“Unanticipated financial setbacks sometimes become little deficits. And the response to little deficits can shape the course of a school’s future. What are the options?” Anthony T. Ruger asked this of In Trust readers in the Summer 2018 issue.
Ruger, a researcher, administrator, and consultant who has examined the financial data of every member of the Association of Theological Schools, offers various options for responding to financial stress. These include:
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Enhancing revenue (for example, through increasing enrollment).
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Ramping up development efforts.
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Monetizing real estate/facilities.
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Downsizing (or “right-sizing”) finances.
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Adapting or eliminating existing academic programs.
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Developing partnerships.
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Borrowing (as a stopgap measure).
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Drawing down the endowment (as a stopgap measure).
Ruger indicates that these options may not always be the best choice for all schools and shouldn't necessarily be done in the order he presents them.
To him, the most important advice to schools facing financial stress is: Open your eyes and be realistic.
In addition to this article, the Summer issue includes a “Blueprint for building financial success from financial stress,” a graphical representation of the options outlined by Ruger.
