Remaining Mission-Centered in the Face of Resource Challenges
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1 Remaining Mission-Centered in the Face of Resource Challenges MSCHE Annual Conference Washington, D.C. December 2015 Andrea A. Lex, Ph.D. Senior Vice President for Operations & Chief of Staff Middle States Commission on Higher Education
2 Overview Being Mission-Centered The Context The Responses Less More Tough Choices Risk & Return Being Mission-Centered
3 Mission-Centered Standard I: Mission and Goals The institution s mission defines its purpose within the context of higher education, the students it serves, and what it intends to accomplish. The institution s stated goals are clearly linked to its mission and specify how the institution fulfills its mission.
4 Mission-Centered Standard VI: Planning, Resources, and Institutional Improvement The institution s planning processes, resources, and structures are aligned with each other and are sufficient to fulfill its mission and goals, to continuously assess and improve its programs and services, and to respond effectively to opportunities and challenges.
5 Mission-Centered Standard II: Ethics and Integrity In all activities, whether internal or external, an institution must be faithful to its mission. Standard IV: Support of the Student Experience Across all educational experiences, settings, levels, and instructional modalities, the institution recruits and admits students whose interests, abilities, experiences, and goals are congruent with its mission and education offerings.
6 Mission-Centered Standard V: Educational Effectiveness Assessment Assessment of student learning and achievement demonstrates that the institution s students have accomplished educational goals consistent with their program of study, degree level, the institution s mission, and appropriate expectations for institutions of higher education.
7 Mission-Centered Standard VII: Governance, Leadership, and Administration The institution is governed and administered in a manner that allows it to realize its stated mission and goals in a way that effectively benefits the institution, its students, and the other constituencies it serves.
8 Being Mission-Centered Shapes Who you are What you aspire to be What you offer Who you recruit What you fund Who you are NOT What you DO NOT do How you support students How you govern and guide
9 Context U.S. Population* By 2030: 20% will be 65 or over By 2044: over half will belong to a minority group By 2060: 20% will have been born outside of the U.S. Post-Secondary Population Fewer high-school graduates More high-school graduates less prepared for college More first-generation college students More part-time students *Projections of the Size and Composition of the U.S. Population: 2014 to Current Population Reports. U.S. Census Bureau. March 2015
10 Context The Incoming Class of 2015 About one-third of private institutions missed their goals in the areas of Net revenue Total headcount International students Yield Full-pay students On average, public colleges were less likely to fall short --- Navigating the New Admissions Landscape: How College Enrollment Leaders View the State of Admissions and their Profession. The Chronicle of Higher Education
11 Context Decline in state appropriations Increase in the number of institutions having flat or declining net-tuition revenue More than half of the presidents [surveyed] are confident about the sustainability of their institution s financial model over the next 5 years, but only 39 percent feel that way over 10 years Survey of College and University Presidents. Inside Higher Ed
12 Context Moody s Outlook revised to stable from negative... the sector will neither erode significantly nor improve materially in the next months. Operating revenue growth 3% pockets of stress... will be highest at smaller, regional public universities with less than $500M revenue and small, private universities and colleges with less than $200M revenue. --- Moody s Investors Service. July 2015
13 Responses MORE Identify new student markets Domestic International Grow enrollment Increase tuition discounts New high-demand programs Increase the use of technology Grow alternate revenue streams Less Double down on existing student markets Decrease enrollment Decrease tuition discounts Eliminate low-demand programs Decrease faculty &/or staff Decrease expenses
14 Less
15 Less St. Michael s College, Colchester, Vermont Beginning Fall 2014 planned to enroll 10-15% fewer students. Target 1,850 Reduce discount rate (currently 50%) Develop more credit online classes Focus recruitment on debt-averse families
16 Less Wagner College, Staten Island, New York Fall 2008: 1,924 undergraduates Kept discount at 43% (national average 48%) Focused on selectivity and retention Fall 2015: 1,752 undergraduates First-year retention up from 78% in 2011 to 86% in 2015 Revenue up 1-2% (3% annual tuition increases)
17 Less Wartburg College, Waverly, Iowa Liberal Arts Headcount Fall 2011: 1,800 Fall 2015: 1,537 $3.7 million budget gap Laid off 11 non-faculty in 2014 Proposing to cut the only full-time positions in philosophy, French, and theatre
18 More
19 The Myth of More Budget & Actual FY "x" Support Students Programs Planned FY "y"
20 The Myth of More Budget & Actual FY "x" Support Students Programs Actual Planned FY y FY "y"
21 Market-Smart & Mission-Centered Using margins* as cross-subsidies This is not following the money Within the context of mission provide sufficient margin to support... mission attainment elsewhere, which will leave the college better off over all. *margin = revenue produced cost to produce it Today s Colleges Must be Market Smart and Mission Centered. Zemsky, Wegner, Massy. The Chronicle Review Vol. 51, Issue 45. Page B6. July 15, 2005.
