Defense Mechanisms and the Wisdom of Crowds

Facing the facts seems to be something alien to our nature; antithetical to our biology and psyche. Psychodynamically, defense mechanisms are something we use to shield ourselves from information damaging to our self-image. Groups, too, have defense mechanisms, and one of the most popular invoked by governing boards confronted with stark and unpleasant economic realities is to assume that someone else will solve the problem.
Even before the current run of horrific economic news, a great many independent schools and not a few colleges and universities were confronting escalating costs and a diminishing elasticity on the price of their product. Capital availability has always been an issue for nonprofits, most of whom lack the deep endowments necessary to fund plant replacement or new technology purchases.
Time and again, we heard--and still hear--those in institutional governance respond by saying that someone else--a philanthropic foundation, a deep-pocket benefactor, a governmental entity--will come through and cover the gap. Maybe for some this will be true, though we seriously doubt that foundations will suddenly become interested in making recurring grants for operations, or that many would-be philanthropists will feel flush enough to donate big-time, or that the government will have much appetite for expanding payments to education (too much already is draining away on two unpopular wars and a growing national debt ... and that was before the Fed bailed out the whole economy this past week).
The hard truth is that boards themselves are going to have to abandon the defense of wishful thinking and reckon with the news that it is they themselves that must pony up. This means making tough decisions as much as it means writing large checks, though it surely means this, too. The truth may be that, despite an institution's noble and worthwhile mission, there may be insufficient cash to support operations or replace capital. If this is the case, then perhaps merging or selling makes most sense. Hoping someone else will pay does not.
But that's in our nature, isn't it? Sure, the Federal bail-out saved us from economic disaster, and therefore was absolutely necessary, but who pays in the long run? Somebody has to, don't they? Maybe another defense mechanism of groups is to pass the buck to the next generation (of taxpayers, board members, students, etc.).