Ensuring a Legacy after a College Closure: The Marygrove College Experience

By John C. Cavanaugh and Elizabeth A. Burns    //    Volume 27,  Number 6   //    November/December 2019

Sometimes a college faces a daunting decision about whether it can remain open or be forced to close due to undeniable financial pressure—but there can be an opportunity for an institution to find a way to continue its legacy despite a closure. Marygrove College created a plan to ensure its legacy lives on in the community.

Closing a college is an extremely traumatic event that is personal. Students’ academic plans are disrupted. Faculty and staff careers at the institution end abruptly. Volunteer trustees lose a way of living out their personal missions. A community loses a valuable asset. Alumni lose their alma mater. Employers lose a part of the talent pipeline. Anger, abandonment, failure, responsibility, helplessness, anxiety, depression, stress, and loss are some of the powerful emotions expressed. College closures affect every aspect of the lives of the people who directly or indirectly were connected to it.

Much has been written about why colleges fail, and several data analytic postmortems have identified a handful of the most common reasons and possible indicators that may provide greater predictability of those that are on a failure trajectory (see articles such as “The Surreal End of an American College” published in The Atlantic in June 2019 and “Will Half Of All Colleges Really Close In The Next Decade?” in Forbes in December 2018). Lacking in these discussions, though, is consideration of the legacy aspects of a college and how its closure has effects beyond those experienced separately by the various constituency groups. Simply put, colleges have individual reasons for existing, expressed in their mission statements. The closure of a college means that its mission is unlikely to continue, especially when viewed from the perspective of ensuring that what comes next would create a better set of opportunities related to the mission that existed when the college was operating. But what if there were ways to pass on that legacy, much as individuals do to heirs or organizations through such steps as endowing programs, scholarships, faculty lines, and the like? In that way, the college’s core mission would live on, with the opportunity to broaden its impact. We write with an example of how to do just that.

Like many of its peers, Marygrove College, a Catholic liberal arts college in Detroit, experienced significant financial challenges throughout this decade largely due to declining enrollment. By 2015–2016 that decline had reached roughly 25 percent from several years earlier. Given that the percentage of students on Pell grants was roughly 65 percent, and the average household income was less than $30,000, tuition elasticity was limited, and uncollected student debt (tuition nonpayment) constituted a significant portion of projected (but unrealized) revenues. Initially, the trustees were faced with the usual options: merge, be acquired, or close. The board, on the recommendation of the senior leadership team, chose to engage external consultants to conduct a deep analysis of enrollment management (including marketing, recruitment, admissions, and financial aid packaging) and academic affairs (program mix, course-by-course enrollments and complete financial analysis, and new opportunities). These engagements were specifically designed to generate evidence on which the board would base its subsequent decisions.

In addition to the analytic assessments, the board and senior leadership team engaged in two interrelated sets of innovative conversations with strategic partners: the Sisters, Servants of the Immaculate Heart of Mary (the sponsoring religious congregation in Monroe, Michigan, that had founded the college in 1905) and the Kresge Foundation. One had a foundational role and both had longterm financial support relationships with the college. Significantly, both had very deep ties to Detroit. These conversations focused initially on the college’s debt, especially the mortgage on the campus (owed to the IHM Sisters) and various loans and lines of credit. Collectively, negotiations with the fiscal institutions resulted in a restructuring of the debt, and a highly innovative and creative alternative opportunity.

A model that had been used successfully in Detroit during its own bankruptcy crisis a few years earlier, as well as in other locations and situations, based solutions in creating a nonprofit conservancy that consolidates several key aspects, such as real property and certain other operations, to provide a way for organizations to restructure and focus only on their core business and mission.

About the time that the debt restructuring was moving into this solution option phase, results from the consultants’ analyses began to arrive. The news was nearly uniformly grim. The decline in undergraduate enrollment was unlikely to abate, due to the combination of a significant decline in the number of high school graduates in metro Detroit, the lack of significant resources to invest in new marketing efforts, an increase in the number of competitor institutions (including online), and insufficient internal resources to address unmet financial need. On the academic side, fiscal data analyses showed that no undergraduate course generated an operating margin, and the academic analyses indicated that the mix of programs was not well aligned to the current market needs. Both analyses also noted that an improving economy would exacerbate the situation. The only good news was that the graduate programs more than covered their costs and projected a reasonable future with good opportunities to expand into credentials in high demand.

Using the data and the debt restructuring opportunities, the board made a set of very difficult decisions in August 2017: (a) terminate all undergraduate programs in December 2017; (b) continue operating as a graduate-only institution as of January 2018; (c) sell the campus to the newly formed Marygrove Conservancy; and (d) take necessary steps to reconfigure the college to reflect its new role and mission. These decisions resulted in significant layoffs and focusing down on the remaining master’s programs.

We will not go into extensive detail about processes relating to the action of “show cause” promulgated by the Higher Learning Commission. Nor will we detail issues related to various audits launched by the U.S. Department of Education. Suffice it to say that the combination of the accreditation sanction, which took a year to remove and reset to financial monitoring only, and continued changing contexts relating to the program mix (no new programs were permitted to be launched due to the accreditation sanction and U.S. Department of Education audits), graduate enrollments that had been promising declined significantly.

