My last team has an interesting dynamic between comp/social dances. So we have this huge social dance org - that has hundreds of members, ranging from college student to seniors. And our team, which focused more toward the comp side - but we also welcome people wanting to just improve their dancing. Then we have yet another dance group focuses more on the showcase side. To make things slightly more complicated, our school also offers ballroom classes, and you need to go social dancing at least a few times to pass the class - so that is another influx of new faces, though they generally don't stay. Both teams are quite heavily involved in the social dance scene. I mean, one of the main purpose of ballroom dance is to, heck, go out there to dance and to have fun! And it is a great way to practice your dancing (and floorcraft) without the pressure. And due to our training, we are highly "visible" during the social dance, and I know a few people joined our team after seeing us at the social.
As for how college teams try to survive? Obviously I have never involved in the inner circle, but I have heard, talk enough to get a sense, so some grain of salt is advised here. I guess it is like all business, increase income, decrease cost, basically keep a positive flux of money. The main income comes from 1) Support from schools, which plays a pretty big part. 2) Increase memberships through having more new students, and to have a better rate of keeping students. Also, having great coaches live near by helps. 3) related to 2: good promotion. And there are various way to cut down the cost, student instructor is a really good one - that could save you a few thousand dollars per semester.
I know a team has a rather elitist approach - but they are one of the largest and most successful teams in the US, so what do I know - that has a huge (a few hundred, from what I have heard) of beginner which were taught by student instructors. And anything beyond mere beginner, you have to be "invited" - and each level only have about 4~5 couples (they will go as far as pairing partner for you, at least at the beginning). These people were then coached by professionals, having 2~4 hours of group lessons from coaches directly. I guess that is how they get so good.
I have heard of this idea - a "mentor program" of a sort.
http://www.dance-forums.com/threads/have-you-fired-a-student.42679/page-10#post-1000737Basically, the poster suggested to have a "mentor program" - which I thought about it when I was on the team. According to the poster, people came through this progam are much more dedicated to the team, willing to stick out, willing to practice on their own, and having better comp results. Which seems to be quite nice.
I'm easily confused. 
