The Future Of School Funding 1

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Information about The Future Of School Funding 1

Published on April 2, 2008

Author: caroy

Source: slideshare.net

The Future of School Funding CBT/NBA A case study

Demographics Average size school One of each grade pre-k 3 through 8 th grade. Established in 1897 Current building built in 1922 Parish with 600 families Urban eclectic neighborhood. Turnover with stability. 20% of students on free and reduced lunch.

Average size school

One of each grade pre-k 3 through 8 th grade.

Established in 1897

Current building built in 1922

Parish with 600 families

Urban eclectic neighborhood.

Turnover with stability.

20% of students on free and reduced lunch.

Three Current Models Subsidy Driven Model 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. Stewardship Model Tithing is the norm not the exception. Parish is cash rich and subsidizes everything. No tuition is charged. Example: Witchita, KS Tuition Driven: CBT / NBA Tuition and fees cover a minimum of 70% of costs and parish subsidy is directed towards those families in need.

Subsidy Driven Model

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.

Stewardship Model

Tithing is the norm not the exception. Parish is cash rich and subsidizes everything. No tuition is charged. Example: Witchita, KS

Tuition Driven: CBT / NBA

Tuition and fees cover a minimum of 70% of costs and parish subsidy is directed towards those families in need.

Understanding Cost per Student Many families hold the misconception that assessed tuition covers costs. Reality is that most schools charge tuition that is significantly below cost. Cost per student = total operating expenses / # of students

Many families hold the misconception that assessed tuition covers costs.

Reality is that most schools charge tuition that is significantly below cost.

Cost per student = total operating expenses / # of students

St. Mark Catholic School Cost per Student 2004-2005 Total Expenditures: $797,517 Cost per Student: $3,654 2005-2006 Total Expenditures: $782,035 Cost per Student: $3,401

2004-2005

Total Expenditures: $797,517

Cost per Student: $3,654

2005-2006

Total Expenditures: $782,035

Cost per Student: $3,401

Why the decrease in cost per student from 2004-05 to 2005-06? We now have one section of each grade. Right sizing the school enables us to hit a financial sweet spot. Overstaffing must be avoided. Our enrollment grew. We were one of only two schools in the diocese to see positive enrollment growth.

We now have one section of each grade. Right sizing the school enables us to hit a financial sweet spot. Overstaffing must be avoided.

Our enrollment grew. We were one of only two schools in the diocese to see positive enrollment growth.

What type of funding model do we use as a school? 2004-2005 Tuition and Fees accounted for $414,623 or 52% of expenses Parish subsidy was $151,606 or 19% of expenses. Development: auction and fundraising accounted for $25,042 or 3% of expenses. $193,370 or 25% came from the Sloan Endowment and other (P.T.O., donations, interest,preschool etc.)

2004-2005

Tuition and Fees accounted for $414,623 or 52% of expenses

Parish subsidy was $151,606 or 19% of expenses.

Development: auction and fundraising accounted for $25,042 or 3% of expenses.

$193,370 or 25% came from the Sloan Endowment and other (P.T.O., donations, interest,preschool etc.)

What type of funding model do we use as a school? 2005-2006 Tuition and Fees accounted for $434,035 or 56% of expenses Parish subsidy was $135,000 or 17% of expenses. Development: auction and fundraising accounted for $40,000 or 5% of expenses. $173,000 or 22% came from the Sloan Endowment and other (P.T.O., donations, interest, preschool etc.)

2005-2006

Tuition and Fees accounted for $434,035 or 56% of expenses

Parish subsidy was $135,000 or 17% of expenses.

Development: auction and fundraising accounted for $40,000 or 5% of expenses.

$173,000 or 22% came from the Sloan Endowment and other (P.T.O., donations, interest, preschool etc.)

What type of funding model do we use as a school? We use a subsidy model that is offset partially by the availability of the Sloan money: $120,000 per year. Original intent of the Sloan money was to pay increased teacher salaries. The reality is dramatically different.

We use a subsidy model that is offset partially by the availability of the Sloan money: $120,000 per year.

