Founded in 1957, Cabrini University, a small, tuition-driven Roman Catholic liberal arts institution located outside of Philadelphia, closed last June after providing a year’s notice of its impending closure. One of at least 14 nonprofit four-year colleges that announced closures in 2023, Cabrini announced a memorandum of understanding with Villanova University in June 2023, signed a definitive agreement in November 2023 and closed the transaction in June 2024.

Through this transaction, Cabrini was afforded a final year of operation prior to closure. Villanova acquired Cabrini’s assets, including a 112-acre property, and committed to preserving the legacy of Cabrini through commitments like naming its new campus Villanova University Cabrini Campus, providing Cabrini representatives two seats on the Villanova board for up to two successive five-year terms, stewarding the Mother Cabrini special collections and planning events for Cabrini alumni.

In this three-part essay, we—Cabrini’s former interim president, Helen Drinan, and former members of the academic leadership team—describe our decision to seek a strategic partner, the planning that went into a dignified closure and the ways we supported employees and students through a mission-driven plan to help them transition in terms of their careers and academic studies.

It was a dignified closing for an institution that began the 2022–23 academic year facing significant obstacles to its survival. As the university welcomed a new interim president, Cabrini’s profile reflected five metrics used to identify rising pressure on nonprofit higher education institutions with fewer than 5,000 students.

• High acceptance rate: It increased from 72 percent in 2018 to 79 percent in 2022.
• Low yield on offers of admission: It declined from 17 percent in 2018 to 11 percent in 2022.
• Falling enrollment: 29.3 percent decline between 2018 (2,283) and 2022 (1,613).
• Rising institutional aid: Institutional aid awards increased by about 38 percent from 2018 to 2022 ($10,595 per student in 2018 to $14,638 per student in 2022), outpacing small increases in tuition. In 2022–23, 39 percent of Cabrini’s undergraduate students were receiving Pell Grants and 99 percent received institutional grant or scholarship aid.
• Persistent operating losses: Eight years of operating losses from 2015 to 2022, ranging between $1.9 million and $10 million, topped off by a fiscal year 2023 budget awaiting approval that included its highest-ever multimillion-dollar operating loss.

Enrollment and financial operating data of course tell only part of the story of a troubled institution. Many leadership decisions made over time cumulatively result in these kinds of outcomes. At least three common practices have emerged as critical leadership traps in higher education: nonstrategic launches of initiatives intended to increase revenues or decrease costs, consistent drawdowns of the endowment to cover annual losses and accumulation of deferred maintenance. All three of these institution-threatening practices were occurring at Cabrini over the eight years leading to the summer of 2022, when we realized time was running out.

The Road to Closure

Sound strategic planning for a tuition-dependent, modestly endowed, indebted institution like Cabrini depends on choosing opportunities that expand on existing expertise, require minimal capital outlays and are tested for success within a three-year time frame. At Cabrini, too many new initiatives, well beyond historic areas of expertise, were launched in the eight years prior to closure, resulting in a laundry list of only loosely related activities: a targeted international student recruitment program, graduate online education, revived adult degree completion offerings, new doctoral programs, a new residence hall and parking garage, efforts to qualify as a Hispanic-serving institution, and the start-up of a new undergraduate nursing program. All this occurred while the university took on additional debt for construction activity and used federal pandemic relief funding to fill revenue gaps, pushing the institution to the point where it faced its largest-ever annual deficit and rapidly declining cash on hand going into fiscal year 2023.

In summer 2022, Cabrini’s Board of Trustees approved a four-month budget delay, and the senior leadership team sought to identify $10 million in revenue and expense improvements. In September, the senior leadership team presented the board with two alternative paths: 1) a plan to operate for three-plus years to assess the financial feasibility of staying independent or 2) a plan to find the best possible partner to help support the institution financially. Past strategies such as voluntary separation programs, involuntary separations and the hiring of external consultants all yielded unsuccessful results and negatively impacted employee morale. The best opportunities for maintaining independence involved growing revenues, reducing costs (with the understanding that previous attempts to do so were insufficient), capitalizing on real estate and seeking nontraditional revenue streams.

The Penultimate Year

Prior to the decision to close, while institutional leaders remained focused on staying viable, senior leadership offered an exclusive interview to The Philadelphia Inquirer in the spirit of transparency, announcing very aggressive organizational changes and plans for new programs and publicly expressing an interest in partnerships. Such an approach, we realized, would raise further questions about the future of the institution: The truth is that once an institution acknowledges difficulties, questions will proliferate, and it is best to be transparent and open when responding.

As fall 2022 moved into winter, our leadership team became aware of three negative trends: 1) efforts to recruit the new first-year class were falling short of enrollment targets, 2) new program launches took longer than expected, creating a lag in new revenue, attributable in large part to reduced marketing resources, and 3) partnership conversations yielded few opportunities serious enough to pursue. Two institutions were seriously considering partnering with us, allowing for academic and possibly athletic continuity. However, in both cases, potential partner boards determined they were “unable to buy Cabrini’s problems” because of its declining cash and indebtedness.

Given the direction of these conversations, we concluded that the institution was not financially viable. We determined that the best opportunity to preserve Cabrini’s legacy and ensure students, faculty and staff would experience a full academic year prior to closure was to readily agree to the MOU with Villanova, the initial step toward an asset purchase agreement and a graceful closure.

Villanova’s strategic direction proved key to the partnership decision. Villanova’s strength as an Augustinian institution in the Catholic tradition aligned beautifully with Cabrini’s heritage, and the missions of both institutions made for wonderful integration opportunities in such areas as immigration, leadership and services for marginalized populations. Cabrini’s real estate offered the expansion opportunities Villanova desired in close proximity to its beautifully built-out campus. And Villanova’s financial resources enabled Cabrini to deliver a robust final year to all its students, faculty and staff, the value of which is beyond measure.

The university graduated a senior class in May 2024, offered placements to every student interested in continuing their education and supported its workforce with a combination of job-seeking resources, retention payments and severance, none of which would have been possible without Villanova’s remarkable engagement. (Part 2 of this series provides further detail about Cabrini’s final year and transition planning.)

Part of why we think the partnership worked was because we, as the institutional leadership team, effectively checked our egos at the door. We knew our focus had to be on what was best for the institution, not our own personal outcomes, to credibly lead the university through closure. A key lesson for other institutions exploring acquisitions or mergers is that the future expectations of the sitting president as well as of board members in a new organization should be clarified early in partner conversations; otherwise, personal expectations could present an obstacle to the transaction’s success.

Another lesson for any struggling institution is to think critically about the kinds of partner institutions that would find you attractive, how much leverage you might have and how much you can do to minimize your downsides. This is not typically work you can do as you face the threat of immediate closure. For institutions that may be financially stable but are experiencing some of the indicators of risk and stress mentioned at the start of this essay, the task of thoughtfully identifying potential partners could be an important activity for trustees and senior leadership teams to pursue.

Editor’s note: The second and third installments of the series will be published on the next two Wednesdays.