22 More Sharing The Claremont Colleges, Claremont, CA Pomona College (1887) 1,630 Claremont Graduate University (1925) 2,160 Scripps College (1926) 962 Claremont McKenna College (1946) 1,328 Harvey Mudd College (1955) 800 Pitzer College (1963) 1,067 Keck Graduate Institute of Applied Life Sciences (1997) (1997) 191
23 More Sharing The Claremont Colleges, Claremont, CA Established undergraduate & 2 graduate institutions All within walking distance of each other Separate campuses, admissions, administration, students, faculty, & mission Shared library, student health, campus mail, financial and human resources, physical plant
24 More Sharing Five College Consortium, Amherst, MA Amherst College (1821) 1,800 Hampshire College (1965) 1,400 Mount Holyoke College (1837) 2,200 Smith College (1871) 2,600 UMass Amherst (1863) 21,800 undergraduates
25 More Sharing Five College Consortium, Amherst, MA Established undergraduate & 1 graduate institution Located in same general area Separate campuses, admissions, administration, students, & mission Shared library, fiber optic network, audit services, risk management, energy management, transportation services, some joint faculty
26 More Sharing The Quaker Consortium Bryn Mawr College (1885) 1,300 undergraduates Haverford College (1833) 1,194 Swarthmore College (1864) 1,534 University of Pennsylvania (1740) 10,400 undergraduates
27 More Sharing The Quaker Consortium Established mid-1960 s 3 undergraduate & 1 graduate institution Located in the same general area Cross-registration (all) Share majors, minors, campus life (Bryn Mawr & Haverford) Libraries (Bryn Mawr, Haverford, Swarthmore)
28 Tough Choices
29 Tough Choices: Co-Ed Chatham University, Pittsburgh, PA 2015 Wilson College, Chambersburg, PA 2013 Georgian Court University, Lakewood, NJ 2013 Valley Forge Military Academy & College, Wayne, PA 2006
30 Tough Choices Remaining Mission-Centered in the Face of Resource Challenges
31 Tough Choices: Closing 30 Closures 1997 through 2013* *Degree-granting Institutions participating in Title IV
32 Closures 1997 through 2013 Public 4-year 1% Total = 218 Public 2-year 4% For-Profit 2- year 49% For-Profit 4- year 8% Private 4-year 28% Private 2-year 10% --- NCES 2013 Digest of Education Statistics Table
33 Tough Choices: Closing Marian Court College, Swampscott, MA (2015) Founded in 1964 Began offering bachelor s degrees in 2012 Fall 2014 enrollment 266, up from 174 in Fall percent dependent on tuition $530,000 deficit on $3.2 million expenses Tuition $16,500 with 13 percent discount rate No endowment; weak fundraising support Few/no assets ent-declines-drove-closure-marian-court-college
34 Tough Choices: Closing Sweet Briar College, Sweet Briar, VA (2011) 2011 Strategic Plan Sweet Briar faces one immediate and imperative need: to grow enrollment as aggressively as possible without construction of additional facilities. Target: 688 residential; total Sweet Briar s admissions and recruiting strategy needs to be appropriate to a small, highly distinctive, niche educational experience. This strategy needs to assume a highly efficient and relatively narrow admissions funnel. --- A Plan for Sustainable Excellence. April 2011.
