrate. Stanford’s book program happens to be among the very best of them, and to contemplate its retrenchment is painful. I would like to see things go in the opposite direction, with universities significantly increasing their investments in publishing. Different people will set different priorities, of course, but I would have hoped that the Press at Stanford would have been the last place to look for cost containment. Nobody has asked me where to find the money by making cuts elsewhere, but, good heavens, I wish they would.

Part of the problem of working to support university press publishing is that the nature of the financial situation is misunderstood. For example, Stanford has a huge endowment, in the tens of billions of dollars, so why cannot a measly $1.7 million be found somewhere? Unfortunately, an endowment is not a bucket of cash that can be tapped at whim. Universities (and not-for-profit institutions in general) have guidelines for how much can be taken out of the endowment in any given year. Typically, that amount is set at around 4% of the total endowment, meaning that a university with an endowment of $1 billion can withdraw $40 million a year to cover its various programs. (Prospective retirees will be familiar with this line of thinking as they try to determine how much money they will have to live on after they stop working. The answer is about 4% of total savings each year — plus pension and Social Security benefits.) For Stanford to cover the Press’s operating loss of $1.7 million every year (assuming that the Press does indeed need that much money), the amount in the endowment to support that has to be 25 times that amount–because 4% is one twenty-fifth of the total. For Stanford University Press the figure comes to $42.5 million. That number is likely to give everybody pause.

But it will be objected (and it has, all over Twitter) that Stanford could simply use some of its endowment directly. No, it can’t, and the reason is that the endowment is already spoken for. University budgets are put together with a forecast of expenses. The department of history costs money, and a significant portion of that comes from the endowment. Ditto the departments of biology, urban studies, and computer science and such costs as grounds maintenance, campus security, technology licenses, and all the administrative staff to support these things. A university’s CFO, like CFOs anywhere, has a number of revenue streams to draw on (tuition, grants, student fees, sales of sweatshirts, and much more), but without a huge — and committed — endowment, an institution like Stanford could not survive. In the end, Stanford — like Harvard, Yale, Princeton, and other richly endowed institutions — has to set priorities as to where the large but limited sums can flow. For Stanford this year, that money ran out before it reached the Press. This is a terrible development, but if the shortfall were not at the Press, it would have been somewhere else. In the news about the Press, it has been mentioned that the money could go toward graduate fellowships. Assuming that is true, who would want to deny a graduate student a fellowship?

The problem for almost all university presses is that they simply do not rise high on the list of priorities of their parent institutions. I think that is a mistake on the administration’s part, but there you have it. This means that for a press to work to survive and even flourish, it has to develop a strategy that gives it a higher priority for the university administration, or it has to develop other means of support. The dangerous thing is to rely on the good intentions of the administration even as one department head after another steps into the provost’s office asking for money. Do you want to turn down the bigshot head of the genetics department, whose researchers have been whispered about as candidates for a Nobel Prize? How about the heads of computer science, data science, physics, and chemistry, all of whom have been bringing in large grants that supplement the income from the endowment? It’s relatively easy to say no to a publisher.

The unfortunate truth is that indignation is not a business strategy.

When university presses work on their strategic plans, that is what they have to do: ask first how to become more important to the parent, and then ask how to become financially independent of the parent. A press that has a profit of 1% — nothing really — is not going to be the target for cuts. A press whose program is integral to some of the key research centers on campus will have some heavy hitters to go to bat for it. One of the saddest things about the situation at Stanford is the outrage of faculty members who support the Press — sad because the anticipated budget cuts not only go to the Press but also silently make a statement that the fields of interest to these faculty members are of relatively low priority. In a big family who wants to be the least-loved child? The unfortunate truth is that indignation is not a business strategy.

If Stanford University Press were to be given a stay of execution, the question is what it would do with the time. It has to direct its energy at the two targets: centrality to the university’s priorities and financial independence. The outcome of this exercise might be to ask for even more money, not to cover current operating expenses but to invest in new programs. Should the Press get into journal publishing or database publishing? Is it publishing in fields where overall growth floats the fortunes of its books? Does it have a convincing vision for the future of publishing and the role it wants to play? I hope the Press will be able to answer these questions (and has the time to work on them) and that the next iteration of the Press’s strategy will represent a progressive and robust enterprise. It would be wonderful to wake up one day and hear the provost talk about the strength of the university, beginning with its eponymous Press.