The Future of School Funding CBT/NBA A case study
Demographics <ul><li>Average size school </li></ul><ul><li>One of each grade pre-k 3 through 8 th  grade. </li></ul><ul><l...
Three Current Models <ul><li>Subsidy Driven Model </li></ul><ul><ul><li>Revenues from tuition and fees do not cover costs....
Understanding Cost per Student <ul><li>Many families hold the misconception that assessed tuition covers costs. </li></ul>...
St. Mark Catholic School  Cost per Student <ul><li>2004-2005  </li></ul><ul><li>Total Expenditures:  $797,517 </li></ul><u...
Why the decrease in cost per student from 2004-05 to 2005-06? <ul><li>We now have one section of each grade.  Right sizing...
What type of funding model do we use as a school? <ul><li>2004-2005  </li></ul><ul><ul><li>Tuition and Fees accounted for ...
What type of funding model do we use as a school? <ul><li>2005-2006  </li></ul><ul><ul><li>Tuition and Fees accounted for ...
What type of funding model do we use as a school? <ul><li>We use a subsidy model that is offset partially by the availabil...
Origin of the Subsidy Model <ul><li>Began with immigrant Church. </li></ul><ul><li>Tuition is low and parish presumes pove...
Keys to success of Subsidy model: <ul><li>Large parish population spreads out burden of operating school. </li></ul><ul><l...
Problems for the Subsidy Model <ul><li>The driving premise no longer meets reality. </li></ul><ul><ul><li>The nuns left. L...
Problems for the Subsidy Model <ul><li>Parish Burdened </li></ul><ul><ul><li>Catholic Schools are the American Church’s be...
How much parish $ does your family receive?
Current Reality <ul><li>Parish has lost membership making subsidy more difficult to maintain. </li></ul><ul><li>Increased ...
Cost based Tuition / Needs Based Assistance <ul><li>Growing model of school funding. </li></ul><ul><li>Leads to greater fi...
Basics of CBT / NBA <ul><li>Tuition is set at or above 70% real cost. </li></ul><ul><ul><li>Cost as real dollar value. = e...
Basics of CBT / NBA <ul><li>Parish dollars are directed towards families who need it rather than everyone. </li></ul><ul><...
Basics of CBT / NBA <ul><li>Success depends on implementation. </li></ul><ul><ul><li>Done over a period of 4-6 years makes...
Basics of CBT / NBA <ul><li>Non-Parish Rate must reflect cost above parish rate.  </li></ul><ul><li>Recommended to utilize...
Where we are at…. <ul><li>Subsidy model is guiding us in wrong direction in terms of funding. </li></ul><ul><li>Our salary...
Where we are at…. <ul><li>Good News </li></ul><ul><li>Not in debt </li></ul><ul><li>We don’t borrow to meet payroll. </li>...
Where do we want to go…? <ul><li>Adopt a plan to become tuition driven over the next 4 to 6 years or not? </li></ul><ul><l...
My recommendation… <ul><li>Adopt a four to six year plan now… </li></ul><ul><li>Secure a solid funding model for our new f...
Your thoughts and comments. <ul><li>Administrators and pastors come and go.  It is your family that will be here the longe...
What Happened? <ul><li>In 2006 the school commission adopted a plan with the backing of the finance committee to shift to ...
Continued… <ul><li>The following year base tuition went to $3,200 for one and$4,000 for two. </li></ul><ul><li>The sibling...
What effect did it have? <ul><li>Enrollment grew over the period from 200 to 240 students or a 20% increase. </li></ul><ul...
Keys to success: <ul><li>1.  Communication </li></ul><ul><li>2. Reaching middle class families </li></ul><ul><li>3.  Profe...
Can it be done in your school? <ul><li>Every school is different. </li></ul><ul><li>Education is the key. </li></ul><ul><l...