Summer 2018 brought a planned transition in board leadership and a recognition that the board needed an opportunity to discern its next steps. Most important, we decided to use our annual daylong fall retreat in October 2018 as a time to reflect and strategize on the path forward. By engaging an experienced facilitator, we were assisted in having the board envision a full range of potential scenarios. This process enabled the board to both grieve the loss of a core part of Marygrove’s founding mission, and to see how the new mission built on what came before. Without this process, and the ongoing support from the Kresge Foundation and its nurturing of the Conservancy, it is unlikely that what followed would have otherwise been undertaken with clear intention and optimism.

Emerging from the retreat, the board took decisive actions to support a significant effort at more clearly branding the college as a graduate institution and adopted the “Marygrove College: A Graduate School” marketing approach. Additionally, an innovative recruitment advertising campaign was launched, which received very strong praise for its personalized messages and diverse student portrayals.

By early 2019, though, headwinds were still evident. Despite positive receptions, the recruitment campaign was not effective in reversing the continuing decline of applicants and enrolled students. The combination of an improving economy with relatively low unemployment rates (compared with rates in Detroit at the height of the Great Recession), declining incentives for teachers to obtain master’s degrees (the majority of Marygrove’s graduate students historically), and residual issues from errors in processing certain federal loans years earlier that prevented new programs from being approved by the U.S. Department of Education for Title IV financial aid created ongoing barriers to growth. By spring 2019, it was clear that these barriers were not going to ease. Consequently, the board made the decision announced in June 2019 to close the college entirely in December 2019.

For most colleges that make the difficult decision to close, that would normally be the end of the story. But for Marygrove, it is not. As emotionally wrenching as the vote to close the college was—especially for the alumni on the board—it was coupled with deep optimism that not only was the future bright, students and residents of Detroit would be better served in the long run. This, surely, is not the way closure scenarios usually play out.

Despite the decision to close, the creation and early and sustained nurturing of the Marygrove Conservancy provided the vehicle for ensuring the legacy of Marygrove College. As an independent nonprofit organization, the Conservancy’s board (which includes neighborhood community members) took to heart Marygrove College’s mission of educating a diverse population of students by placing a priority on having a public school on the campus. What emerged was a P–20 education model that would keep education alive and well on the Marygrove campus and expand it to include the continuum from early childhood education and K–12 to higher education. The core group of partners to enact this vision with the Conservancy includes Marygrove College (until December 2019), the School of Education at the University of Michigan, Detroit Public Schools Community District, Starfish Family Services, IFF, and the Kresge Foundation.

The P–20 initiative has already made great progress in preserving and expanding Marygrove College’s legacy. In spring 2020, groundbreaking for an early childhood education center will take place. This new center had significant input in its design from local community residents. Detroit Public Schools Community District (DPSCD) is opening its first new public high school in a decade, starting with the ninth grade in September. This social justice-themed school’s initial class will come mainly from Detroit families (97 percent of the students), with half of them returning to Detroit from suburban districts and charter schools. Most important, 75 percent of accepted students live within two miles of the Marygrove campus. When the high school is at full capacity, it will serve roughly 1,000 students. Also in September, the University of Michigan’s School of Education will launch a teaching residency program that is modeled after medical training programs so that students who have completed the University of Michigan’s undergraduate or graduate teacher preparation programs are able to receive the mentorship of veteran secondary teachers. This will ensure that Detroit’s next generation of public school teachers are trained appropriately. Oakland University, Marygrove College’s teach-out partner, has expressed an interest in exploring opportunities to bring undergraduate programs back to the campus.

In one sense, Marygrove College’s upcoming closure this coming December is just another in a continuing series. But in a critically important way, it also is creating a model for the creative preservation and expansion of a college’s legacy to serve an even greater range of students. Through the board’s willingness to take a creative risk, the senior leadership team’s tireless work at analyzing data and talking with accreditors and supporters, faculty and staff perseverance, and innovative partners and funders, the Marygrove Conservancy is rising to lead the reinvigorated work of educating Detroit’s students from preschool through graduate education. We cannot claim that this model will work in every case, nor even that it will be a perfectly smooth path at Marygrove. What we offer is at least one way to avoid a once thriving college merely becoming a passing reference and a sale of physical assets. We took Marygrove College’s legacy to heart, and now have the knowledge that our closure enables and ensures that new and richer opportunities will emerge.

John C. Cavanaugh, PhD, is the chair of the Marygrove College Board of Trustees and is
the president and chief executive officer of the Consortium of Universities of the Washington Metropolitan Area. 

Elizabeth A. Burns, MD, MA, is the president and an alumna of Marygrove College.

TAKEAWAYS

■ The optimistic and relatively smooth closure of Marygrove College would not have been possible without having an experienced facilitator help lead the discussion during the board’s fall retreat. This process helped the board grieve the loss of part of Marygrove’s mission while allowing them to see how the new mission is building on what came before.
■The creation of the Marygrove Conservancy provided a way to ensure the legacy of Marygrove after they made the decision to close. The Conservancy made it a priority to have a public school on the campus to keep Marygrove’s mission of educating a diverse population of students.
■ In spring 2020, groundbreaking for an early childhood education center will take place and the Detroit Public Schools Community District is opening their first public high school in a decade. These are both examples of how the Conservancy is maintaining Marygrove’s mission.
■Marygrove’s personal experience has created a model for the creative preservation and expansion of a college’s legacy that can continue after a closure. New opportunities can emerge even when a college is facing a closure.