As COVID-19 has led to the shuttering of physical campuses and many institutions are seeing shrinking enrollments this fall, the prediction that Clay Christensen and I made in 2013 in The New York Times that at least 25% of colleges and universities would close, merge, or declare exigency over the next couple decades has felt even more relevant.

Onlookers would be mistaken to assume that Clay and I hoped schools would go under, or that we didn’t recognize the human and community costs as they did so. As we’ve written, we hope that colleges and universities prove us wrong by innovating to survive and thrive. Our prediction is by no means a fait accompli.

At the same time, those who ignore the challenges facing higher education are ignoring the reality of a broken business model for many institutions and the demographic dangers lurking for many, although certainly not all, institutions. And this was before COVID-19 struck and a recession began. To be clear, disruption has not been the major driver of the closures to date.

Small, private colleges are at particular risk. Over the last several years, such schools with a religious orientation have struggled.

What is it like to be the president who closes down such a school? What are the signs it’s time to make the decision? And how do you go about responsibly closing down a school? I interviewed Linda McKinnish Bridges, the president of the Baptist Theological Seminary at Richmond (BTSR) from 2017 until its closing in 2019 and the first faculty member at the school’s inception in 1991 (she served until 2001), to shed light. Our interview has been edited lightly.

Michael Horn: You’ve said that the closing of the Baptist Theological Seminary at Richmond was rooted in a failure to thrive. What do you mean?

Linda McKinnish Bridges: Baptist Theological Seminary at Richmond simply failed to thrive. The reasons are many—a series of financial missteps; a sharp decline in student enrollment; a decrease of ecclesiastical strength and support; a decrease in individual donors and donor support; too much debt from unnecessary brick and mortar; increased competition with approximately 15 theological schools within the progressive Baptist family; strict downsizing of faculty and staff for cost-savings with an end result of a loss of mission and efficiencies; borrowing from the endowment without a clear strategy to pay back the corpus; the impact of the financial crisis of 2008; reluctance to believe in numbers and believing that hope would work as a strategy; and on and on. We spent a lot of time trying to pinpoint the singular reason as if there were one event or one person responsible for the demise of BTSR. In the end, however, the simple reality is that BTSR failed to thrive.

When my dad passed away in 2013, the coroner stated the reason for death as simply, “failure to thrive.” I was angry when I read the report. Distraught by my dad’s death, I wanted a clear, straight-line answer that explained why my dad’s deep laughter, his soulful mandolin playing, his confident preaching voice, would no longer be heard in this world.

I called his personal physician, demanding a better explanation. The only explanation provided in the coroner’s report, “failure to thrive,” seemed so lame. The doctor had no other explanation.

Sure, throughout his life there were lots of times for panic, for ambulances, and emergency rooms. Three heart attacks, numerous black-out spells, skin cancer, back problems, digestive issues—any of these conditions could have caused his death many years earlier. But why now? Why no better medical explanation than simply these three words written in the coroner’s report as the cause of death: “failure to thrive”? 

I would learn later, as the anger surrounding the grief subsided, that the term “failure to thrive” is a common one given to members of the elderly community at the end of life.  While a weakened condition was obvious for Dad, described by a definite loss of weight, decreased appetite, and clear immobility at the very end of his life, no particular cause of death could be determined. The term “failure to thrive” became the only way to describe the situation where no particular causality could be determined.

Horn: What led you to see that the school couldn’t survive?

Bridges: The first clear signal was during the afternoon spent with the CFO in my fourth month on the job. We prepared a yearly report of our finances as required by our accreditation entity. Because of our unstable finances, we were asked to write a report every year to ensure that we had a financial plan to meet the preceding year’s deficits. The question that was attached to the end of the document was, “describe your strategy to repay your endowment.” I asked for more information. No document existed. I called the previous administrator to answer this question in writing. The response was simply there was never any intention to repay the endowment, and they were not under any obligation because of donor’s intent as stated over a decade before.

The reality began to sink in. In order for this institution to survive, the endowment had been used for operations during those lean years, and there was no specified plan for repaying those “loans.”