Want more info or samples <ul><li>Email to: </li></ul><ul><ul><li>[email_address] </li></ul></ul>
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The Future Of School Funding 1

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The Future Of School Funding 1

  1. 1. The Future of School Funding CBT/NBA A case study
  2. 2. Demographics <ul><li>Average size school </li></ul><ul><li>One of each grade pre-k 3 through 8 th grade. </li></ul><ul><li>Established in 1897 </li></ul><ul><li>Current building built in 1922 </li></ul><ul><li>Parish with 600 families </li></ul><ul><li>Urban eclectic neighborhood. </li></ul><ul><li>Turnover with stability. </li></ul><ul><li>20% of students on free and reduced lunch. </li></ul>
  3. 3. Three Current Models <ul><li>Subsidy Driven Model </li></ul><ul><ul><li>Revenues from tuition and fees do not cover costs. Typically tuition and fees account for around 50% of cost. Difference made up by large parish subsidy. </li></ul></ul><ul><li>Stewardship Model </li></ul><ul><ul><li>Tithing is the norm not the exception. Parish is cash rich and subsidizes everything. No tuition is charged. Example: Witchita, KS </li></ul></ul><ul><li>Tuition Driven: CBT / NBA </li></ul><ul><ul><li>Tuition and fees cover a minimum of 70% of costs and parish subsidy is directed towards those families in need. </li></ul></ul>
  4. 4. Understanding Cost per Student <ul><li>Many families hold the misconception that assessed tuition covers costs. </li></ul><ul><li>Reality is that most schools charge tuition that is significantly below cost. </li></ul><ul><li>Cost per student = total operating expenses / # of students </li></ul>
  5. 5. St. Mark Catholic School Cost per Student <ul><li>2004-2005 </li></ul><ul><li>Total Expenditures: $797,517 </li></ul><ul><li>Cost per Student: $3,654 </li></ul><ul><li>2005-2006 </li></ul><ul><li>Total Expenditures: $782,035 </li></ul><ul><li>Cost per Student: $3,401 </li></ul>
  6. 6. Why the decrease in cost per student from 2004-05 to 2005-06? <ul><li>We now have one section of each grade. Right sizing the school enables us to hit a financial sweet spot. Overstaffing must be avoided. </li></ul><ul><li>Our enrollment grew. We were one of only two schools in the diocese to see positive enrollment growth. </li></ul>
  7. 7. What type of funding model do we use as a school? <ul><li>2004-2005 </li></ul><ul><ul><li>Tuition and Fees accounted for $414,623 or 52% of expenses </li></ul></ul><ul><ul><li>Parish subsidy was $151,606 or 19% of expenses. </li></ul></ul><ul><ul><li>Development: auction and fundraising accounted for $25,042 or 3% of expenses. </li></ul></ul><ul><ul><li>$193,370 or 25% came from the Sloan Endowment and other (P.T.O., donations, interest,preschool etc.) </li></ul></ul>
  8. 8. What type of funding model do we use as a school? <ul><li>2005-2006 </li></ul><ul><ul><li>Tuition and Fees accounted for $434,035 or 56% of expenses </li></ul></ul><ul><ul><li>Parish subsidy was $135,000 or 17% of expenses. </li></ul></ul><ul><ul><li>Development: auction and fundraising accounted for $40,000 or 5% of expenses. </li></ul></ul><ul><ul><li>$173,000 or 22% came from the Sloan Endowment and other (P.T.O., donations, interest, preschool etc.) </li></ul></ul>
  9. 9. What type of funding model do we use as a school? <ul><li>We use a subsidy model that is offset partially by the availability of the Sloan money: $120,000 per year. </li></ul><ul><li>Original intent of the Sloan money was to pay increased teacher salaries. The reality is dramatically different. </li></ul>
  10. 10. Origin of the Subsidy Model <ul><li>Began with immigrant Church. </li></ul><ul><li>Tuition is low and parish presumes poverty or inability to pay on the part of all school families. </li></ul><ul><li>Everyone regardless of need or wealth receives this subsidy. </li></ul><ul><li>Based on inexpensive staffing of the school and real poverty on the part of immigrants. </li></ul>
  11. 11. Keys to success of Subsidy model: <ul><li>Large parish population spreads out burden of operating school. </li></ul><ul><li>Staffing by religious keeps salary artificially low. </li></ul><ul><li>Low mobility rate keeps parish support loyal and constant. </li></ul><ul><li>Investment in staying power. Past subsidized families grow into becoming the subsidy giver. </li></ul>
  12. 12. Problems for the Subsidy Model <ul><li>The driving premise no longer meets reality. </li></ul><ul><ul><li>The nuns left. Lay staff deserve and require a just wage: Our diocese defines just wage as 80% of local public school. (we currently pay 66.12%) </li></ul></ul><ul><ul><li>Education changed: 60 students to a room with no specials doesn’t cut it. Quality education today means specialization, trained staff, lower ratios, and support staff (counselors/resource). </li></ul></ul><ul><ul><li>The building– Old facilities = more money lost on repairs, maintenance, and utilities. </li></ul></ul><ul><ul><li>Technology: a high quality education involves the integration of technology. That means $. </li></ul></ul>
  13. 13. Problems for the Subsidy Model <ul><li>Parish Burdened </li></ul><ul><ul><li>Catholic Schools are the American Church’s best tool for evangelization. If financially mismanaged they create a substantial crippling burden. </li></ul></ul><ul><ul><li>This ever growing burden leads to the need to control costs. </li></ul></ul><ul><ul><li>80% of costs are usually applied to salary. </li></ul></ul><ul><ul><li>Low salaries = low morale, high turnover and poorer programs. </li></ul></ul><ul><ul><li>The need to take the leftovers – dance of the lemons. </li></ul></ul><ul><ul><li>Poor programs lead to lack of interest and downward enrollment which leads to closure / consolidation. </li></ul></ul>
  14. 14. How much parish $ does your family receive?
