Score Group 1: Mission-Based Budgeting

InterMountain Christian School
InterMountain Christian School

On February 2-4, 2015 six heads of school gathered in Orlando, FL to think deeply about the concept of mission-based budgeting. Also in attendance were several board members and school finance officers. Below are two ideas that surfaced during our time together (more to come in later blogs):

1) Three Levers – Jake Becker, Head of School at The City School, shared a good conceptual schema of school budgeting. There are essentially three levers that schools can adjust as needed. The first level is that of tuition. From the Independent School Management’s recommendation to charge the full cost of what it costs to educate the student to the multiple student discounts offered at many schools to tuition remission policies for staff, schools have a variety of strategies at their disposal to manipulate the tuition level.

The second lever schools can consider adjusting is the alternative revenue/fundraising lever. From selling boxes of the World’s Finest chocolates to picking up the bill for a family’s first with hope that the school might someday be included in anchoring a strip mall and leasing adjoining space to subsidize tuition.  Schools have a plethora of opportunities (big and small) to manipulate this lever.

And the last lever, expenses. Knowing that 70-85% of most schools expenses are tied up in salaries and benefits, one might think there is little room for the lever to move. Chad Dirkse, one of the CACE Fellows, challenged us to rethink the traditional paradigm of one teacher for 25 students. What if we could put 100 Algebra students in a room with an A+ math teacher, two highly qualified paraprofessionals, and two college math education majors? The student:teacher is now 20:1 and schools can leverage technology to differentiate instruction in powerful ways.

2) Continuous enrollment contracts – Dave Johnson, Head of School at Valley Christian Schools, shared a new enrollment practice at VCS. Continuous/Perpetual enrollment contracts automatically re-enroll students for the next semester if the student has maintained sufficient standing. There are studies that have demonstrated higher retention rates for schools that have such policies in place, most notably within research institutions of higher education as this practice is fairly new for PK-12 schools. Some of the noted benefits of continuous enrollment contracts:

  • Provide appropriate and continued access to school resources for families and students during the PK-12 experience
  • Encourages a school culture of shared mission and vision
  • Simplifies the yearly enrollment and registration process by reducing paperwork
  • Less time spent tracking down current students/families

As with any program, there are some things to be aware of before adoption. Every school culture is unique and administrators should survey families to see if they would like a more streamlined process. Schools who adopt this practice need to communicate well. Changes in tuition, fees, and mission can affect the application. The yearly enrollment contract needs to include late payment policies as well as other collection policies. Not a panacea, but possibly a good solution to a challenging problem.

Check back for more mission-based budgeting best practices at www.cace.org

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