I recently worked with an institution that uncovered a significant structural deficit just months before the start of a new academic year. Leadership initially chose to keep discussions tightly contained while they gathered more information. Within weeks, however, rumors began to spread: program closures, layoffs, even accreditation concerns. None of it was grounded in fact, but by the time leadership started communicating more openly, the damage was already done.
This situation is not unique.
Transparency during times of financial challenge is critical, but if handled poorly, it creates confusion and fear instead of trust. The goal should be to share the right information with the right people at the right time in a way that builds understanding and positions the institution to act.
The institutions I work with tend to ask the same questions. What level of detail should we share? When? With whom? Every situation is different, but a consistent framework can guide these decisions.
A Practical Framework for Financial Transparency
1. Establish a Single Version of the Truth
It’s never helpful to share information that’s incomplete or not fully understood. I often encounter situations where the books are not fully closed, or where leadership is looking at only a portion of institutional activity (for example, the budget rather than full operating results).
Before broader communication begins, it’s worth asking: Are we looking at all unrestricted activity or just the budget? Have we accounted for depreciation? Do we understand the cash flow implications?
In uncertain situations, I often return to the audit as a starting point. It provides a reliable baseline from which we can build a forward-looking view. Without a shared understanding of the facts, transparency can quickly turn into its own problem.
2. Project the Future; Don’t Report the Past
Understanding today’s position is not enough. We must understand where the institution is headed. Five-year projections, grounded in clear assumptions and stress-tested against multiple scenarios, are essential. These projections should include key drivers like enrollment trends, tuition discount rates, retention assumptions, compensation increases, and inflation. A forward-looking view allows leadership to communicate not just where we are, but where we are likely to be, which is far more meaningful.
3. Define the Sense of Urgency
I typically assess urgency based on available cash, board-designated reserves, and access to short-term borrowing. Ultimately, the question is: are we looking at a one-year problem or a five-year problem? The answer shapes strategy and communication. Overstating the problem can create panic, while understating it can delay necessary action. Effective, balanced transparency helps everyone understand both the challenges and the timeline for change.
4. Pair Problems with Pathways
Transparency shouldn’t stop at naming the problem. You don’t necessarily need a fully developed plan before communicating, but you should be able to speak to what kinds of actions may be required, what levers exist—such as revenue, cost, or program mix—and how the institution plans to approach decision-making.
When people hear that there are paths forward, they feel engaged, even if the plan itself is still evolving.
When You’re Ready to Communicate
Who Should Know—and When?
Transparency is most effective when it follows a deliberate sequence. Start with a conversation between the president and CFO. The president is best positioned to lead through change but often needs support in understanding financial dynamics. From there, bring in the cabinet for discussions on the financial outlook and early thinking about solutions. The goal here is alignment, as conflicting messages from this level often fuel campus-wide confusion.
Next, engage the finance committee and board leadership to confirm that governance is on the same page and gather input on communication strategies. Then brief the full board. Broader campus communication to faculty, staff, and students should come last, once leadership and the board are ready to answer questions.
This sequencing ensures that the information shared is clear, consistent, and ready to hold up to scrutiny.
Watch Your Language and Framing
How we communicate is just as important as what we communicate. Consider the difference between “We are facing a financial crisis” and “We are addressing a structural imbalance that will require action over the next several years.” The same goes for “We don’t have all the answers” versus “We have identified several potential paths forward and will engage the community as we refine them.”
Thoughtful framing conveys urgency without triggering unnecessary panic.
Avoid These Pitfalls
Even well-intentioned communication efforts can go wrong. Sharing partial data too early leads to misinterpretation and unnecessary concern. Waiting too long creates space for rumors. Overloading people with detail buries the key message and reduces clarity. And presenting the problem without context or direction leaves everyone feeling powerless.
Avoiding these missteps is just as important as getting the process right.
Plan for What Comes Next
Once you’ve opened broad communication, the public expects updates—even if the message is just that assumptions remain unchanged.
Regular communication signals that leadership is actively managing the situation, not hoping it resolves itself.
The Bigger Picture
When done well, transparent communication does not create panic. Instead, it tends to leave an institution better positioned than before, with clearer governance, stronger board relationships, and a campus community that feels respected and capable of hearing hard news. That broader alignment is what ultimately enables institutions to navigate financial challenges successfully.