  15. 15. Current Reality <ul><li>Parish has lost membership making subsidy more difficult to maintain. </li></ul><ul><li>Increased mobility of American life decreases staying power. Those receiving the subsidy aren’t hanging around to give it. People move and are relocated. </li></ul><ul><li>Higher % of non-parish families (1/4) is good and bad. Higher tuition but still being subsidized by our parish. </li></ul><ul><li>Change in behavior / funding attitude. </li></ul><ul><ul><li>Members in name only. Do not attend Mass or support parish. </li></ul></ul><ul><ul><li>Gone when students are gone. </li></ul></ul>
  16. 16. Cost based Tuition / Needs Based Assistance <ul><li>Growing model of school funding. </li></ul><ul><li>Leads to greater financial security. </li></ul><ul><li>Meets needs of current reality. </li></ul><ul><li>No longer presumes poverty – most Catholics are middle to upper middle class. </li></ul><ul><li>Subsidy applied to those who need it. </li></ul><ul><li>Greater accountability and stewardship with the Church’s money. </li></ul>
  17. 17. Basics of CBT / NBA <ul><li>Tuition is set at or above 70% real cost. </li></ul><ul><ul><li>Cost as real dollar value. = expenses / students </li></ul></ul><ul><ul><li>Cost as real dollar value after 3 rd source funding is accounted for.= (cost – (auction + sloan +other))/ enrollment </li></ul></ul><ul><li>Sibling Breaks Do not exist </li></ul><ul><ul><li>Works under premise that sibling break presumes poverty where it might not be. </li></ul></ul><ul><ul><li>Sticker tuition is irrelevant to a family’s ability to pay. </li></ul></ul><ul><li>Needs Based Assistance is available </li></ul><ul><ul><li>Explains and promotes assistance program. </li></ul></ul><ul><ul><li>Objective financial services used PSAS / Facts / SMART to determine availability to pay. </li></ul></ul><ul><ul><li>Includes consideration for multiple children, college tuition etc. Takes subjective feelings out of the mechanism. Objective data leads to what a family can be expected to pay. </li></ul></ul>
  18. 18. Basics of CBT / NBA <ul><li>Parish dollars are directed towards families who need it rather than everyone. </li></ul><ul><li>Families who can pay more do pay more. </li></ul><ul><li>Secures the financial future of the school. </li></ul><ul><li>Families in the middle are forced to prioritize some items. </li></ul>
  19. 19. Basics of CBT / NBA <ul><li>Success depends on implementation. </li></ul><ul><ul><li>Done over a period of 4-6 years makes it manageable. </li></ul></ul><ul><ul><li>Educate, Educate, Educate,. Schools who successfully implement the model have educated their constituents about CBT / NBA. </li></ul></ul><ul><ul><li>Focus on Needs Based Assistance. </li></ul></ul><ul><ul><li>Expect enrollment to drop 10%. Some people will refuse to prioritize, not value Catholic education, or be too proud to apply for funding or stuck in the “way things used to be”. </li></ul></ul><ul><ul><li>More education = a smaller enrollment dip. </li></ul></ul><ul><ul><li>Schools who experience the dip gain it back in time. </li></ul></ul>
  20. 20. Basics of CBT / NBA <ul><li>Non-Parish Rate must reflect cost above parish rate. </li></ul><ul><li>Recommended to utilize tuition management – FACTS </li></ul><ul><ul><li>Outsourced for same reason companies outsource payroll. </li></ul></ul><ul><ul><li>Collections increase – force priority. </li></ul></ul><ul><ul><li>School no longer the collection agency. </li></ul></ul><ul><ul><ul><li>Focus on mission. </li></ul></ul></ul><ul><ul><ul><li>Cost is nominal. </li></ul></ul></ul><ul><ul><ul><li>Ease of implementation and pay. </li></ul></ul></ul>
