It’s a pie chart of suggested revenue categories for your school.
If your school is parish-based, a target to consider is 40% of revenue from realized tuition, 40% of revenue from development/advancement activity (which is used for need-based financial aid and/or scholarship), 10% from fundraising, and 10% from the parish(es) and/or church(es) that sponsor your faith-based school.
Is your school there now? No. Can your school do this overnight? No. Can you implement it next year? No. Can you implement moving toward this vision without an advancement professional at your school? No. Does this mean your development director needs to raise 40% of your operational costs? No.
Is it possible? Yes! Is it a vision that you can work toward? Yes! Does that mean that both fundraising and development can exist within the same framework? Yes! Do you have to share this vision with others? Yes! Do you have to have vision, passion and leadership that can bring this and other grand plans to fruition? Yes!
Right now, perhaps your school’s revenue “pie chart” looks a little different that this one. Let’s look at this a little deeper.
Let’s say a K-8 Catholic school has a budget of $800,000 in total revenue. Average tuition revenue at the school is $4,000 per child since the school’s tuition structure is at $4,200 for the first child, $3,900 for the second, $3,600 for the third, etc.), and there are 175 children in the school. That’s $700,000. The parishes associated with the school contribute $80,000, and the school generates $20,000 through fundraising activities.
Probably the first thing that must be realized is that if a parent has 3 children in the school, the tuition bill will be $1170 per month for 10 months. Without financial aid, that monthly payment is probably the second largest monthly bill the family will have. If the household brings in $70,000 per year, consider that this family would be applying for financial aid. Perhaps the family will be able to pay $2000 per child, or $6,000 total. That means the family would need to receive $5,700 in financial aid. That averages to about $1900 per child, and, with 175 children in the school, where is the extra $332,500 going to come from? Development efforts would be a great place to start, but usually some financial aid funds are provided by gifts and grants, while the remainder of the assistance might come from tuition reduction, scrip utilization, or other creative ways of generating revenue, but, chances are, all the revenue is not going to total $800,000.
But lets take a look at the model. $800,000 means $80,000 from the parishes, $80,000 in fundraising, $320,000 in tuition and $320,000 from development revenue. With 175 students in the school, that means the average out-of-pocket tuition a parent would pay is around $1830. $80,000 in fundraising translates to about $460 per child.
Again, that would be “ideal.” But remember, the $320,000 in tuition revenue would be money paid by the parent while the money from development would have to be included in the tuition price. That means that $640,000 would be the amount needed to be gained in revenue from 175 children, which would come from both parent pay tuition and development-generated financial aid, for an average “announced” tuition of about $3,660 per child.
As for the 175 children in the K-8 school, that would mean an average of 19 children in every grade level.
Note that you’ll need a development director to generate a significant amount of financial aid, and an enrollment director to keep recruiting students. Perhaps salary and benefits for 9 teachers is $50,000 each, and then you need a development director, an enrollment director, a substitute teacher who could also act as a marketing director, a principal and an administrative assistant. Let’s say the first of those 3 positions are also at $50,000 salary and benefits, and the principal is at $65,000 and the administrative assistant is at $40,000. That’s a total of $705,000, leaving $95,000 for operational expenses for the school.
So you’re probably wondering where this $320,000 in development revenue is going to come from. Perhaps businesses or foundations. Perhaps major gifts from alumni. Perhaps. The fact of the matter is that most of it is going to come from a place that nobody thinks of it coming from…other parents in the school.
Perhaps that family with three children we mentioned before doesn’t make $70,000, but is able to pay the full cost of tuition for their children. With this mindset, they’ve just made it possible for 3 children with complete financial need to attend the school!
What a concept!
Parents helping other parents to pay for their children’s tuition! It’s community in action, as members of the community help one another. As it says in 2 Corinthians 8:14, “At present, your plenty will supply what they need, so that in turn their plenty will supply what you need. The goal is equality.”
In the past, we’ve seen “subsidy” models, where the church contributes a certain amount to every child to keep tuition low. Each parents received an equal amount of funds for every child in the school. That apparently was the definition of equitable, but it’s not “equality.” Equality means having the same opportunities, and by thinking about tuition differently, you can strengthen your school community, which is the first step to growing your school.
What about those schools that cut the positions of the development director, the enrollment director, and the substitute teacher in order to save $150,000, so that the “development dollars” could be reduced by that amount, and the school’s development piece of the pie would only be $170,000? That would make things so much easier, right?
Perhaps…but that’s what schools have historically done.
And how’s that been working out for you?