March 23, 2026, By Chet Haskell – Higher education in the United States has long boasted of its institutional diversity. From mega state universities to local community colleges, from elite private research universities to tiny specialized schools, this eco-system provides multiple options and avenues for anyone seeking education. At the same time, this same diversity is fluid and fragile, as demonstrated by the steady stream of closures and the prediction of many more to come.
One subset of this ecosystem – the traditional undergraduate residential liberal arts college – has faced particular challenges of late. While there numerous variations on this model, the general category can be defined through use of National Center for Educational Statistics. NCES counts a total of 1568 private non-profit colleges and universities in the United States of which 1179 are four-year institutions with 3000 or fewer total enrollments.
According to the latest NACUBO/Commonfund survey, of the 1179, there are only 80 with endowments in excess of $200 million and another 34 with endowments between $200 million and $100 million. The basic size of an endowment is of limited explanatory value, since most endowments are composed of multiple endowment with restrictions as to use.
Instead, endowment per student is often a more helpful metric. Among the 80 institutions in the NAUBO/Commonfund survey with endowment in excess of $200 million, a handful (Amherst, Williams or Pomona) have endowments valued at more than $1.8 million per student. Size matters in this case. To put this into perspective, these per student endowments are greater than the per student endowments of most of the larger institutions, except Princeton, Harvard, Yale and MIT. At the lower end of this subset, Whitworth College’s endowment is equivalent to $86,000 per student.
There is also a range of per student endowments the group between $200 million and $100 million. For example, Cottey College’s endowment value is $444,000 per students, but it has only 260 students. The other hand Elizabethtown’s endowment is equivalent to only $54,000 per student.
Even with such resources, most of these institutions are still enrollment dependent, just not entirely so. And one must remember that institutions with more than $100 million endowment represent less than ten percent of all the smaller private institutions. The remainder face much starker resource and revenue challenges and are thus indeed totally tuition dependent and facing the well-reported demographic decline in the number of high school graduates, a decline that will continue for the next decade.
Setting aside the small group with endowments over $200 million, all of the other smaller institutions under discussion must face this decline in their primary revenue source in what has become an increasingly competitive marketplace.
Not only are they similar in approach to higher education, but they face similar challenges and, strikingly, employ similar strategies in their quests for sustainability.
These conditions describe what organizational theorists Walter Powell and Paul DiMaggio called “institutional isomorphism and collective rationality” in a seminal piece in 1983. They argued that institutions in the same field become more homogeneous over time without becoming more efficient. They identified three basic reasons for such changes:
Coercive isomorphism – similarities imposed externally by government policies and funding sources, as well as accreditation practices are good examples.
Mimetic isomorphism – similarities that arise from standard responses to uncertainty such as common approaches to enrollment management and marketing.
Normative isomorphism – similarities that come under the title of “professionalism” such as standard practices for academic/faculty structures, “best practices” in student support and what has been described recently by Hollis Robbins as the “nomenklatura” process or list through which one becomes an institutional leader — most presidential searches end up looking for (and hiring) individuals with similar qualifications and experiences.
The subset of small residential undergraduate institutions based on a liberal arts curriculum would seem to represent clear examples of such institutional isomorphism. This essay will discuss why this is the case and will present a potential path out of the “iron cage” in which they are trapped.
First, the challenges facing these institutions are not new. While current policies of the Trump Administration exacerbate the difficulties that are faced, the basic challenges will remain after the current government is history. Academic institutions must take the long view and be planning today for where they want to be in five or ten years or more. A key element of any strategic plan is looking beyond the immediate and acquiring the resources needed to invest in the future.
Second, the fundamental challenge is financial in nature. As noted, most of these institutions lack significant endowments and other financial resources and are almost completely dependent on tuition from enrollments. Yet, expenses constantly rise and alternate sources of revenue are limited. At the same time, competition for enrollments has led to almost universal discounting of tuition as a pricing strategy, typically by 50% or more. Furthermore, such colleges must also confront rising employee costs, increased insurance bills and the maintenance of aging facilities. They also lack opportunities for economies of scale.
The applicability of Powell and DiMaggio’s construct is clear. Institutions have become more alike because of all three of the scholars’ isomorphic pressures. These institutions are equally dependent on Federal student financial aid and access to such aid is conditioned on accreditation by one of a set of authorized and quite similar accreditors. The quest for enrollments supports an industry of outside consultants for marketing and enrollment management, none of which are clearly distinctive in approach or results. College websites all look as if they came from t same source, with seemingly standard formats and the common photos of diverse, happy groups of students.
Professional norms and expectations for leadership positions are also of a piece. A casual review of position listings in the standard set of industry publications will demonstrate this reality, as are the similar credentials and career paths of most leaders.
It all amounts to a form of commodification. These institutions all look pretty much the same to outside observers – including large numbers of potential students and parents.
For most institutions, assured sustainability requires either steady and growing enrollments or healthy endowments and related support. The alternative is fragility and exposure to the next external crisis such as the financial collapse of 2008-09, the COVID pandemic, or, today, a national government determined to reduce support for higher education through less financial aid, loosened accreditation requirements that will increase lower quality competition, inhibit international student enrollments or undercut accessibility initiatives that encourage diversity and inclusion.
Under these circumstances, it is hardly surprising that academic institutions have been failing in increasing numbers, sometime through forms of mergers and acquisitions with other institutions and other times through complete closure. While a merger might retain some elements of the merged institution, the losses both economic and psychic are extensive. In the case of a bankruptcy or closure, the effects are often felt more widely, particularly in small towns where a college is a form of institutional anchor.
