CASH DEFINES SURVIVAL

While demographic, technological and industry changes have been pressuring schools for a decade now, the pandemic has forced many schools into weakened financial positions, especially as it relates to cash available to support operations. Examining IPEDS data from a select group of private not-for-profit institutions between 2015 and 2019, we put forth three major arguments:

1. That the ability of many schools and colleges to cover both direct and indirect expenses through their main revenue source, tuition, has been substantively weakened by the COVID pandemic and the adverse decline in birth rates.
2. That traditional financial reporting and monitoring systems often do not provide enough of an optic into a school's cash position.
3. That CFOs, management teams and boards must improve their focus and understanding of the forces impacting cash flow and cash position.
   While the financial impact of the pandemic might slowly subside, other industry changes and innovations will continue to present disruptive financial challenges. The next tide will certainly flow and the ebb that follows may not be as severe as today's, but it's time now to work on limiting our exposure, for the next tide will inevitably ebb once more.

About the Author

Michael Townsley holds a bachelors degree from Purdue University, a Masters of Arts from the University of Delaware, and a Ph.D. from the University of Pennsylvania. Townsley was the Chief Financial Officer and Senior Vice-President at Wilmington College in New Castle, Delaware. Subsequent to Wilmington College, he was President of the Pennsylvania Institute of Technology in Media, Pennsylvania and a Full Professor of Business at Becker College in Worcester, Massachusetts. Dr. Townsley has authored these books: Crisis in Higher Education, Financial Strategy for Higher Education, Weathering Turbulent Times, The Small College Guide to Financial Health Beating the Odds. Recently, he published a biography of Steve Hannagan, a pioneer in marketing and public relations. In addition, he has contributed chapters and numerous articles on finance, management, IT systems for financial management, and higher education marketing.

Bob DeColfmacker has over 35 years serving in higher education, seeing the industry through the eyes of a faculty member, administrator, president, trustee and consultant. He's a firm believer that higher education boards should help shape the future of their institutions through strong governance and with support to all campus constituencies. In addition to his "time in the trenches", he holds a Master's Degree from The Harvard Kennedy School.

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