For three straight years, more than 40% of the Christian colleges in our dataset have generated negative operating cash flow.
That means net cash provided by operating activities was below zero.
In collaboration with Gary Stocker at College Viability, we analyzed financial data drawn from the audited financial statements of 142 Christian colleges, FY2019 through FY2025. Between 137 and 141 schools reported operating cash flow in any given year.
The measure is simple: Did the day-to-day operation of the institution bring in more cash than it spent?
This included the basic business of running a college, things like tuition, housing, operating gifts, salaries, and utilities. Construction, borrowing and endowment investments were excluded.
Think of it as the institution’s checking account. Did more come in than went out?
Here’s what we found in terms of colleges with negative operating cash flow:
FY2019: 33 of 138 (24%)
FY2020: 32 of 138 (23%)
FY2021: 24 of 141 (17%)
FY2022: 46 of 141 (33%)
FY2023: 56 of 139 (40%)
FY2024: 60 of 137 (44%)
FY2025: 57 of 139 (41%)
In FY2021, Federal COVID relief temporarily masked the problem.
At many institutions, tuition revenue weakened as enrollment declined while operating costs climbed. Wages went up. Food went up. Insurance went up. Nearly everything became more expensive.
Then the federal money stopped, but the revenue gap remained.
Seven institutions originally included in our research have since closed or announced closure. We removed all seven from every year of the analysis, making these numbers more conservative.
Cash flow alone doesn’t predict closure. Some colleges have significant reserves. Others have assets they can sell or donors willing to step in.
But there’s a limit. Three or four consecutive years of spending more cash on operations than the institution generates starts forcing difficult choices.
We’re seeing the consequences of this now. As leaders run out of time to change course, maintenance gets deferred, financial aid becomes more aggressive, and eventually, staffing and programs get cut.
Christian colleges cannot cost-cut their way to a compelling future. But they also cannot pursue their mission indefinitely without an economic model that works.
Presidents and boards need to understand more than whether the budget technically balances.
They need to ask:
➖ Is our core operation generating cash?
➖If not, why not?
➖And what are we doing now to change the trajectory?
Because eventually, the checking account wins. And we need Christian colleges to succeed.
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At TG Three, we help Christian colleges build strategies that connect enrollment and revenue growth with long-term financial sustainability. If your institution needs a clearer path forward, let’s talk.