One Semester Away from a Crisis: An Economist’s Perspective on Leading Small Colleges

Rutgers University Press, 2026

Small colleges are a vital component of the United States higher education system. Many concepts familiar to economics professors but less familiar to more general audiences are helpful in understanding small colleges. These concepts include sophisticated ideas not typically covered in basic economics courses, such as regulatory capture, decision making under uncertainty, and the logic of collective action. By combining economic theories with my own experiences leading small colleges, I provide a way for presidents, trustees, and other leaders of small colleges to more effectively help their institutions achieve their full potential.

There has never been an easy time to be a leader of a small college. Leading these schools is challenging, as they are indeed “one semester away from a crisis.” If the president, the board of trustees, or other leaders make poor decisions that lead to a loss of enrollment and enrollment-driven revenue, they can go out of business quickly. Small colleges typically have an endowment that provides only a small fraction of their budget, making them extremely susceptible to any setback. The current set of existential crises facing enrollment-driven institutions is just the latest of those that have been publicly proclaimed by various voices in multiple ways for decades. Those who have taken on the responsibility of proving these predictions wrong need all the analytical tools possible to help them better understand their situation and lead their institutions successfully.

The most important insight that economics brings is that resources are always scarce, which implies that choice is always needed. Priorities can be inferred, in part, from the choices made about how to use the scarce resources available to them. This led me to be unsympathetic when institutions talk about running out of money before they could finish a project. As that example suggests, I regularly found that my immediate reaction to a variety of topics is very different from my colleagues who are not economists. For example, the persistence of tuition discounting is straightforward to explain as the result of price discrimination to increase revenue combined with behavioral economic insights into how people interpret prices. Economic analysis also explains why faculty members are so invested in the importance of shared governance and how the process that leads to people becoming faculty members implies that it will be difficult to revise the core curriculum.

A desirable feature of economic analysis is that it treats every person as autonomous rather than as an instrument to carry out instructions. People are ends, rather than means. No matter what curriculum a college develops, students will look for ways to enroll in the courses they want to take. No matter what activities a college wants them to pursue, students will look for ways to create the clubs they want and spend time playing the games they enjoy. No matter what the dean dictates, the faculty will look to pursue their own intellectual interests. While this approach complicates simple answers to difficult questions, it also brings the potential for lasting solutions to chronic problems.

In a time of visible constraints, applying the tools of economic analysis to achieve the best possible outcome is a valuable skill for leaders of nonprofit organizations. The book exemplifies the mission of NCNE to “help nonprofits make wise economic decisions.” Please visit One Semester Away from a Crisis – William T. Bogart to learn more and order the book.

This article is one of many resources dedicated to strengthening the nonprofit sector. Please be sure to check out NCNE’s website and LinkedIn page to connect with other nonprofit leaders and support on making wise decisions in nonprofit leadership.