Is it possible to break out of the pack? Can an institution gain the financial stability necessary for long term survival and prosperity through doing something different? Many institutions have sought a degree of security through consortia arrangements which typically try to lower expenses though sharing of services and which attempt to increase enrollments through providing greater options to students. Regardless of the success of such efforts, the fact is that consortia, while helpful in reducing costs and attracting incremental students, are still basically marginal in impact. The member institutions remain separate in terms of accreditation, institutional governance, budgets and leadership. Collaboration can help institutions well-placed to take advantage of consortia, particularly those within a limited geographic region. But consortium success presumes a certain degree of financial stability of the member institutions.
The Coalition for the Common Good, a new arrangement designed to engage multiple institutions with similar missions that can take advantage of the different strengths of members, began in 2023 with two founding institutions, Antioch University and Otterbein University. Basically designed as a middle ground between consortia and mergers, this initiative aspires to chart a new cooperative path among its members where institutional sustainability is nourished through collective enrollment growth. However, the Coalition is still in its infancy and can only work for certain institutions. Additional models must be developed.
Some institutions are well -placed for the exploration of partnership arrangements. They still have time and room to maneuver before facing more drastic choices. Yet, understanding and implementing the multiple details of any such arrangement is difficult and beyond the capacity of most boards and presidents. Every arrangement is different. Identifying appropriate partners is time-consuming and difficult. Actually putting together a deal and obtaining all the necessary state, Federal and accreditor approvals takes time and expertise. The costs, especially legal, are significant. An even greater expense are the opportunity costs imposed on the leadership teams which not only have to continue to manage their institutions, but also become constrained in what else they can consider. Bandwidth becomes a very real problem.
This is an opportunity for segments of the philanthropic world to consider possible new initiatives to support the small college elements of the education sector. While there will always be efforts to gain foundation support for individual colleges, there will never be enough money to buttress even a small portion of deserving institutions that face the financial troubles discussed above
Philanthropy should take a sectoral perspective. One key goal should be to find ways to support smaller institutions in general. Instead of focusing on particular institutions, those interested in supporting higher education should look at the multiple opportunities for forms of collaborative or collective action. Central to this effort should be exploration of ways of supporting diverse collaborative initiatives.
But there is a large middle ground between consortia arrangements and mergers and acquisitions. The Coalition for the Common Good is but one such arrangement and it is still in its early stages. What has been learned from the experience thus far that might be of use to other institutions and groups? How might this middle ground be explored further for the benefit of other institutions?
Philanthropic institutions could support this work in numerous ways, first for specific initiatives and then for the sector, by providing funding and expertise to facilitate new forms of coalitions. These could include:
- Providing financial support for the collaborative entity. While participating institutions eventually share the costs of creating the new arrangement, modest dedicated support funding could be immensely useful for mitigating the impact of legal expenses, due diligence requirements, initial management of shared efforts and expanded websites.
- Providing support for expert advice. The leaders of two institutions seeking partnership need objective counsel on matters financial, legal, organizational, accreditation and more. Provision of expertise for distance education models is often a high priority, since many small colleges have limited experience with these.
- Funding research. There are multiple opportunities for research and its dissemination. What works? What does not? How can lessons learned by disseminated?
- Supporting communication through publications, workshops, conferences and other venues.
- Developing training workshops for boards, leadership, staff and faculty in institutions considering collaborations.
- Crafting a series of institutional incentives through seed grant awards to provide support for institutions just beginning to consider these options.
- These types of initiatives might be separate, or they might be clustered into a national center to support and promote collaboration.
These and other ideas could be most helpful to many institutions exploring collaboration. Above all, it is important to undertake such explorations before it is too late, before the financial situation becomes so dire that there are few, if any, choices.
This middle ground is not a panacea. Some institutions will fail. The wealthy institutions will survive but they are neither numerous enough nor sufficiently accessible and affordable to compensate for the likely losses in weaker colleges. Public support, both state and Federal is unlikely to increase for the public sector institutions. Loosened accreditation will open up higher education to predators, especially for-profit in nature.
The institutional isomorphism described by Powell and DiMaggio is real in higher education and serves to undercut the strengths of an educational arena that should be characterized by creativity and diversity of approaches. Friends of higher education should be seeking alternative models of structure and organization and the philanthropic sector should have an interest in encouraging and supporting such variety.
Paul DiMaggio and Walter Powell, “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organization Fields” in The New Institutionalism in Organizational Analysis, Walter Powell and Paul DiMaggio, eds. Pp.63-81, University of Chicago Press 1991
Hollis Robbins, The Higher Ed Nomenklatura, Inside Higher Ed, May 12, 2025
Dr. Chet Haskell serves as Co-Head for the College Partnerships and Alliances for the Edu Alliance Group. Chet is a higher education leader with extensive experience in academic administration, institutional strategy, and governance. He recently completed six and a half years as Vice Chancellor for Academic Affairs and University Provost at Antioch University, where he played a central role in creating the Coalition for the Common Good with Otterbein University. Earlier in his career, he spent 13 years at Harvard University in senior academic positions, including Executive Director of the Center for International Affairs and Associate Dean of the Kennedy School of Government. He later served as Dean of the College at Simmons College and as President of both the Monterey Institute of International Studies and Cogswell Polytechnical College, successfully guiding both institutions through mergers.
An experienced consultant, Dr. Haskell has advised universities and ministries of education in the United States, Latin America, Europe, and the Middle East on issues of finance, strategy, and accreditation. His teaching and research have focused on leadership and nonprofit governance, with a particular emphasis on helping smaller institutions adapt to financial and structural challenges.
He earned DPA and MPA degrees from the University of Southern California, an MA from the University of Virginia, and an AB cum laude from Harvard University.
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