  21. 21. Where we are at…. <ul><li>Subsidy model is guiding us in wrong direction in terms of funding. </li></ul><ul><li>Our salary is the worst in the area. </li></ul><ul><li>Shrinking parish = bigger burden as % of parish income. </li></ul><ul><li>Increased mobility, lack of staying power, and changing attitudes – Mass practices makes continuing a subsidy model more difficult. </li></ul>
  22. 22. Where we are at…. <ul><li>Good News </li></ul><ul><li>Not in debt </li></ul><ul><li>We don’t borrow to meet payroll. </li></ul><ul><li>We have an exceptional and loyal staff. </li></ul><ul><li>We have a community committed to Catholic education. </li></ul><ul><li>The Sloan Fund is a great resource and gift, making cost based tuition needs based assistance easier to implement. </li></ul><ul><li>Auction , Civic-Center, and other fundraisers can spur 3 rd source funding. </li></ul><ul><li>Many unexplored 3 rd source funding avenues exist. </li></ul><ul><li>Enrollment growing. </li></ul>
  23. 23. Where do we want to go…? <ul><li>Adopt a plan to become tuition driven over the next 4 to 6 years or not? </li></ul><ul><li>Make decisions based on personal ease or for the long term stability of the school and Catholic tradition that we are accountable to? </li></ul><ul><li>Commit to social justice? Pay adequate or continue to make excuses, “we can’t afford this.” Maybe we can’t afford not to pay 80%. </li></ul><ul><li>Do we want to lay a strong foundation for a solid future? </li></ul>
  24. 24. My recommendation… <ul><li>Adopt a four to six year plan now… </li></ul><ul><li>Secure a solid funding model for our new future… </li></ul><ul><li>Begin a plan to pay 80% within four to six years coupled with becoming tuition driven. </li></ul><ul><li>Be ahead of the curve. </li></ul><ul><li>Educate, educate, educate. </li></ul><ul><li>Develop more third source funding. </li></ul><ul><li>Push an understanding of Needs Based Assistance. </li></ul>
  25. 25. Your thoughts and comments. <ul><li>Administrators and pastors come and go. It is your family that will be here the longest. What future do you want? </li></ul>
  26. 26. What Happened? <ul><li>In 2006 the school commission adopted a plan with the backing of the finance committee to shift to a CBT model. </li></ul><ul><li>The tuition rate for one child and all brackets was raised from $2,400 to $3,000 a 25% increase. </li></ul>
  27. 27. Continued… <ul><li>The following year base tuition went to $3,200 for one and$4,000 for two. </li></ul><ul><li>The sibling spread begins to widen. </li></ul>
  28. 28. What effect did it have? <ul><li>Enrollment grew over the period from 200 to 240 students or a 20% increase. </li></ul><ul><li>Salaries were raised 15% in one year. </li></ul><ul><li>Technology was rehabbed. </li></ul><ul><li>Spanish, librarian, and a counseling position were added. </li></ul><ul><li>Tuition and fees account for 70% of expenses </li></ul>
  29. 29. Keys to success: <ul><li>1. Communication </li></ul><ul><li>2. Reaching middle class families </li></ul><ul><li>3. Professional Needs Assessment </li></ul><ul><li>4. Share annual information with families. Where does it go? </li></ul><ul><li>5. Stop acting like beggars and start focusing on learning. </li></ul><ul><li>6. Break down increase to smallest monthly amount. </li></ul>
  30. 30. Can it be done in your school? <ul><li>Every school is different. </li></ul><ul><li>Education is the key. </li></ul><ul><li>Overcome fear of what if? </li></ul><ul><li>Use the increased revenue to better the school in a tangible way. </li></ul><ul><li>Promote the difference. </li></ul>
  31. 31. Want more info or samples <ul><li>Email to: </li></ul><ul><ul><li>[email_address] </li></ul></ul>
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