The Tug-of-War Between Cash Flow and Institutional Values in a College-Seminary Merger

This case study documents the merger of a liberal arts college and a seminary, with particular attention to fiscal aspects of the venture. The interaction of Friends Regional University (FRU) with its seminary offers important theoretical lessons because of the interplay of three factors:1) FRU has a strong institutional context based on the evangelical Christian identity of the school. The undergraduate program was created more than one century ago as a Christ-centered opportunity for young people to integrate their faith and learning.2) From 1986, FRU had become more dependent on adult programming to meet its budgetary commitments. The adult programs also served to broaden institutional scope in the transition from college to university.3) Furthermore, throughout the history of FRU, the leadership had a strongly developed perceptual schema shaped by their evangelical Christian faith and lifestyles.

Tension between the institutional perspective and resource dependency was evident in how FRU dealt with its seminary during the time of the case study (1996–2002). The seminary was clearly Christian and had lost money each year for the past several years prior to 2003. In the perspective of the president, vice president for academic affairs, and the board, the seminary was categorized as an adult program and therefore should have been able to cover all its direct costs as well some indirect costs. The article reviews these issues and concludes with a discussion of how the difficulties created by the merger were negotiated.