Penn GSE alum Julee Gard protects the financial viability of small universities

March 12, 2024
Julee Gard, wearing a red cap, a navy blue and white striped shirt, and a brown apron, is focused on serving sausages at a soup kitchen in Joliet, Illinois, alongside her University of St. Francis colleagues.

Julee Gard (standing with sausages) and colleagues from University of St. Francis serving breakfast to homeless people in a soup kitchen in Joliet, Illinois.

Small nonprofit universities play a key role in educating U.S. college students. In 2020, over 4 million of America’s roughly 19 million students were enrolled in small institutions. But many are in financial trouble. And with college enrollments expected to drop over the next few years, these types of schools are the most vulnerable.

Julee Gard, CFO of the University of St. Francis (USF) and a recent graduate of Penn GSE’s Executive Doctorate in Higher Education Management program, has a way to help. After researching why so many schools closed, she developed a simple, color-coded financial health tool specifically designed to give small, tuition-dependent schools timely and actionable analyses.

Since 2017, 90 U.S. private colleges and universities have closed. “When they close, people are often surprised,” Gard said. “I believe very strongly that if leaders understood better how to look at their financial data and act, that maybe we could see fewer closures.”

There are a variety of financial tools leaders and funders can use to monitor a university’s financial health. Unfortunately for small nonprofit colleges, most of the commonly used versions are designed for schools that get state money, have large endowments, and/or a mix of valuable assets. Those tools de-emphasize recurring liquid assets like tuition, student fees, and fundraising. But for small schools enrolling 2500 or fewer students and lacking other resources, there may be little financial cushion if revenues decrease or expenses rise. And every semester is different.

Gard has derived the Financial Viability Index (FVI) from her studies of hundreds of schools. The FVI emphasizes two key elements: liquidity and timeliness. Many other indices rely heavily on publicly available financial data, which is often out of date. Gard warned that “the prior eight years aren’t always indicative of what the future is going to look like, especially for tuition-dependent schools.”

She made the eight-component FVI easy to calculate based on data any CFO should have, easy to communicate to people without finance backgrounds, and actionable.

The top grade for financial health is blue. Green indicates very good health, yellow is good, orange is marginal, and red is poor. Most failed schools were red or orange the year before they failed.

The FVI is already helping. She explains that her university “completely changed the way we looked at our operations.” For example, if the university raised tuition but offered more scholarships, net tuition revenues may not actually increase; tuition sticker prices were not necessarily predictive of the net revenues. “We’re spending students’ money. All our operating expenses need to be covered by student-related revenues. It’s a discipline that we’ve put in place to help right-size our expenditures and spend within our means.”

University leaders are taking notice. Gard spoke about financial viability recently to the Council of Independent Colleges, the Society of College & University Planners, and the Association of Franciscan Colleges & Universities. “I get frequent requests from colleagues and friends to run the FVI on various schools as folks entertain potential job offers at these institutions,” she said.

To Gard, communicating financial information effectively is “an act of service.” Her undergraduate degree was from a small faith-based university. Her teachers knew her well and held her accountable. “The experience was life-changing,” she said. “I needed that smaller environment.”

She took the CFO role at USF because “there’s a purpose for private higher education, even for smaller, not well-endowed schools.” Her experience at Penn GSE further expanded her thinking about education. Gard and Jon Wexler, another Penn GSE Higher Education Management program alum, kicked off this semester’s webinar series for The McGraw Center for Educational Leadership in January, and Gard will participate in another webinar on March 21.

“For me, it is 100% mission-driven,” she said. “I love our school’s mission. I love the students we serve. Hopefully, there's a student here that has that same feeling that I did 30 years ago.”

Gard warns university leaders to take an honest look at their finances every month: “If you’re red, you are 19 times more likely to close than if you are yellow. But just because you are red, you’re not doomed. There are many examples where schools were able to claw back from a red or an orange and improve. The key was they did something.”