According to the conference calls, they needed 10-12 million additional dollars per year, every year they stayed open. That’s if (1) their $25 million bond didn’t get called in and (2) they retained as many students as they have now, which they would not if they started a Kickstarter campaign, sold off land, and otherwise telegraphed their dire financial situation. They were not going to raise eight figures in the next few months from their small alumnae base. It’s not a “If everyone gives $20, we’d have it in a day!” situation.
It’s easy to imagine crisis fundraising working, but in practice, it doesn’t usually work. If you say that you’re on the verge of closing, people with real money give less, not more. No one wants to pour investments into a sinking ship.
@Momzie, they could try that, but then the traditional southern upper class that had been the lifeblood of a place like SBC may dry up (they’re traditional and conservative but in a different way). If those students become a large percentage of SBC, the character of the school would change (which may impact alum donations and support).
Basically, for SBC to survive, they would have to massively change, likely in wretching ways, that would make SBC not the Sweet Briar that it is now. And many of those paths would still lead to failure.
I’m sure that the administration at SB explored many possible scenarios to avoid closing – after all, their very jobs were on the line, too. It could be that this brutal closing is, in fact, the most responsible (if painful) fiscal move overall, one that guarantees there’s money left for easing students’ transitions to other schools and giving severances to staff.
The more I read about this, the more I’m curious what their yield rate was looking like. They are/were small enough that a rounding error in the incoming class size at Ohio State could have completely destroyed Sweet Briar—one year of the yield rate being 2/3 of what they’d predicted and it would be over.
@davenmame, I wouldn’t be too worried about Hampden-Sydney because besides being slightly bigger (more economies of scale), being male, they would have richer alums. For example, if you look for SBC and HSC alums on the Bloomberg people directory (which would be a rough guide to the relative number of high-powered alums), HSC has 229 (comparable to Wooster’s 210 and more than Knox’s 126 or Beloit’s 118. SBC has 22.
Once the run on the bank starts, it is tough to stop.
63% average tuition discount and rising. Enrollment yield declining. 84% acceptance rate. 74% freshman retention rate (that’s bad). 57% six year graduation rate (also bad).
Hmmm. Maybe all that stuff that the excoriated USNWR rankings measure do have some validity…? #68 LAC in 2005; #116 in 2015.
Ultimately, the market wasn’t buying what they were selling. That part of the world had a high number of these type of womens colleges, in part because there were a big bunch of corresponding all male schools nearby – like UVA and W&L. There’s by definition less demand for that product today. Maybe there’s not that many girls anymore that want to bring their horse to college.
Presumably they decided some years ago to continue with their single sex brand/product rather than going co-ed (as many other LACs have done). That’s not a bad strategy since it isn’t all that easy to get guys to go to a former girls school. Especially one that is not highly ranked.
If parents/students aren’t willing to pay a sufficient number of tuition dollars, no amount of donations will save you. For the overwhelming number of colleges, it is about the net revenue per student tuition Benjamins much more than the endowment and donation Benjamins.
Here’s how the Bain report defines the kinds of colleges that are at risk. SBC seems to fit the profile very well of a “tuition-dependent private” school that is not so highly ranked.
You might be at risk if….
1.You are not a top-ranked institution.
Your admissions yield has fallen and it’s costing you more to attract students.
Median salaries for your graduates have been flat over a number of years.
Your endowment is in the millions not billions, and a large percentage is restricted.
2.Your financial statements don’t look as good as they used to.
Your debt expense has been increasing far more rapidly than your instruction expense
Your property, plant and equipment (PP&E) asset is increasing faster than your revenue
You have seen a decline in net tuition revenue
Tuition represents an increasingly greater percentage of your revenue
Your bond rating has gone down
You are having trouble accessing the same level of government funding
3.You have had to take drastic measures
You are consistently hiking tuition to the top end of the range
You have had to lower admissions standards
You have had to cut back on financial aid
You have reduced your faculty head count
“The more I read about this, the more I’m curious what their yield rate was looking like.”
They announced it on the conference call. “1 in 5.” They had a successful campaign to attract more and better applicants, but those applicants, once admitted, did not enroll.
Yeah, a 20% yield rate—and, from an article in the Chronicle of Higher Education I just read, other negative markers on the input side (aside from number of applicants, which had gone up). They’d clearly been skating on the edge for a while.
I totally get where the alumnae are coming from when they say, “Why didn’t you tell us things were so dire! You can’t know for sure that we’d fail to come up with the money! We didn’t even get a chance to try!”
But you can’t come back from a public declaration that you’re on the brink of closing – and it would have become public if shared with all alumnae. You’re jumping down the drain at that point. It’s over.
I kind of have a soft spot for them, based on memories of the Preppy Handbook. My D, when she was just beginning her college search and didn’t have a real sense, did an informational interview with them and said they were very sweet and nice. I think it’s hard for any women’s college today to survive without incredibly deep pockets and a strong historical reputation.
It is certain when you have 94 million endowment that you could stay open another year. They could have closed buildings, but with less then 400 students remaining on campus and less than 350 employees, the cost would not have reached 94 million.
“Sweet Briar wouldn’t be saved by dozens of donors. I guess it might be saved by a single donor, if it was a really big one.”
SBC was burning $12 million a year. So you’d need about $150 million of incremental endowment TODAY just to tread water. If the negative trends continue, then you’d need $200 million or more. That’s the kind of money that gets the entire school named after you – Vanderbilt, Duke, Stanford or Rockefeller (Chicago). Maybe Gates College?
Only thing that would save SBC is if they could somehow enroll 100-200 more students year after year, have those students pay more tuition than the current students are paying, and retain those students through graduation.
In other words, customers have to buy what you are selling. Even at “more money than God” schools like Harvard.
That matrix has some strange placements. The University of Southern Maine, which is in financial trouble and has been firing professors and closing departments, is in a “healthy” quadrant, and Amherst is not? I don’t think so.
If Sweet Briar wanted to survive as an independent school, I think they would have had to start by changing their name, going coed, and increasing the size of the student body, for starters.
I am going to say that they had some marketing issues… Both of my Ds applied to a women’s college, but the pink marketing materials from SB were a big turnoff to them, and neither would consider it. I think what older D got was perfumed. It just didn’t appeal to my modern young women… It wasn’t the single sex aspect that bothered them, though.