Original intent of the Sloan money was to pay increased teacher salaries. The reality is dramatically different.

Origin of the Subsidy Model Began with immigrant Church. Tuition is low and parish presumes poverty or inability to pay on the part of all school families. Everyone regardless of need or wealth receives this subsidy. Based on inexpensive staffing of the school and real poverty on the part of immigrants.

Began with immigrant Church.

Tuition is low and parish presumes poverty or inability to pay on the part of all school families.

Everyone regardless of need or wealth receives this subsidy.

Based on inexpensive staffing of the school and real poverty on the part of immigrants.

Keys to success of Subsidy model: Large parish population spreads out burden of operating school. Staffing by religious keeps salary artificially low. Low mobility rate keeps parish support loyal and constant. Investment in staying power. Past subsidized families grow into becoming the subsidy giver.

Large parish population spreads out burden of operating school.

Staffing by religious keeps salary artificially low.

Low mobility rate keeps parish support loyal and constant.

Investment in staying power. Past subsidized families grow into becoming the subsidy giver.

Problems for the Subsidy Model The driving premise no longer meets reality. 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%) 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). The building– Old facilities = more money lost on repairs, maintenance, and utilities. Technology: a high quality education involves the integration of technology. That means $.

The driving premise no longer meets reality.

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%)

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).

The building– Old facilities = more money lost on repairs, maintenance, and utilities.

Technology: a high quality education involves the integration of technology. That means $.

Problems for the Subsidy Model Parish Burdened Catholic Schools are the American Church’s best tool for evangelization. If financially mismanaged they create a substantial crippling burden. This ever growing burden leads to the need to control costs. 80% of costs are usually applied to salary. Low salaries = low morale, high turnover and poorer programs. The need to take the leftovers – dance of the lemons. Poor programs lead to lack of interest and downward enrollment which leads to closure / consolidation.

Parish Burdened

Catholic Schools are the American Church’s best tool for evangelization. If financially mismanaged they create a substantial crippling burden.

This ever growing burden leads to the need to control costs.

80% of costs are usually applied to salary.

Low salaries = low morale, high turnover and poorer programs.

The need to take the leftovers – dance of the lemons.

Poor programs lead to lack of interest and downward enrollment which leads to closure / consolidation.

How much parish $ does your family receive?

Current Reality Parish has lost membership making subsidy more difficult to maintain. Increased mobility of American life decreases staying power. Those receiving the subsidy aren’t hanging around to give it. People move and are relocated. Higher % of non-parish families (1/4) is good and bad. Higher tuition but still being subsidized by our parish. Change in behavior / funding attitude. Members in name only. Do not attend Mass or support parish. Gone when students are gone.

Parish has lost membership making subsidy more difficult to maintain.

Increased mobility of American life decreases staying power. Those receiving the subsidy aren’t hanging around to give it. People move and are relocated.

Higher % of non-parish families (1/4) is good and bad. Higher tuition but still being subsidized by our parish.

Change in behavior / funding attitude.

Members in name only. Do not attend Mass or support parish.

Gone when students are gone.

Cost based Tuition / Needs Based Assistance Growing model of school funding. Leads to greater financial security. Meets needs of current reality. No longer presumes poverty – most Catholics are middle to upper middle class. Subsidy applied to those who need it. Greater accountability and stewardship with the Church’s money.

Growing model of school funding.

Leads to greater financial security.

Meets needs of current reality.

No longer presumes poverty – most Catholics are middle to upper middle class.

Subsidy applied to those who need it.

Greater accountability and stewardship with the Church’s money.

Basics of CBT / NBA Tuition is set at or above 70% real cost. Cost as real dollar value. = expenses / students Cost as real dollar value after 3 rd source funding is accounted for.= (cost – (auction + sloan +other))/ enrollment Sibling Breaks Do not exist Works under premise that sibling break presumes poverty where it might not be. Sticker tuition is irrelevant to a family’s ability to pay. Needs Based Assistance is available Explains and promotes assistance program. Objective financial services used PSAS / Facts / SMART to determine availability to pay. 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.

Tuition is set at or above 70% real cost.