Yes, there was hope that someday a high-capacity donor would appear and the funds would be returned to the endowment corpus but there was no clear strategy to make that happen. Money from the endowment funds was needed for day-to-day operations and it was “borrowed” against the future.

Michael, you described this predicament clearly in one of your recent blogs, “Why Disruption is Stealing Pennsylvania’s Students,” with this helpful aphorism: “Charging education to the future isn’t changing education for the future.”  Institutions must focus on the latter.  When institutions must borrow against the future over a long period of time in order just to survive, a broken model lurks in the background somewhere.

I began to see clearly that BTSR had borrowed heavily against its future, and the prospects of repaying that loan back to the endowment were really improbable, especially with the other factors weighing heavily in the landscape, such as loss of 60% of enrollment in the last decade; loss of net assets, reduced by $11 million dollars in less than 10 years; annual financial deficit of over $1 million dollars each year; still serving debt on buildings sold at far below the purchase price, and on and on.

The second signal, however, was this simple reality: The expenses exceeded the revenue. The financial model was broken, as you and Professor Christensen would write. In not-for-profit institutions, where the margins for profit are never really wide but the mission is clearly focused, a slow but consistent leak can go on for years without wind down. If leaders are not paying attention to the annual data and the historical trends, the institution can endure year after year of deficit spending before anyone announces the persistent financial bleeding of the institution. 

When I clearly understood that BTSR has been running a clear deficit for over five years, and the deficit in the last five years of over a million dollars each year, I had another deep stomach churn. Those numbers had been there all along but leadership continued to attempt incremental adjustments with small band-aids, such as faculty and staff layoffs, extending hours of operation, austerity budgets, filling staff positions with volunteers, student help, and on and on to try to stop the hemorrhaging. These measures, however, did not work.

The third signal was less clear at first glance but became convincing to me the more I studied the ineffectual model of mission and margin. Education has been built for high mission and low margins, [which] can work, but low mission and low margins—simply unsustainable.

No attempts were made to replace faculty retirements, either the forced or voluntary ones. A full, vibrant offering of courses that revealed the original mission of the school could no longer be provided. The remaining staff doubled and tripled their portfolio of responsibilities, thereby weakening the efficiency of internal operations. In sum, the mission of the school was in severe jeopardy because of the low margins over an extended period of time.

Horn: Were their leading indicators that could have been addressed earlier?

Bridges: A look in the rearview mirror is always 20-20, right? With that caveat, I offer some broad observations.  

The first leading indicator was the school’s mantra, expressed in the early years of its founding, “If you will build it, they will come.” [That] might have worked for a baseball field of dreams but not for a graduate school of theological education in the late twentieth century. Buildings are iconic emblems of an academic institution belonging to the eighteenth century. The seminary-purchased properties, lovely turn-of-the-century buildings that demanded loads of restoration, just when technology was disrupting academic delivery and the neighborhood Blockbusters were closing down.

The CFO finally admitted that “the school bought buildings that it could not fill with money that it did not have.”

The second leading indicator was that the data were ignored. By and large, theologian types are usually not numbers people. However, business principles are necessary, yes, even in theological schools. Watching trend lines did not seem to be important to the leadership. 

Horn: The school saw challenges before you came back as president and made a number of moves. Can you describe some of those and the context in which they were made? Why were they ultimately unsuccessful?

Bridges: The early move was to sell the properties. The bank called in the loan in the second decade of the school’s life. This would prove to be a humiliating move but absolutely necessary to eliminate the debt when the bank called in the loan during the financial crisis of 2008. To do that, several actions had to occur. The first one was a sell—in many ways a fire sale. The seminary was left with only one building and needing to find a home for remaining faculty and students. Renting was the option chosen, with the aspiration that leasing would be temporary and a building program would begin soon on new property.  Still shaped by the early mantra of “buildings bring people,” decisions were made that created even more debt rather than eliminating debt. The selling of property and leasing new property while holding on to the dream of building new property certainly did not stabilize the finances as was anticipated. Rather, the expensive seven-year lease, with the high cost of outfitting a large, expansive warehouse space in an office park, only served to deepen the debt encumbrance at a time of great financial fragility.

