Business as Usual -- or Evolution?

October 19, 2018

This past Wednesday at the ADVIS/E.E. Ford Program, “Transformative Models for Independent School Sustainability“ which was sponsored, in part, by PAISBOA, we heard from John Gulla about some of the ways the E.E. Ford Foundation is helping independent secondary schools become better versions of themselves. One of these is by offering grants to schools and associations, like ADVIS, in the independent school space. Many of the PAISBOA secondary schools have benefitted from these grants to explore ways in which they can “leverage their unique talents, expertise and resources to advance teaching and learning throughout this country by supporting and disseminating best practice, by supporting efforts to develop and implement models of sustainability, and by encouraging collaboration with other institutions.”

Gulla asserted that we (independent schools) are pricing ourselves out of existence, and that according to NAIS, only 15% of their member schools exist in a place where they have enough financial aid resources; the rest live in a world of net tuition revenue.

He introduced his “Three School Category Heuristic” and how a school’s ability to react to internal and external forces will determine their survival.

  • Bucket #1 - Schools with significant financial and/or reputational capital, and/or admission demand are relatively immune from many of the current challenges.
  • Bucket #2 - Schools that recognize the challenges and threats and that are actively, creatively attempting to change.
  • Bucket #3 - Schools that are continuing with “business as usual” without recognition, or at least a meaningful plan, to adapt to a changing landscape and that are most at risk.

Have I gotten your attention??

I attended two other programs led by school leaders whose stories illustrate opposite ends of the financial sustainability continuum. Scott Looney from Hawken School (PK-12) talked about their innovative approach to capturing market share and increasing Hawken’s brand footprint by merging with a K-8 on the other side of town with a similar mission but a different “flavor” of teaching and learning, trying to launch an early childhood program which did not come to fruition, and starting a lab school to ward off low cost competitors. Hawken is trying to maintain their traditional independent school while competing in the “value” space at the same time.

At the other end of the continuum, Charlie Sachs talked about his experience as the interim head of a school which needed an angel donor, a change in mission to differentiate itself from the local competition, a merger with another school, or to liquidate. He talked about school vitality and like John Gulla, referenced three types of schools:

  • Thriving – well endowed, a strategic plan that is being acted upon, and includes a building and renovation plan, filling enrollment by April.
  • Stable – a strategic plan that is not operational, more selective in admission in the past, enrolling students well into the summer.
  • Struggling – need to do something now, think outside the box, move beyond educational rhetoric to educational financing

He went on to say that too many schools are selling the same thing, and that Heads of School need to be the “canary in the coal mine” and call the question without regard for personal career interests. Boards also struggle with the reality of the circumstances and about being the “last board” of a school. However, the #1 priority should be making sure kids and employees are taken care of in the process.

Evolution is key!!!  Ignoring the emerging reality since 2008 -- that middle class families cannot support our independent schools and universities is not going to change our current business model. We need to be committed to understanding and balancing the inter-relationship between academic program and finance. We need to stop believing our own rhetoric and start making the changes that will have some positive impact on the organizational health of our schools before it is too late.

If you are not solidly in John Gulla’s Second Bucket or Charlie Sach’s Stable group -- or even if you are, we need to talk!!! PAISBOA can act as a connector for schools who want to work together in creative ways; we can help facilitate the tough conversations; and we can access our wide network of professionals that can assist you as you identify and look for ways to be the best version of your school.

To that end, I will be hosting a series of roundtable discussions starting next month to continue this conversation for anyone who is interested in exploring ways PAISBOA can be helpful to our member schools and universities as they tackle their own financial well-being.

In the meantime, join us for Organizational Health Day with Scott Barron on Thursday, November 1 (REGISTER HERE).

I have included some articles about the independent school financial model if you would like to read more about it:

 Take advantage of the power of the flock!!

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