The issues higher education faces require solutions beyond campus finances. While declining enrollment and rising costs tend to dominate conversations in stressed institutions, there are several strategic and structural changes colleges can make to better navigate uncertainty. These changes go beyond streamlining costs to better build campus resiliency.
Financial stability depends on more than balance sheets. Colleges should think about how they can strengthen their core mission, prepare for disruptions, and rethink how they serve students and communities.
Here are five critical, non-financial best practices that colleges should implement to safeguard their long-term viability.
1) Understand Core Competencies
First and foremost, an institution has to have a deep and objective understanding of its core competencies. Navigating financial stress requires that schools have a nuanced understanding of their strongest assets. They could be:
- Standout academic program(s)
- Prime location
- Specialized facilities
- Distinctive educational approach
- Strong athletic program
These strengths serve as the foundation for allocating scarce resources while also exploring strategic partnerships that can bolster long-term viability.
A comprehensive evaluation should be conducted to objectively determine core competencies, incorporating diverse perspectives, such as:
- Secondary-school guidance counselors
- Faculty and staff
- Prospective students and parents
- Current students
- Alumni
- Industry partners
How a school is perceived from the outside may differ from its internal view, and tapping into these insights can reveal opportunities to refine positioning, enhance marketing, and align investments with what truly differentiates the institution in a crowded and competitive higher education landscape.
2) Develop a Contingency Plan
Institutions often conduct emergency drills to plan for worst-case scenarios. Similarly, a well-prepared college should plan for financial turbulence before it spirals into a crisis. How will a university campus respond to steep enrollment declines, government funding cuts, economic downturns, or rising borrowing costs?
Answering these questions in advance allows leadership to assess their impact on operations and develop response strategies proactively.
A robust contingency plan should account for existential threats, including the possibility that a college may not be able to continue independently. A sudden closure leaves students, faculty, and staff scrambling, while also exposing trustees and officers to potential liability.
Institutions can avoid this kind of chaos by developing structured contingency plans that outline teach-out agreements and/or identify potential merger partners to support current students in completing their education.
Transparent and proactive communication with stakeholders fosters an environment of collaboration and preparedness. A well thought-out contingency plan can build resilience, encourage stakeholder support, and ensure that difficult transitions are handled with care.
3) Investigate Strategic Partnerships
Collaborating with other institutions and organizations can provide much-needed resources and operational efficiencies without requiring a loss of institutional identity. Even in an acquisition, agreements can preserve a school’s legacy within the acquiring institution. Viable options include:
- Consortia: Partnering with nearby institutions to share faculty, libraries, and technology services, can provide an avenue to cut costs while maintaining autonomy.
- Corporate and Government Partnerships: Joint programs, shared infrastructure, and workforce development initiatives can create new funding streams while also strengthening community ties.
- Academic Alliances: Partnering with other institutions to expand or replace programs can reduce costs and enhance the student experience via new offerings.
- Mergers and Acquisitions: Joining forces with a stronger institution can ensure long-term stability.
Before pursuing a partnership, a college must assess its financial runway, timeline, and stakeholder support. Beyond that, a deep understanding of core competencies will allow for an honest evaluation of what they bring to the table. Given the complexity of these arrangements, boards should engage expert guidance to navigate the process effectively.
4) Realign Academic Programs
Academic programs are the backbone of a college’s mission, but maintaining an expansive curriculum can strain resources. Institutions that understand their core competencies can reassess their offerings to align them with student demand, job market needs, and institutional strengths.
The goal here is to redirect resources toward high-impact programs that attract students and prepare them for the workforce, while also streamlining offerings to cut costs.
To achieve this goal, colleges should:
- Conduct a Program Audit: Evaluate enrollment trends, operating costs, and job market alignment for each academic unit.
- Streamline Low-Performing Programs: Consolidate or phase out high-cost, low-enrollment programs that no longer serve strategic objectives.
- Invest in Growth Areas: Expand high-demand fields that align with core competencies, while exploring interdisciplinary programs, certificates, and micro-credentials.
- Optimize Faculty Resources: Encourage shared faculty positions across departments to maintain academic quality while reducing expenses.
A disciplined, data-driven approach to academic offerings ensures financial sustainability without compromising educational excellence.
5) Strengthen Fundraising Efforts
Donors can provide critical financial lifelines during periods of financial distress. Targeted fundraising efforts centered around scholarships, program development, or infrastructure improvements can generate significant contributions. While some institutional leaders fear that financial instability might deter donors, the reality is that many benefactors are willing to step up, if they believe in the school’s plan for long-term viability.
Alumni, in particular, can be powerful advocates. Schools with unique educational models or strong traditions often find that their graduates feel deeply connected and motivated to contribute.
A prime example is Hampshire College, which faced severe financial turmoil but managed to rally donors thanks in part to a passionate fundraising campaign led by award-winning documentary filmmaker and alum Ken Burns. Hampshire’s unconventional approach to education, which allows students to design their own curriculum and chart their own academic path, became a rallying point for supporters who saw its mission as worth preserving.
Retain Professionals to Assist with Implementation
Colleges and universities are complex organizations that require strong, capable leadership to run effectively under ordinary circumstances. However, implementing these best practices, in addition to running a school’s day-to-day operations, is challenging without outside assistance.
Boards and leadership should retain experienced legal and financial advisors who can provide an unvarnished assessment of the college’s financial and strategic reality and can assist with implementing best practices. These experts ensure that leaders fulfill their fiduciary duties and can focus on the day-to-day management of the institution, while providing the guidance needed to enable schools to make strategic, mission-driven choices and implement them. Going at it alone increases the risk that an institution will not be able to transform itself as quickly as is necessary to thrive in this challenging environment.
