Based in 1957, Cabrini College, a small, tuition-driven Roman Catholic liberal arts establishment situated exterior of Philadelphia, closed final June after offering a yr’s discover of its impending closure. One among at the very least 14 nonprofit four-year faculties that introduced closures in 2023, Cabrini introduced a memorandum of understanding with Villanova College in June 2023, signed a definitive settlement in November 2023 and closed the transaction in June 2024.
By means of this transaction, Cabrini was afforded a last yr of operation previous to closure. Villanova acquired Cabrini’s belongings, together with a 112-acre property, and dedicated to preserving the legacy of Cabrini via commitments like naming its new campus Villanova College Cabrini Campus, offering Cabrini representatives two seats on the Villanova board for as much as two successive five-year phrases, stewarding the Mom Cabrini particular collections and planning occasions for Cabrini alumni.
On this three-part essay, we—Cabrini’s former interim president, Helen Drinan, and former members of the tutorial management group—describe our resolution to hunt a strategic accomplice, the planning that went right into a dignified closure and the methods we supported workers and college students via a mission-driven plan to assist them transition when it comes to their careers and tutorial research.
It was a dignified closing for an establishment that started the 2022–23 tutorial yr dealing with vital obstacles to its survival. Because the college welcomed a brand new interim president, Cabrini’s profile mirrored 5 metrics used to determine rising stress on nonprofit larger schooling establishments with fewer than 5,000 college students.
- Excessive acceptance charge: It elevated from 72 % in 2018 to 79 % in 2022.
- Low yield on provides of admission: It declined from 17 % in 2018 to 11 % in 2022.
- Falling enrollment: 29.3 % decline between 2018 (2,283) and 2022 (1,613).
- Rising institutional assist: Institutional assist awards elevated by about 38 % from 2018 to 2022 ($10,595 per scholar in 2018 to $14,638 per scholar in 2022), outpacing small will increase in tuition. In 2022–23, 39 % of Cabrini’s undergraduate college students have been receiving Pell Grants and 99 % obtained institutional grant or scholarship assist.
- Persistent working losses: Eight years of working losses from 2015 to 2022, ranging between $1.9 million and $10 million, topped off by a fiscal yr 2023 funds awaiting approval that included its highest-ever multimillion-dollar working loss.
Enrollment and monetary working knowledge after all inform solely a part of the story of a troubled establishment. Many management choices remodeled time cumulatively end in these sorts of outcomes. No less than three widespread practices have emerged as essential management traps in larger schooling: nonstrategic launches of initiatives meant to extend revenues or lower prices, constant drawdowns of the endowment to cowl annual losses and accumulation of deferred upkeep. All three of those institution-threatening practices have been occurring at Cabrini over the eight years resulting in the summer season of 2022, once we realized time was operating out.
The Highway to Closure
Sound strategic planning for a tuition-dependent, modestly endowed, indebted establishment like Cabrini relies on selecting alternatives that increase on present experience, require minimal capital outlays and are examined for fulfillment inside a three-year timeframe. At Cabrini, too many new initiatives, properly past historic areas of experience, have been launched within the eight years previous to closure, leading to a laundry checklist of solely loosely associated actions: a focused worldwide scholar recruitment program, graduate on-line schooling, revived grownup diploma completion choices, new doctoral applications, a brand new residence corridor and parking storage, efforts to qualify as a Hispanic-serving establishment, and the start-up of a brand new undergraduate nursing program. All this occurred whereas the college took on further debt for development exercise and used federal pandemic reduction funding to fill income gaps, pushing the establishment to the purpose the place it confronted its largest-ever annual deficit and quickly declining money available going into fiscal yr 2023.
In summer season 2022, Cabrini’s Board of Trustees permitted a four-month funds delay, and the senior management group sought to determine $10 million in income and expense enhancements. In September, the senior management group offered the board with two various paths: 1) a plan to function for three-plus years to evaluate the monetary feasibility of staying unbiased or 2) a plan to search out the absolute best accomplice to assist assist the establishment financially. Previous methods akin to voluntary separation applications, involuntary separations and the hiring of exterior consultants all yielded unsuccessful outcomes and negatively impacted worker morale. One of the best alternatives for sustaining independence concerned rising revenues, lowering prices (with the understanding that earlier makes an attempt to take action have been inadequate), capitalizing on actual property and looking for nontraditional income streams.
The Penultimate Yr
Previous to the choice to shut, whereas institutional leaders remained targeted on staying viable, senior management provided an unique interview to The Philadelphia Inquirer within the spirit of transparency, saying very aggressive organizational adjustments and plans for brand new applications and publicly expressing an curiosity in partnerships. Such an method, we realized, would increase additional questions on the way forward for the establishment: The reality is that when an establishment acknowledges difficulties, questions will proliferate, and it’s best to be clear and open when responding.
As fall 2022 moved into winter, our management group grew to become conscious of three adverse traits: 1) efforts to recruit the brand new first-year class have been falling in need of enrollment targets, 2) new program launches took longer than anticipated, making a lag in new income, attributable largely to diminished advertising and marketing sources, and three) partnership conversations yielded few alternatives severe sufficient to pursue. Two establishments have been significantly contemplating partnering with us, permitting for tutorial and presumably athletic continuity. Nevertheless, in each circumstances, potential accomplice boards decided they have been “unable to purchase Cabrini’s issues” due to its declining money and indebtedness.
Given the route of those conversations, we concluded that the establishment was not financially viable. We decided that the most effective alternative to protect Cabrini’s legacy and guarantee college students, college and employees would expertise a full tutorial yr previous to closure was to readily conform to the MOU with Villanova, the preliminary step towards an asset buy settlement and a swish closure.
Villanova’s strategic route proved key to the partnership resolution. Villanova’s energy as an Augustinian establishment within the Catholic custom aligned fantastically with Cabrini’s heritage, and the missions of each establishments made for fantastic integration alternatives in such areas as immigration, management and providers for marginalized populations. Cabrini’s actual property provided the enlargement alternatives Villanova desired in shut proximity to its fantastically built-out campus. And Villanova’s monetary sources enabled Cabrini to ship a sturdy last yr to all its college students, college and employees, the worth of which is past measure.
The college graduated a senior class in Might 2024, provided placements to each scholar curious about persevering with their schooling and supported its workforce with a mix of job-seeking sources, retention funds and severance, none of which might have been doable with out Villanova’s outstanding engagement. (Half 2 of this sequence offers additional element about Cabrini’s last yr and transition planning.)
A part of why we predict the partnership labored was as a result of we, because the institutional management group, successfully checked our egos on the door. We knew our focus needed to be on what was greatest for the establishment, not our personal private outcomes, to credibly lead the college via closure. A key lesson for different establishments exploring acquisitions or mergers is that the longer term expectations of the sitting president in addition to of board members in a brand new group needs to be clarified early in accomplice conversations; in any other case, private expectations might current an impediment to the transaction’s success.
One other lesson for any struggling establishment is to suppose critically in regards to the sorts of accomplice establishments that may discover you engaging, how a lot leverage you may need and the way a lot you are able to do to reduce your downsides. This isn’t sometimes work you are able to do as you face the specter of rapid closure. For establishments that could be financially secure however are experiencing among the indicators of danger and stress talked about in the beginning of this essay, the duty of thoughtfully figuring out potential companions could possibly be an essential exercise for trustees and senior management groups to pursue.
Editor’s notice: The second and third installments of the sequence might be revealed on the following two Wednesdays.
