The 2026 Tidal Wave

The 2026 Tidal Wave

The ability to see trends developing well in advance—while planning for future challenges—is Job #1 for any fiduciary serving in the public or private arena.

One trend surfacing over the last several years has been the upcoming enrollment challenge for educational institutions.  

The correlation between hard economic times and a lower birth rate exists. This is especially true for the period of 2008-2009, when our country encountered one of its greatest financial crises since the Great Depression of the 1930s. During that period of uncertainty, a lower birth rate (by double digits!) occurred.

Years later, the results of that lower birth rate are having a dramatic effect on secondary schools with lower enrollments, also in double digit decrease. This has directly affected the infrastructure, personnel staffing, and financial levels that are all based on a historically normal school student body size.

While the lower birth rate indicates a bounce back from 2010 and years hence, the window of opportunity to address a smaller student body is present if addressed proactively. Any reaction would be seen as too late to protect against a significant financial downside.

It is important to note that this effect on secondary education now will become an inevitable tidal wave to hit higher Ed institutions in a relatively short time.

The financial and competitive environment in 2026 and 2027 could be enough of a factor to reshape an institution or even threaten its survival. 

This is the time for higher Ed boards of trustees and administrators to plan for this event, especially since the trend is an undeniable fact.

The university for which I serve as a trustee is already planning for this upcoming period. With a proactive liquidity strategy put in place three years ago, this university has viewed and managed all cash as an asset that will generate over $7 million in new revenue. That “cushion” will serve as a reserve for possible disruption in tuition cash flow over the coming years.

The ability to put a strategy in place for such a disruption will be expected by fiduciaries to institutions serving the public and student bodies.

At three+one®, our proprietary cashvest® platform can formulate a liquidity strategy while also providing a new source of revenue that can be used to build your reserve funds to strong and surprising levels.

The year 2026 need not be higher Ed’s Achilles heel. Rather than inducing panic, this pivotal year, just six years out, should be viewed as an opportunity to reshape the financial strength of higher Ed. We see the future of education to be extremely bright, with greater diversity and eager minds with a global perspective.

With sound financial planning, started well in advance, we can preserve the foundation of great education, today and for generations to come.

A Pile of Paper…or Not

A Pile of Paper…or Not

The clock is ticking, it’s 2:00 pm. In front of you is a pile of eight thick envelopes, each containing some 250 pages of paper, weighing 20 pounds or more, all told.

In the pile are the repliefrom the eight different banks that responded to your entity’s Request for Proposal (RFP) for banking services.

The committee you assembled to review and score these RFPs looks on with apprehension and bleary eyes as each envelope is opened and tasks are parceled outIts up to this group to read over 2000 pages, figuring out all the bank lingo, comparing your banking needs to the services being offered, and considering price comparisons.

Two weeks go by, maybe more. The elite group reconvenes and discusses comparisons and possible assumptions of what these eight banks may mean in their confusing phrases, disclaimers, smallprint disclosures, and pricing that varies widely.

When the time finally comes to rank each bank against the others, one team member suggests throwing darts to see which one gets a bullseye. That may be easier than figuring out which bank is the best overall fit, she adds.

Tons of paper to wade through, maybe even months of confusion and delays, and then there still may be angst about changing banks. Such are the fears finance officers have on their mindwhen considering even issuing a bank RFP in the first placeOne may think it’s better to leave everything “as is” rather than to start the processunless an RFP is mandated.

The fears of hearing the words bank RFP” can be a thing of the past. With three+one®’s rfpPrep®, the first online banking RFP service for public entities and higher Ed institutions, the ease in issuing, reviewing, and objectively scoring RFPs has never been easier.

Our proprietary rfpPrep® software cuts the bankRFP process down from months to weeks, creating highly competitive responses and pricing that is easy to understand because you’re able to truly compare “apples to apples.” Instead of reams of paper, emphasis is placed on strong banking relationships, and the most competitive pricing in the marketplace.

The best part of rfpPrep® is that it’s 85% more efficient and 75% more cost effective vs. the RFP practices to which you’ve become accustomed.

The future is here, and rfpPrep® can be used for banking, investment advisory, and insurance RFPs.

Save the fret, time, and paper by putting three+one®’s rfpPrep® service to work. Instead of fearing the process, your team will have more time to meet the needs of those you serve. You’ll save money and the environment—and rest assured of a stronger banking relationship in both services and pricing.

Shifting Focus on Liquidity

Shifting Focus on Liquidity

Liquidity data has, again, come into focus as S&P Global Ratings has reassessed its local government ratings measures to include seven new criteria of which one is “liquidity.” The new “Liquidity Score” actually measures the availability of cash (and cash equivalents) in the short, medium, and long term. Liquidity now makes up 10% of the framework for local GO ratings at S&P.

According to S&P, the chart below outlines a summary of the basis for providing a local government’s GO rating.

Among the other qualitative factors that positively affect this Liquidity Score, two of the most often highlighted are: (1) Liquidity projections for the current year and the following year, and (2) “Robust and stable” cash-flow capacity compared with peers.

We all know governments carry cash on the balance sheet for liquidity needs, reserves, etc., but do you have a forward-looking analysis evaluating cash and how it can be used to provide stability and generation of value to your taxpayers? According to S&P, this can increase your Liquidity Score and potentially have a positive impact on your entity’s credit rating.

In assessing your entity’s readiness to prepare for more attention and scrutiny regarding liquidity, here are four questions you should consider:

(1) What ongoing mechanisms are in place to help your liquidity management?

(2) Does your entity have control and oversight of liquidity data?

(3) How does your entity qualitatively and quantitatively provide liquidity data to help maximize the value brought to the taxpayers on cash?

(4) What is your entity’s cash-flow capacity compared with peers?

Aside from credit rating agencies placing an emphasis on liquidity, liquidity data have also come into focus as FASB issued an Accounting Standards Update (ASU) requiring not-for-profit entities to disclose in the notes to their financial statements relevant information about their liquidity position. These liquidity disclosures require numerical details about the actual liquidity position of a not-for-profit.

Your entity may have controls, internal experts, and time to provide and perform these types of analyses on a regular basis, and if not, three+one® can provide you with the tools, data, and peer comparisons to ensure you’re always prepared to have a credit rating that looks its best.