This blog summarizes key takeaways from our fiscal resiliency podcast series, episode one.
While COVID-19 has created a challenging time for colleges and universities, the current landscape also positions institutions to evolve and potentially improve their fiscal resiliency.
Resiliency is not just a matter of financial health. It’s a mindset by which higher education stakeholders can position their institution to continue to fulfill its mission while supporting long-term student and institutional success, including fiscal sustainability.
A recent study by The Hechinger Report showed that more than 500 colleges and universities were already showing signs of financial distress prior to COVID-19. These institutions, like many organizations across the country, face serious challenges with no easy answers regarding how to remain viable.
COVID-19 has resulted in complex circumstances for colleges and universities, although fiscal pressures and uncertainty have existed for many institutions for years. Factors such as affordability concerns, decreasing enrollment, increasing operating costs and the ever-expanding nature of higher education service expectations are not breaking news to colleges and universities. However, these pressures, collectively, combined with the uncharted environment created by the global health crisis, mean that now is the time for thinking differently about the “what” and “how” to achieve the institutional mission.
Positioning an institution to survive the current pandemic requires an intentional approach in order to avoid drastic consequences.
The conversations among college and university leaders are more difficult these days. In many cases, after years of status quo decision making, leaders are considering key questions such as:
A unique opportunity in these conversations is that the environment creates an implicit case for change. Stakeholders currently expect colleges, universities and systems of higher education to pursue alternative means and methods for connecting with students, safely engaging the expertise of faculty and enhancing accessibility and programming options. Right now, nothing is off the table.
So, what types of changes are institutions considering in the current environment?
Naturally, with any plans to change and evolve come a list of barriers that get in the way. As leaders reimagine the future, institutions encounter barriers such as:
How do institutions overcome these barriers? Focus on intentional steps and stated outcomes that move them closer to achieving their missions long-term. Change in support of resiliency must consider the bottom line, and more importantly, how a shift in focus, strategic priorities and asset allocations will accomplish the desired student and institutional performance outcomes. For example, if a college must achieve higher enrollment that translates into greater net tuition per student, to what programs does market interest point? What specific academic support components should be embedded to drive consistent gains in student retention within these programs? And which community partners may be better positioned to help support students?
The mindset during this time needs to be, “What are we going to evolve that furthers our vision or positions us more favorably?” not, “What are we trying to eliminate?”
Consider two primary lenses when assessing the fiscal resiliency required to achieve mission resiliency:
The key question: How do we keep an eye on all the drivers of our student and institutional success, ensure approaches to inform our decisions as leaders and help our institution (and its stakeholders) succeed from mission and fiscal resiliency perspectives, both today and into the future?
Arriving at the answer to this question now will provide a big advantage. Gain alignment on what defines success from a resiliency standpoint, the steps necessary to navigate the present and a focus on creating sustainability moving forward.
Higher education leaders continue to navigate the numerous challenges colleges and universities face in the wake of COVID-19. Baker Tilly's Higher Education Fiscal Resiliency Diagnostic is a free, beneficial tool that can help your institution recover from recent events, plan for future institutional sustainability and ensure fiscal and mission resilience.