Your Strategic Plan Is Built on Assumptions That Might Be About to Break
Chag Pesach Sameach and Happy Easter to everyone celebrating either holiday this week. While we usually wait until after a holiday to publish a new blog post, the significance of today’s content warrants sharing it with our readers now before the time away from work begins.
Italy's defense minister says he can no longer sleep. South Korea's president is staring at the ceiling. The head of the European Central Bank is talking about shocks "beyond what we can imagine." These are people with classified briefings and real-time data feeds. They are not performing anxiety for political effect; rather, they are telling us something important.
And yet, global markets have barely moved. Oil is trading below what many analysts believe it should be, given conditions in the Middle East. The Nasdaq's recent correction is more related to AI valuation jitters than geopolitical risk. The main market narrative remains some version of: the system is absorbing the shock.
Semafor Business Editor Liz Hoffman offered a different perspective last week: we are not witnessing resilience. Instead, we are on borrowed time. Citing analysis by Rystad Energy, Hoffman highlights that the buffers of oil already at sea and the drawdowns from national reserves are being exhausted in real time. The second- and third-order effects — fertilizer-driven crop failures, Asian factory blackouts, helium shortages that disrupt medical imaging, grocery inflation driven by trucking costs — haven't materialized yet. But, as McDonnell notes, "they will arrive, slowly and then all at once."
If you lead an independent school and your strategic plan was finalized in 2024 or early 2025, you need to understand one thing: it was based on a set of macroeconomic assumptions that are currently breaking down under the accumulating weight of geopolitical and economic events.
The Hidden Assumptions
Strategic plans usually don't explicitly state their macroeconomic assumptions. These assumptions are structural but unseen — built into enrollment forecasts, tuition models, capital campaign timelines, and operating budgets. Here are the most important ones and why each is now at risk.
Assumption 1: Family financial capacity is stable or improving.
Most enrollment and tuition models assume that families who can afford your school today will be able to afford it next year, that the pipeline of prospective families is similarly situated, and that the pool of affluent prospective families is growing larger (income polarization at work). This assumption is based on a combination of wealth effects in the equity markets, rising housing values, manageable debt costs, and predictable household expenses for energy and food.
Each of those inputs is now under pressure. Gasoline prices have surged roughly 30% in a month. Grocery inflation is likely to accelerate as energy costs cascade through supply chains. Interest rates, which many expected to drop this year, may instead remain steady or increase as central banks face an impossible choice between fighting inflation and supporting growth. The S&P 500 has given back gains. For families on the edge of affordability — and every school has more of these than they realize — the cumulative effect is a squeeze that first appears as increased requests for financial aid and eventually as student attrition.
Assumption 2: Capital campaigns can proceed on their current timeline.
If your school is in the quiet phase of a capital campaign or planning to launch one in the next twelve months, consider a pause. Major gift fundraising depends on donor liquidity and confidence, both of which are deteriorating. More specifically, a significant share of major gifts to independent schools come from families whose wealth is concentrated in equities, real estate, or — increasingly — private investment vehicles. The equity and real estate stories are obvious. The private credit story is less visible but potentially even more consequential.
As Semafor noted, a slow-motion unraveling is happening in private credit markets — the same structural dynamic that caused the collapse of Silicon Valley Bank, but on quarterly redemption cycles instead of daily deposit withdrawals. If your major donors have substantial exposure to private credit or venture-related funds, their paper wealth might not turn into philanthropic capacity as quickly as your campaign expects.
Assumption 3: Operating costs will follow recent trend lines.
School operating budgets are energy-intensive in ways that aren't always obvious. Transportation (buses, fleet vehicles), food service, building heating and cooling, and the entire supply chain for materials and equipment all have hidden energy costs. When oil prices stay above $100 per barrel, it doesn't just increase your diesel expense. It raises the costs of everything your vendors sell, with a delay of about three to six months.
Simultaneously, if the fertilizer shortages that analysts are projecting materialize, food service costs will spike — and not temporarily. Crop cycles mean that a disruption to fertilizer availability in spring 2026 affects harvests in fall 2026 and food prices into 2027.
Assumption 4: The competitive landscape is static.
Economic stress doesn't affect all schools equally. It reshapes the competitive landscape. Schools with large endowments can increase financial aid when families are squeezed; schools without that buffer cannot. Schools in regions with lower costs of living may become more attractive as families reassess their spending. Schools that have invested in distinctive programs — genuine differentiation rather than mimetic convergence — will retain enrollment better than those competing mainly on the same bundle of features as their peers.
If your strategic plan assumes your competitive position is stable, it's worth asking: stable under what conditions? Because the conditions just changed.
Hedging Bets in Practice
The appropriate response here is not to panic, nor to scrap your strategic plan and start over. It's to do something most schools have never done well: genuine scenario planning.
This is not about identifying three scenarios, assigning probabilities, and then picking the most likely one. That’s simply forecasting disguised as scenario planning. True scenario planning, as Pierre Wack developed at Royal Dutch Shell, involves identifying the factors already in motion — the predetermined elements — and stress-testing your strategy against them, regardless of what might happen next.
Four predetermined elements appear in the current environment:
Energy prices will remain elevated for months, even under optimistic assumptions about the Strait of Hormuz reopening. Damaged infrastructure in Qatar and elsewhere will take years to repair.
Inflation will re-accelerate in the near term, driven by energy costs, and central banks will be constrained in their response.
Family financial stress will increase, with a lag that may make you think things are fine. The families feeling it first are not the ones who will tell you about it first.
Private capital markets are repricing risk, and the effects will cascade into philanthropic capacity and, eventually, endowment valuations.
These are not just hypothetical scenarios; they are already happening. The question is how large and long-lasting they will be. Does this resemble 2022's energy shock — painful but contained within a year? Or does it resemble something structural — a risk revaluation that reshapes the landscape for three to five years? Your strategic plan must be viable in both scenarios. If it's only workable under the first, you don't have a strategy—just a bet. And right now, the most informed people are telling you, through their insomnia, that it's not the bet they would make.
Three Things to Do Right Now
First, run a financial stress test on your enrollment model. What happens to your net tuition revenue if financial aid requests increase by 15%? By 25%? If attrition in your most price-sensitive segments increases by two or three percentage points? Know your numbers before they find you.
Second, if you're in a capital campaign, have an honest conversation with your advancement team about donor capacity. Not willingness — capacity. The two are different, and the gap between them is about to widen. Consider whether a six-month pause in the quiet phase is more prudent than pushing forward into a headwind. If already underway, factor a slowdown in giving into your timeline projections.
Third, gather your leadership team for an assumption audit. Take your strategic plan's key initiatives and surface the economic assumptions each relies on. Write them down. Then ask: which of these assumptions would we still hold today? The ones you wouldn't are where your strategy is most vulnerable — and where your revisions should start.