2 Iowa Catholic Universities to Combine

Eighteen months after a handful of Roman Catholic college presidents in Iowa gathered to talk about possible greater collaboration, two of those institutions—St. Ambrose University and Mount Mercy University—announced today that they will merge.

Under the arrangement, which was approved by the two universities’ boards last week but still requires regulatory approvals, St. Ambrose will operate Mount Mercy as an independent institution through 2026, when St. Ambrose will become Mount Mercy’s parent organization and operate it as the Mount Mercy Campus of St. Ambrose University.

In a series of interviews in recent months, the presidents of the two institutions, Amy Novak of St. Ambrose and Todd A. Olson of Mount Mercy, took great pains to avoid calling the alliance a merger; their preferred term is “strategic combination.”

“We have no intention of this sounding like some kind of hostile takeover,” Novak said. “This is not about two schools that were likely to close. While one of us [St. Ambrose] is slightly stronger, neither of us is looking at balance sheets that look horrible. This is a proactive effort by two strong institutions to see if we can operate more efficiently, respond with more agility and take advantage of our respective strengths.”

Federal tax forms show St. Ambrose’s revenues outpacing expenditures in the 2022–23 fiscal year ($121 million versus $113 million), with Mount Mercy operating at a slight deficit ($3 million on a budget of about $55 million).

But while neither institution may have been facing immediate existential threat, few college leaders can afford not to be looking for ways to ensure long-term sustainability, the two presidents acknowledged.

“Here at St. Ambrose, if we run the course as is, the 10-year projection gets kind of dire fairly quickly,” said Novak. “We have to be thinking creatively about its future—can we be better, can we do something that gets us to stability for the long haul? Most places try to do little niche-y things that don’t really address the critiques of higher education—small transactional wins that move the needle for 30 students. We thought, what does it look like if we think radically differently about what Catholic higher education looks like in the future?”

‘Not a Great Narrative’

Along with the Northeast, Iowa and its neighbors in the Midwest are an epicenter of financial, demographic and enrollment challenges in higher education. While only one other Iowa independent college has closed recently—Iowa Wesleyan University last year—Drake University is among the numerous Midwestern institutions that have imposed significant budget cuts to try to avert financial peril.

“If you’re living in our territory, it’s not a great narrative right now,” Novak said.

Novak and Olson were among a slightly larger group of Iowa Catholic college presidents who met in January 2023 to explore whether the institutions could “flip from a competitive to a collaborative mindset.” While the gathered leaders shared ideas, most of them were “small fixes that wouldn’t really have sustainable long-term impact on the institutions or student learning,” Novak said.

But she and Olson sensed a mutual “affinity” between themselves and their institutions, based on similarities in their Catholic orientations (St. Ambrose is affiliated with the Roman Catholic Diocese in Davenport, while Mount Mercy was founded by the Sisters of Mercy in Cedar Rapids) and in the leaders’ interest in exploring something “bolder.” The two broke bread again soon after, and they quickly folded their respective boards and leadership teams into the conversations.

Over the months that followed, the two institutions created a set of “integration planning teams,” focused on what Olson called “early adopters” who were interested in thinking creatively about how the two universities might find a new, better way forward.

“We were not going to change the culture by fiat,” said Olson, who noted that he did his graduate work in counseling. When people were invited to participate, some, he said, “backed away and scowled.”

“Those responses are natural; the human nature is to protect,” he said. “Our approach has been to acknowledge tentativeness, that we’re navigating new territory together, just keep exploring a lot of different ways of doing this.”

The two institutions announced an initial partnership in May focused on creating 18 graduate pathways between the two in their respective cities 80 miles apart. The leaders hinted strongly that they favored a deeper collaboration but acknowledged that regulatory hurdles—including recent Biden administration guidelines that make the process for merging colleges more attenuated and often more difficult—could get in the way.

But now that their respective boards have signed off, Novak and Olson are focused on how they and their teams can capitalize on the possibilities of partnership.

“There’s definitely creative tension here,” said Olson. “Between maintaining the individual histories and traditions [of the two universities] and coming together to create something new. Watching faculty leaders from both campuses design a new common shared governance model.”

“Yes, this is as much about integration as about creation,” Novak interjected on a Zoom call. “The chair of the biology department may be at one institution, while the chair of business may be at the other. It’s a journey of thinking about how we co-create.”

Optimistic Campuses

Many colleges that go through mergers tend to leave their employees and students rattled, often because so much has happened behind the scenes that constituents are distrustful.

Richard Barrett, an associate professor of political science who represented Mount Mercy on a joint faculty group exploring the possible partnership, praised leaders of the two institutions for their transparency throughout the process. “If there’s one clear virtue that President Olson has had since the beginning, it’s been honesty,” Barrett said. “If he can’t rule out the negative answer—that thing you’re most worried about—he’ll say so.”

Barrett, who just finished a stint in faculty governance, was among those brought into the inner circle early on around the possible partnership between the two institutions. “We were told two years ago that our institution was looking for ways to collaborate with other small private institutions, especially Catholic ones.”

The higher ed headlines are filled with stories of “schools waiting until it’s too late,” Barrett said. “It’s great to be part of an institution that’s looking 10, 15 years ahead, instead of just one. That’s what I’m most thrilled about: that we have leaders who would do this far enough in advance.”