Diluting the brand for short-term gain

I've been somewhat fascinated and somewhat puzzled while covering a local school-closure review within my district's Catholic board.
The review itself just passed, after a marathon meeting last night, its third public-input meeting. The fourth and final public-input meeting is scheduled for Oct. 13, after which the committee will continue to hold working meetings as it develops its recommendations and its report. Documents are all posted here.
This is the first school-closure review under the post-2006 guidelines for this board. Its coterminous English public board is already on its third round of closure reviews since 2007, with three schools already closed in the coverage area, one new school opened, one high school closing in a few weeks, four schools closing in June 2011 with a new school and four more expansions pegged to open in September 2011.
In this case, one of the schools recommended by administration for closure was under the gun in 2002-03 (under the old rules) and then was saved when boards were told they could no longer gerrymander student counts by closing some schools to create over-capacity schools in other places to generate new-pupil-place grant. The other school recommended for closure is a very small rural school, furthest east in the district, with a body count (note I didn't say FTE) of under 100 students K-8.
What has surprised me is that over and over, parents of the schools under the gun keep bringing up this board's registration requirement for elementary schools. Unlike other Catholic boards in the region, this board requires Roman Catholic baptismal certificates for the children attending the school and at least one of the child's parents.
A repeated theme is that this is too restrictive. Many believe that allowing non-Catholics (but likely still Christian) into the Catholic school will be one of a few panaceas to boost enrolment and bring the smallest school out of the "fewer than 100 students" danger zone. They see it as an opportunity to evangelize, as the non-Catholics admitted would be immersed in the faith and, hopefully, converted.
For the record, as stated in this space before, though I'm a graduate of a Catholic school system, I support a single publicly funded system-- one English, one French.
The trustee chair of the committee, along with administrative support staff members, have repeatedly told the people asking for this the board reviewed the policy two years ago and kept it as is. Trustees are concerned that opening the doors in elementary schools to non-Catholics will dilute their schools and then make it more difficult to hire only Catholics. They contend doing so could be the slippery slope that would only fuel the argument there should be no Catholic schools at all. This is a board where faith is a matter to be staunchly defended-- we're in a bible belt, but Catholicism is far from the dominant Christian faith.
The challenge is the number of Catholics as a proportion of the overall population in the area is declining. A demographer (who was largely ignored by a public whose minds are swollen with Toyota-fuelled impressions we're booming, which we're not) told the crowd only 19% of the population in this region sends their kids to Catholic schools, and that number is declining. The board already knows that over 90% of Catholic school supporters send their kids to Catholic schools, so there are few Catholics not attending Catholic school in the area.
So, in a shrinking market, do you batten down the hatches to protect what makes you unique? Or do you throw open the doors and let anyone come through to boost your numbers?
What all this ignores, of course, is that despite any short- or medium-term gain allowing non-Catholics into these Catholic elementary schools might provide, it doesn't erase the overall drop in the number of school-aged children. One would think the closure and consolidation of the smallest school's neighbouring public school this past year would cement that impression. It hasn't.
Given that, I don't see the benefit of diluting the brand, so to speak.
The money here is in getting Catholics to send their kids to Catholic schools. Most already do in the area. Loosening the restrictions, regardless of how I might actually feel about them, is a Band-Aid solution at best that does nothing to address the long-term issue of declining enrolment. The only thing that addresses the long-term decline is more babies. Be fruitful.