Joining Together Catholics Can Compete (by Thomas C. Celli, AIA)

(As published in University Business Magazine)

At every serious college discussion and every week, in many newspapers, the public is advised of the difficult situation facing private higher education and, most recently, the decision by Harvard and Swarthmore to match Princeton’s lead in giving away undergraduate educations to middle and upper middle class families – essentially making the Bachelor’s degree free. Those institutions with endowments exceeding $400-Million are being pressured by their constituents and many in the public realm to give away the educations that those endowments are capable of providing – more opportunity to deserving students of intellectual talent. Congress may enter the fray soon.

Small private liberal arts colleges face an increasingly bleak future without the endowments or the access to capital to compete for the best students. They will be relegated to pursuing lower SAT scores and offering higher and higher discount rates in order to fill seats. It is the opinion of this writer that soon we will see many small, under-endowed liberal arts colleges vanish from the landscape.

The idea set forth in this article emerged from an acquired knowledge of the value of certain assets at private liberal arts colleges that are being overlooked – the value of their real estate. While this proposal centers on five institutions in suburban Philadelphia, the same idea could be applied in suburban Cleveland, rural Pennsylvania and elsewhere where like-minded institutions are geographically close to one another and can follow patterns already established. Specifically I want to propose the possible merger of five Catholic institutions in the northern suburbs of Philadelphia. Having accomplished planning work and architectural design work for several institutions in eastern Pennsylvania, my firm has come to understand the value of the real estate assets that these suburbs provide. If Catholics are to continue to provide a value-centered education and to compete with the highly selective liberal arts colleges then they must take steps now, while some are still financially healthy, to prepare quickly for growing competition. Community Colleges and State System Universities are leading the charge on price while highly selective (rich) schools are making it free. What of those in the middle? What tuition and drop out repercussions will result from the sub prime troubles of Sallie Mae and few large commercial lenders?

Recently the campus of the Episcopal School in Philadelphia was sold for $90-Million – a campus of 30 acres. While this seems an inflated price, all agree that it was worth at least $30 Million. Likewise, The American College in Bryn Mawr, PA, sold a campus of 35 acres for $30-Million. Just averaging these two institutions indicates that an acre of campus land in this area of Philadelphia is essentially worth $1 Million dollars. If we were to consider the Catholic nature of the education offered by Chestnut Hill College, Rosemont College, Cabrini College, Gwynedd-Mercy College and Immaculata University we would realize that all of these institutions, although founded by different Catholic congregations, have the same goal in mind – to provide excellence in Catholic higher education. My suggestion is that these institutions merge. Their campus locations indicate that from Immaculata in the west to Gwynedd-Mercy in the north is only a 25 minute drive with the others all located between, along Route 202 or south of the Blue Route. Clearly the financial health of the 5 varies, as do their academic strengths, but their merger and the sale of appropriate real estate assets, combined with current endowments, could produce a Catholic institution of serious size and economic power.

There is precedence for this idea in what two colleges did in Minnesota, over 25 years ago, what Gannon and Villa Marie did 10 years ago in Erie, PA, and what the University of Detroit and Mercy did a few years ago.

The following simple chart shows the facts about each institution:

Institution Founders Enrollment Endowment Acreage
         
Chesnut Hill College Sisters of St. Joseph 1154 $8,053,000 44
         
Rosemont College Society of The Holy Child Jesus 400 $8,053,000 56
         
Gwynedd-Mercy College Sisters of Mercy 2700 $8,913,000 159
         
Cabrini College Missionary Sisters of the 2000 $17,632,000 112
  Sacred Heart of Jesus      
         
Immaculata University Servants of the 2944 $14,000,000 375
  Immaculate Heart of Mary      

If these five institutions were to get together and form a Catholic University of Northern Philadelphia and sell, for example, three campuses, keeping two for facilities and residence halls, then (using our average cost per acre) they might realize a real estate sale gain of 259 acres x $ 1 Million dollars. Couple that with the five current total endowments of $54,355,000.00, and an institution with endowment assets of $313,350,000 dollars could result. Obviously much study of specific values and facilities would be needed to bolster a decision on what to keep.

Beyond that, merged institutions have realized serious savings in office operations. One admissions office, not five, would be needed and the same for the registrar’s office, the business office and the other “back office” operations. The nine private colleges in West Virginia eight years ago merged their “back office” computer operations and saved more than $1-Million/year per institution. Today that figure would be considerably larger. Is it time for private higher ed to start thinking more like a business?

Everybody that hears this idea thinks it is eminently sensible; however, the alums might revolt. There is no question that small institutions often get their alums to pony up funds to keep the operation going. Small colleges have tremendous tenacity. However, Antioch went away last year.

The simple response would be that the Catholic University of Northern Philadelphia could have within it five colleges, maintaining their names. For instance, the new institution could have the Gwynedd-Mercy College of Health Sciences, the Cabrini College of International Studies and the Rosemont College of Nursing, etc. All of these could be contained within a university structure. With two campuses in operation and shuttle buses running back and forth; and, with housing and academic opportunities at each campus, a thriving institution would result that could truly present Catholic ideals and values in the classroom.

Religious congregations apparently have had difficulty in merging their missions with one another but it may be time for the Catholic Church to reinvent its share of higher education. While there are about 250 Catholic institutions of higher learning in this country; many are small, rural and under- endowed. In this writer’s opinion, and in the opinion of others, many will not survive long. A decrease in 18 year olds is coming. While the numbers are not so significant, the pool of 18 year olds seeking a traditional undergraduate education will be more and more made up of minorities and immigrants – those most in need of maximum aid and those who are the natural constituents of catholic institutions.

A large and powerful university can offer strong programs, graduate studies, weekend efforts and online courses that are the equal of any. A large endowment can leverage student aid, helping to attract the best. If the University of Detroit/Mercy can get together, why not the five Catholics in northern Philadelphia all founded for women by women? Their values should be uniquely aligned in the tradition of the Catholic intellectual experience.

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