In 2017, St. Joseph’s college announced plans to suspend operations and ultimately close. I’m sure this is heartbreaking for the current students, alumni, faculty and staff. With that said, the whole purpose of this blog is to ask the question: Could this have been prevented?
In this situation, it appears the signs have been displayed for some time. In 2012 the college was warned about losing its accreditation in 2015 if their financial situation wasn’t improved. There were losses of roughly $1.1M in 2012 and 2013, and $2.5M in 2014 and 2015. Obviously, expenses continued to exceed revenue. All of this creates a drain on cash reserves and can lead to a dire situation.
If you’re still reading this and the leader of a higher education institute, this next part is directed straight at you. I’m sure you have a lot on your plate and there are many things you can do. As one of those things, consider hiring an organization to review your expenses. Obviously, we’d prefer that you hired our team, if not, hire someone. You might be surprised by how it might help your situation.
Inside Higher Ed published an article which further details the situation at St Joseph’s. Through this, we spent some time reviewing their strategic operational plan for 2016 through 2020. There was a tremendous amount of time and energy which included incredibly bright people constructing this plan, but we did not find anything in the plan about reducing expenses. There are only two ways to improve an organization’s financials: Increase Revenue or Reduce Expenses, ideally do both.
Could this have been prevented? Yes, well maybe. We don’t know the full extent of their situation at St Joseph’s, but we do know that hiring an organization like Silverback, who has experience helping universities with cost reduction, is prudent and we believe every organization should hire us!
