Archive for December, 2014

What are the factors behind Bethany’s closing?

There are a lot questions, confusion, sadness and even anger over Bethany’s announced closure. I’m going to do my best to say what is appropriate at this time. It is easier to talk about what happened than why it happened because some of those issues are a matter of interpretation.

The two really obvious factors are the number of first year students enrolled this year and debt.

There were only 24 new students this year. Assuming normal levels of retention in to the second year there would be a very small group of 2nd years next year. Project that one year further you really don’t have enough students to make up a class in the 3rd and 4th years.

Why did Bethany have so few students? The most accurate answers lies in the hearts and minds of parents and youth. Without professional level market research it would difficult to determine which factors are the strongest. Here are all the factors that I’ve seen people suggest.

Demographic trends – Bethany’s traditional student came from a rural back ground and families have been migrating to cities for decades.

Church youth engagement – there is a growing trend of youth leaving the church after highschool. If they aren’t interested in church, they are less likely to be interested in bible school.

Cost – The student fees to enroll one year at Bethany and live in residence went from $4500 / year in 1995 when I attended to $15,000 / year today. The cost of other post-secondary education has gone up as well making it more difficult for a student to do both.

Shifting attitudes – young people are more interested in life experience than academics.

Compelling alternatives – Other programs geared at young adults that involve missions, service or were located in more exotic locations were more attractive to some students. Millar college has remained very strong and even started a new campus and appealed to a more conservative demographic.

Accreditation – Some people I’ve talked to suggested accreditation raised costs, and impaired the schools ability to be devoted to scripture and put too many parameters on their programming.

As a close observer of the school I’d say most of these assumptions about the negative impacts of accreditation are exaggerated. Accreditation did modestly raise costs and it did require Bethany to operate to certain standards, but it definitely didn’t impact the school’s devotion to the bible. If accreditation is a significant factor it was how it changed people’s perception of the school. Accreditation did function as worthwhile accountability mechanism, but it never did deliver the hoped for levels of transferability of credits to universities.

According to CRA’s reports found here Bethany had 1.1 million dollars in liabilities at the end of 2012/2013 school year. The numbers for the last school are not posted publicly.

According to the CRA Bethany had $170,000 in liabilities in 2007 and added about million dollars to that amount in 6 years.

I imagine lots of people would wonder how Bethany accumulated so much debt in such a short amount of time. As an outside observer I can only point to the numbers publicly available at the CRA’s website. Those numbers don’t explain the debt levels as the yearly operating budgets were for the most part balanced. I can only guess but the one obvious explanation is the school borrowed money for capital projects and simply didn’t pay it off.

I plotted out the last ten years from numbers publicly available at the CRA. Some noteworthy tidbits:

2010-2012 had record levels of fundraising.
2011-2012 had record levels of revenue.
From 2010-2013 there were significant increases in revenue from student fees while enrollment was declining.
From 2008 to 2012 staff expenditures went from $1.15 million to $1.5 million.
Overall expenditures dropped significantly in 2010 but jumped back up in 2011 and 2012.

In 2013 there was a reduction in expenditures but also a perilous drop in fundraising revenue.

Scale 1  = 1000
Year Charitable Giving Church Giving Fundraising Costs Net Fundraising Revenue from Student Fees Total Revenue Expenditures Rev-Exp Liabilities (Debt) Staffing Expenditures
2013 330 154 298 186 1677 2208 2303 -95 1117 1326
2012 726 194 329 591 1511 2506 2400 106 845 1495
2011 813 204 240 777 1300 2378 2314 64 748 1343
2010 622 207 233 596 1250 2128 2142 -14 754 1222
2009 516 212 254 474 1455 2234 2365 -131 682 1167
2008 416 246 200 462 1536 2295 2336 -41 520 1226
2007 354 246 182 418 1538 2277 2250 27 178 1219
2006 298 251 175 374 1365 2068 2012 56 300 1088
2005 296 202 156 342 1332 1955 1966 -11 243 1052
2004 316 208 116 408 1493 2139 2067 72 270 1048
2003 399 170 51 518 1308 1994 1872 122 160 954

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