Dana College goes for-profit using a somewhat different approach

Last week, Dana College, a non-profit college of the Evangelical Lutheran Church in America, announced that it was being taken over by the for-profit Dana Education Corporation (DEC).  Dana College had experienced financial problems over the past few years, and had seen declining enrollments.

Most of the press (e.g. the AOL report) has treated this as just another in a series of stories of small non-profit institutions that found that the only road to fiscal salvation lay in purchase by a well financed for-profit.  According to this story, the for profit then uses the institution's accreditation to inflate enrollment, thus simultaneously cheating both taxpayers and students (see Unexamined premises in reporting on the for-profit education front).   However, based on the press release, this ownership transition does not seem to be well described by that generic story.

According to that release, DEC intends to maintain Dana College’s traditional mission, and will focus on liberal arts education in a bricks-and-mortar setting.  Dana College’s old Board of Trustees:

 will continue under the name Dana Education Foundation. The foundation will continue to preserve the heritage of Dana College through support of the Danish American Archives, campus ministry, Alumni Affairs & Alumni Council along with support for community events.

DEC is led by two veterans of the for-profit world:  Niraj Kaji, formerly Vice President of Walden, and C. Ronald Kimberling, formerly President of the Chicago campus of Argosy. Kimberling  also served earlier in senior positions in the Department of Education.   Kaji will become President of Dana College after the transition, and Kimberling will become Provost and Chief Academic Officer.   Other investors were not identified.  However, according to the press release, the new board of trustees will have an interesting composition:

 Upon the effective date of the new partnership, members of Dana’s board of trustees will include leaders from higher education, government, and the private sector including a former state governor, past president of a Lutheran university, administrators from Ivy League universities and local community leaders.

According to the press release, DEC currently has no plans to start an on- line extension, but rather initially will focus on rebuilding the on-campus student population to previous levels, and in building study abroad programs.  

In an interesting break with other similar transitions, faculty tenure will not be abolished. Inside Higher Education describes Kimberling’s views on the tenure issue thusly:

Kimberling said that the decision to keep tenure reflected his belief that "faculty are the lifeblood of institutions" and that to be effective in "blending cultures," a for-profit institution should show respect for "the values of traditional institutions." He said he viewed tenure as "a master's badge" and that there was "nothing incompatible" about tenure in a for-profit environment.

DEC’s decision to focus on rebuilding the campus programs is similar to the strategy typically followed by Laureate Education (parent company to Kaji’s old company, Walden) in its acquisitions.  The board of trustees looks like it will be similar in composition to the boards that Laureate has instituted for its U.S. acquisitions (see, e.g. the recent announcement from the College of Santa Fe).  

The interesting innovation in the Dana case seem to be the maintenance of tenure.  In some ways, it seems that DEC is betting that professional management will enable Dana College to thrive and grow without shedding core attributes such as mission and tenure.  It will be interesting to see how this works out, and how DEC's strategy clarifies and evolves over time.