The rapid spread of coronavirus is among the most daunting trials all of our anchors have faced and it will take many years for a full understanding of its repercussions. At this early juncture, U3 Advisors is taking stock, focusing on higher education. We offer our preliminary reflections on three questions: How have educational anchors responded? How are they impacted? And what does the future hold for them?
In short, our higher education institutional clients have stepped up. Relatively early in the health crisis, colleges and universities led the way to demonstrate that large organizations needed to rapidly shift their operating models to protect individuals, even those not affiliated with the institution. This started with closing campuses and extending extraordinary support to students left stranded or homeless, while undertaking a massive shift to distance learning. Institutions are also harnessing their academic and research prowess, tapping into global research networks to find new treatments and deploy public health measures to track and contain virus spread, and repurposing rapid prototyping innovation infrastructure to manufacture personal protective equipment (PPE) locally. College and universities are offering now-vacant student housing to accommodate front-line workers, patients, and homeless populations. And institutions are drawing on their civic engagement arms to support vulnerable residents, neighborhoods and businesses by doubling down on health care outreach, local procurement and hiring strategies, and small business support. While responses vary across the country, anchors are generally rising to the challenge.
Despite the admirable, and in many cases heroic, responses of anchors, higher education is suffering a tremendous blow. But negative impacts are being felt asymmetrically. Larger and more financially secure schools, while still significantly affected, are able to take a longer-term view as it relates to their commitment to place-making and community engagement. While some large public universities may view this crisis as a moment to scale back campus planning initiatives, other institutions are capitalizing on an uncertain market by buying up strategically located real estate.
At the same time, we see many small private colleges facing an uncertain future—particularly those with limited endowments and lacking the cash reserves necessary to cushion against lost tuition and student housing revenue. Small schools may also not have the depth and breadth of staff needed to analyze impacts, formulate near- and medium-term strategic plans, and implement those plans. For many, this crisis may accelerate their decline, contributing to a trend of closures that has already started—and will unfortunately continue as student populations decline.
In this time of great uncertainty, the choices we make now and as we emerge from this crisis will determine the future trajectory of higher education. At U3, we work with colleges and universities to direct and amplify not just the work they do as educators, but as researchers, employers, landlords, food providers, and real estate operators, to better serve their stakeholders and host communities. This is the heart of “anchor strategy.” Looking forward, we imagine a few trends that may emerge or accelerate as a result of the pandemic, and ways in which institutions and their partners may respond:
- Redeploying the Anchor Strategy.
The response on hundreds of campuses demonstrates that colleges and universities can respond effectively in an emergency and rapidly convert their facilities to support frontline responders and affected communities. Preparing for future quick conversions to serve broader needs will be a central element of any “Anchor Strategy 2.0,” but new thinking cannot stop there. The disparities in mortality and socio-economic stress among COVID patients in underserved neighborhoods only underscore the need to deepen and expand institutions’ commitments to their communities. This includes forging partnerships with neighborhood organizations and residents themselves to create healthy environments, affordable housing options, and robust employment pipelines. The lack of local resources to fill supply chain gaps in response to coronavirus-–whether in the production and distribution of PPE, or availability of fresh local food–-creates the opportunity for anchors to intentionally focus their spending power within the local and regional economic ecosystem to bolster the production and distribution of goods and services.
- The Post-Corona Student.
Generation-Z just became “Generation-C”. The choices future students and their families make about whether and where to go to college will be informed by many factors—how much financial damage the pandemic inflicted on the family, how far the school is from home and whether the student can find safe alternative shelter, and what student life looks like in a post-social distancing world, to name just a few. The cost of tuition, housing, and daily expenses may finally push students to drastically rethink their choices if institutions fail to respond. Higher education must retool its economic structure, recruiting strategies, educational delivery, housing and dining formats and operations, and new strategies to foster a vibrant campus community where gathering—whether for classes, events or socializing—has always been central to campus life.
- A War of Attrition.
The plight of small, regional colleges was well-documented before the coronavirus. While many will survive and thrive, others will succumb. Their loss will hurt their students, faculty, staff, alumni, and local community. Contingency plans are needed for at-risk institutions, along with their communities; state and local governments; and the non-profit, industry, and philanthropic partners who support them. Such colleges and universities will need support to ensure that the educational and civic resources they offer will continue to be available to their communities, even if under a different operating structure. Some institutions, including community colleges, may pivot to expanded vocational and advanced manufacturing training, intentionally connected to local industry, to establish stronger regional supply chains; others may transform into community-based K-14 schools. Regardless, we strongly believe that comprehensive national or state-level efforts are required to provide the necessary planning and resources, particularly in the event of widespread closures.
- Demonstrating Leadership in Crisis.
In a matter of weeks, higher education has painfully transformed itself. This pivot remains a work in progress, but in so doing, colleges and universities are demonstrating that drastic behavioral change, once unimaginable, is indeed possible. The unfortunate reality is that not only will other crises emerge in the future, but some are here now, including our global climate emergency. Universities and colleges are already at the forefront of addressing global warming. The time is ripe to enhance our collective efforts to promote culture change in planning, development, operations, academic programs, and research. We should not let this crisis of opportunity go to waste.
We are certain that higher education institutions will survive this pandemic. The current crisis and its repercussions only reinforces the mission of anchor institutions to educate future generations and to solve local and global challenges. Campuses, operations, and the student experience may look different. But by harnessing educational and research acumen, economic activity, and mission-driven aspirations, anchors and their communities will flourish for the decades and centuries to come.