35 Tough Choices: Closing Sweet Briar College, Sweet Briar, VA (2011) 2011 Strategic Plan For the next several years, Sweet Briar must juggle competing financial priorities. Maintain support for a high-quality and attractive program Pay down existing debt Restrain endowment spending Increase initiatives to generate non-tuition revenue Incorporate technology into learning spaces as funding becomes available --- A Plan for Sustainable Excellence. April 2011.
36 Tough Choices: Closing Sweet Briar College, Sweet Briar, VA (Spring 2015) Enrollment: 561 Discount Rate: 57% all students (2013) 61.9% first-year students (2014) Endowment: (Most of it restricted) $94 Million FY14 $85 Million FY15 FY15 projected deficit of $2.0 million Therefore: Sweet Briar announced it would close permanently due to insurmountable financial challenges.
37 Tough Choices: Re-opening Sweet Briar College, Sweet Briar, VA (Summer 2015) Virginia attorney general ends restrictions on $16 million of the College s endowment New president and substantially new board Saving Sweet Briar, Inc. agrees to raise $2.5 million by July 2, 2015 $10.0 million more in the academic year Of the 561 students enrolled in the Spring 134 graduated 231 had requested final transcripts
38 Tough Choices: Re-opening Sweet Briar College, Sweet Briar, VA (Summer 2015) Retrieved programs transferred to other institutions & entered into partnerships Saving Sweet Briar, Inc. met its August commitment of $2.5 million Alumnae and other volunteers helped refurbish the campus Brought food service and campus safety in-house
39 Tough Choices: Re-opening Sweet Briar College, Sweet Briar, VA (Fall 2015) Enrollment: Total: 248 First-year students: 38 Endowment: $68 million Debt: $25 million Rejuvenate recruitment efforts Retain enrollment consultant Train alumnae to assist in recruitment Seek international students
40 Tough Choices: Re-opening Sweet Briar College, Sweet Briar, VA (Fall 2015) FY16 budget approved November 1 $29.5 million expense (down from $42.1 million) $31.8 million revenue (down from $37.2 million) 5% endowment spending (down from 10%) Dependent upon continued support from Saving Sweet Briar, Inc.
41 Risk & Return
42 Risk Indicators: Enrollment & Programs Small enrollment Heavy reliance on part-time enrollment Rapid expansion of graduate and certificate programs if not aligned with the academic and financial portfolio -- Securing Tennessee s Future: Learning from Closed Institutions. Higher Education Leadership and Policy Studies, Vanderbilt University. 2013
43 Risk Indicators: Financial Large dependency on tuition Large interest payments Large capital expenses without long-term financial stability Trend of operating expenses exceeding revenues Small endowments -- Securing Tennessee s Future: Learning from Closed Institutions. Higher Education Leadership and Policy Studies, Vanderbilt University. 2013
44 Market-Smart & Mission-Centered It s clear that there will be no return to a simpler era when market forces played a less dominant role in American higher education. When a college or university is wholly dominated by market interests, it sacrifices much of its capacity to serve its public purposes and sometimes even its fundamental mission. Today s Colleges Must be Market Smart and Mission Centered. Zemsky, Wegner, Massy. The Chronicle Review Vol. 51, Issue 45. Page B6. July 15, 2005.
45 Mission-Centered It is imperative that universities become much more focused on creating value from their core. That will require having a clear strategy, streamlined operations, a strong financial foundation, trust and accountability, and a willingness to invest only in innovations that truly create value for the institution. -- Denneen & Detler (2012) quoted in Securing Tennessee s Future: Learning from Closed Institutions. Higher Education Leadership and Policy Studies, Vanderbilt University. 2013
46 Mission-Centered Standard I Mission-defined purpose Standard II Mission-faithful in all activities Standard IV Mission-guided recruitment & support of students Standard V Mission-reflected educational goals Standard VI Mission-sufficient resources Standard VII Mission-shaped governance & administration
47 Thank You Questions??
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