A new “co-op” model to help strapped colleges
The philanthropy-backed Transformational Partnership Fund was created to help grease the wheels for colleges to begin discussions about mergers, collaborations, or other kinds of joint projects. The fund has awarded 17 grants totaling more than $1 million since it was announced in this newsletter a year into the pandemic, and I’ve got some insights on it to share below.
But first, consider one grantee — Urban College of Boston — which is using $200,000 in grant money to create what looks like a really cool model to keep itself viable. In partnership with Southern New Hampshire University, the parties are creating a “platform cooperative” — a model that looks a little like a consortium or outsourcing, but decidedly not in an online-program-manager way.
The form of this thing is reason enough to intrigue me, but I’m eager to follow this for at least two other reasons:
The model could help preserve and even expand the unusual and vital mission of the enrollment-challenged Urban College, a two-year institution that offers its courses (mostly in early-childhood education) in five languages to a student body made up predominantly of low-income, immigrant women in their mid 30s. The college began in the 1960s as a training program for Head Start teachers and has only been fully accredited since 2001.
This model could also be replicated elsewhere, with other wealthy institutions lending their resources and expertise to help sustain other colleges with their own unique and worthy missions. Yes, for all the punditry lamenting anthropomorphism in higher ed, there are still plenty of fragile-but-unique colleges out there deserving of an assist. And as Urban’s interim president Clea Andreadis noted to me a couple of weeks ago, with no additional federal relief funds in the pipeline, her institution is hardly the only small college without an endowment “that is not coming out of the pandemic in great shape.”
Platform cooperatives are more common in healthcare (or so I’m told), but rare in higher ed. Southern New Hampshire created this one — Impact.org — with $20 million earlier this year, after several consultations with Urban’s leaders. Urban is so far the first to sign on, and in addition to receiving $1.5 million in direct financial support to help it with what Andreadis called “a significant” deficit, the parties are now figuring out what kinds of services or expertise the co-op might provide to the college, most likely in areas like IT, back-office help with financial-aid processing, and marketing.
Initially, Southern New Hampshire personnel will do the work under contract to the co-op, but eventually Impact.org expects to hire its own staff or help coordinate the sharing of expertise from among members that join. The coop is “designed to build capacities in the collective,” as Southern New Hampshire’s president Paul LeBlanc explained.
Notably, while Southern New Hampshire created Impact.org — the new organization is legally designed so that it owes fiduciary duty to the colleges that are its members, not its sponsor. If the affiliation has “the qualities of a marriage,” as Andreadis put it to me, I guess this fiduciary clause is like the protection of a prenup.
It’s still too early to judge the real impact of this arrangement, but I can appreciate why the parties like it. It gives Urban College a no-risk lifeline, continued independence, and some wherewithal to explore new markets. “Given our educational model, there are lots of opportunities,” says Andreadis. The college employs between 50 to 70 adjunct instructors and about a dozen full-time administrators and has a current enrollment of about 1,200, down from about 1,500 pre-pandemic.
For Southern New Hampshire, which has a student body about 150 times that size and has forged more than a dozen other partnerships with smaller organizations, the venture is another avenue to understand how to serve students from diverse backgrounds. Southern New Hampshire saw Urban as an institution that was very embedded in immigrant communities and “really trusted,” there, LeBlanc told me. “We didn’t want to do an acquisition.” But the idea of using Impact.org to, say, bring Urban College’s online programs in Mandarin to a college in San Francisco or Chicago that wanted them, does get his juices going.
Impact.org will be selective about who else joins. It’s already been approached by several smaller institutions “with a lot of campus and a lot of debt,” LeBlanc told me, but it’s looking instead for members who can add value to the mix.
If Impact.org does ultimately expand and succeed, the model might have a familiar air about it. As Barbara Brittingham, the former president of the New England Commission of Higher Education and now a member of the Urban College Board of Trustees pointed out to me, in some ways it could provide to private colleges what many state systems’ offices now provide to public colleges. (I started at The Chronicle as a “state reporter” covering the power and limits of those kinds of offices all around the country, so I’ll be especially interested to see how this prediction plays out.)
Andreadis, who I met years ago when she was a top administrator at Bunker Hill Community College and I was reporting on programs to assist adult students, told me that when the college first began looking at its options, it found that “there just weren’t that many models out there” to consider. The two $100,000 grants gave it the resources to develop this new approach, she said, “without completely draining our bank account.”
‘Not just about mergers’
Most of the fund’s other grants have gone to support projects or ventures that remain confidential. Still, some recipients have been public about getting a grant and their use of the money. I’ve also recently spoken with one of the managers of the program, so I can share at least some of that skinny here.
A few things really stood out to me from that conversation. No. 1. The grants are being sought for a wide range of uses by a wide range of institutions. “It’s not just about mergers,” said John MacIntosh, managing partner at SeaChange Capital Partners, the nonprofit that oversees the fund. “And it’s not just about smaller privates.”
For example, the fund has made grants to a pair of community colleges considering a merger with a four-year institution, two private colleges exploring ways they might combine their back-office operations, and to five smaller colleges seeking advice on how to better, and perhaps collaboratively, manage institutional research. It’s also awarded grants to two groups of historically Black colleges working on strategies to promote wellness and mental-health services.
No. 2. Consultants, lawyers, finance experts, and some of the other usual suspects in the world of higher ed advising aren’t the only ones getting the money. In at least one instance, a grantee is using the funds to provide per diem payments to faculty members putting in extra time to explore an academic collaboration. (That’s an especially nice surprise for me, considering my worries that this fund could become a gravy train for consultants.)
No. 3. SeaChange is employing a venture-capital approach to the grant making, placing lots of small bets in many places in hopes of producing at least a few winning strategies. And even with grants of no more than $100,000 (Urban College got two), MacIntosh said they’re having an impact. “Sometimes board members don’t think the exploration is worth the money,” he noted, but they become more willing to consider ideas when other people’s money is paying the tab. The fund has rejected grants when it looks like the money would just be “sucked into a huge hole of expenses,” he told me. MacIntosh and others associated with the fund have also advised a number of institutions that will never get a grant.
The fund was initially financed with $1.5 million from the ECMC Foundation and $500,000 each from the Ascendium Education Group and Kresge Foundation and then in September 2021, the Michael and Susan Dell Foundation kicked in an additional $500,000. The fund was slated to operate through 2023, but MacIntosh said he expects SeaChange and the existing funders will continue it into 2024 and beyond.
That’s good. As the impacts of the pandemic and the demographic cliff continue to play out, I, uh, suspect there are still plenty of institutions that could benefit.
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