The second move was to terminate faculty and staff. Five positions were eliminated. I uncovered a letter from an esteemed professor and generous benefactor, who after hearing that such termination had occurred, warned the leadership that the heart of the seminary, the teaching staff, had been gutted and predicted the unsustainability of the seminary in the future. From 12 tenured faculty to 4, with an increased host of adjunctive support, curriculum suffered. Students suffered as they added additional semesters to accommodate sequential courses offered less frequently each year.  

While this act may have relieved the budget somewhat for a period of time, a donor had to be secured in order just to provide severance packages for terminated faculty so that the school would not have to declare financial exigency publicly.

Members of the staff were also let go. For a season of months, students filled every staff position, from director to clerical assistants, in the institution both as volunteers and low-salary positions. Operations of the seminary suffered greatly. I reviewed file after file from the archives of the Office of Advancement where donors, year after year, complained that they received no reports, no notes of recognition, and no acknowledgments. As we prepared academic transcripts in the wind-down for transfer to a holding institution, we spent hours correcting over 4,000 transcripts that had not been correctly maintained through the years.

These short-term attempts to create financial stability did not work over the long term.  

Horn: In many cases when a college has said it will shut down or seek a merger, stakeholders have managed to keep the school afloat. Many speculate that because schools have alums, they might be different and not close at the rate we predict. Were there members of the community that wanted you or the board to do the same? What led you and the community to conclude there was no other option besides closure?

Bridges: I appreciate those institutions who have been brave enough to declare their financial conditions and the alums have rallied to sustain the school. Sweet Briar in Virginia is a wonderful example. While a noble gesture, unless the financial model is changed, the question remains if the institution can be sustained, even with a large infusion of funds from dedicated alums. In our situation, our alumnae and alumni, over 850 of them, had not been dedicated donors. The tradition had been through the 30 years that alum giving hovered around 5% to 10%. In the end, a group of alums tried to create a campaign to save the school but the final tally was less than 10% of the school’s annual budget. Our alums are ministers typically in the south, not hedge fund masters of the north.

When the financial realities were uncovered in charts and graphs and presented to the trustees by outside accreditation executives, the trustees and I began to realize that the wind down was within a year. However, it was not until we secured legal counsel who reviewed the annual audits and our endowment files, and we were advised by our lawyer that we needed to close within a month.

This was a very painful process. Our constituencies were confused, surprised, and very, very angry.

Horn: Can you speak more about the pain that the closing caused the community? How have you personally grappled with your decision? How did you explain the decision to the community and what are your ongoing interactions?

Bridges: I have been a student of change-management theory—teaching courses on change management at the graduate level, creating bibliographies and reading lists, writing papers on change while a student in business school. I thought I understood the processes of change.

I, however, was not prepared for the tsunami of pain caused by this change from every sector of constituency.

The heuristic device that offered me intellectual space and psychic energy came from Elizabeth Kubler Ross and the stages of grief. I received responses from all five stages almost daily. As leader, I laid aside my own personal grief—I had helped to start this school and I was deeply grieving, too—in order to be present with all of those five stages, with various people at various times, all during the day.

With our transition staff, we discussed strategies of communication during the closing months. We wanted to be clear, singular in message, pastoral, and above all transparent in each communication. We structured nine information sessions via Zoom video calls where I presented the financial realities through a well-used PowerPoint slide presentation, expressed my own sorrow, then took the onslaught of angry and hostile voices.

While the trustees were deliberating these possibilities a few months earlier, members of the staff were silently creating alternative options for the seminary. The first one was to fire the existing president and then run the school with the remaining faculty and staff. At times, I have thought that would have been so much easier for me and I may have just simply said, “thank you” and returned home and to my previous work. This subterfuge continued to strengthen the opposition. I could tell by the line of questioning that much chatter was being led by this defiant group via personal social media pages. A very public line of discourse was conducted on Facebook that we monitored daily to correct false rumors and to show open transparency with our facts.


  • Michael B. Horn
    Michael B. Horn

    Michael B. Horn is Co-Founder, Distinguished Fellow, and Chairman at the Christensen Institute.