Cost as real dollar value. = expenses / students

Cost as real dollar value after 3 rd source funding is accounted for.= (cost – (auction + sloan +other))/ enrollment

Sibling Breaks Do not exist

Works under premise that sibling break presumes poverty where it might not be.

Sticker tuition is irrelevant to a family’s ability to pay.

Needs Based Assistance is available

Explains and promotes assistance program.

Objective financial services used PSAS / Facts / SMART to determine availability to pay.

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.

Basics of CBT / NBA Parish dollars are directed towards families who need it rather than everyone. Families who can pay more do pay more. Secures the financial future of the school. Families in the middle are forced to prioritize some items.

Parish dollars are directed towards families who need it rather than everyone.

Families who can pay more do pay more.

Secures the financial future of the school.

Families in the middle are forced to prioritize some items.

Basics of CBT / NBA Success depends on implementation. Done over a period of 4-6 years makes it manageable. Educate, Educate, Educate,. Schools who successfully implement the model have educated their constituents about CBT / NBA. Focus on Needs Based Assistance. 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”. More education = a smaller enrollment dip. Schools who experience the dip gain it back in time.

Success depends on implementation.

Done over a period of 4-6 years makes it manageable.

Educate, Educate, Educate,. Schools who successfully implement the model have educated their constituents about CBT / NBA.

Focus on Needs Based Assistance.

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”.

More education = a smaller enrollment dip.

Schools who experience the dip gain it back in time.

Basics of CBT / NBA Non-Parish Rate must reflect cost above parish rate. Recommended to utilize tuition management – FACTS Outsourced for same reason companies outsource payroll. Collections increase – force priority. School no longer the collection agency. Focus on mission. Cost is nominal. Ease of implementation and pay.

Non-Parish Rate must reflect cost above parish rate.

Recommended to utilize tuition management – FACTS

Outsourced for same reason companies outsource payroll.

Collections increase – force priority.

School no longer the collection agency.

Focus on mission.

Cost is nominal.

Ease of implementation and pay.

Where we are at…. Subsidy model is guiding us in wrong direction in terms of funding. Our salary is the worst in the area. Shrinking parish = bigger burden as % of parish income. Increased mobility, lack of staying power, and changing attitudes – Mass practices makes continuing a subsidy model more difficult.

Subsidy model is guiding us in wrong direction in terms of funding.

Our salary is the worst in the area.

Shrinking parish = bigger burden as % of parish income.

Increased mobility, lack of staying power, and changing attitudes – Mass practices makes continuing a subsidy model more difficult.

Where we are at…. Good News Not in debt We don’t borrow to meet payroll. We have an exceptional and loyal staff. We have a community committed to Catholic education. The Sloan Fund is a great resource and gift, making cost based tuition needs based assistance easier to implement. Auction , Civic-Center, and other fundraisers can spur 3 rd source funding. Many unexplored 3 rd source funding avenues exist. Enrollment growing.

Good News

Not in debt

We don’t borrow to meet payroll.

We have an exceptional and loyal staff.

We have a community committed to Catholic education.

The Sloan Fund is a great resource and gift, making cost based tuition needs based assistance easier to implement.

Auction , Civic-Center, and other fundraisers can spur 3 rd source funding.

Many unexplored 3 rd source funding avenues exist.

Enrollment growing.

Where do we want to go…? Adopt a plan to become tuition driven over the next 4 to 6 years or not? Make decisions based on personal ease or for the long term stability of the school and Catholic tradition that we are accountable to? 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%. Do we want to lay a strong foundation for a solid future?

Adopt a plan to become tuition driven over the next 4 to 6 years or not?

Make decisions based on personal ease or for the long term stability of the school and Catholic tradition that we are accountable to?

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%.

Do we want to lay a strong foundation for a solid future?

My recommendation… Adopt a four to six year plan now… Secure a solid funding model for our new future… Begin a plan to pay 80% within four to six years coupled with becoming tuition driven. Be ahead of the curve. Educate, educate, educate. Develop more third source funding. Push an understanding of Needs Based Assistance.

Adopt a four to six year plan now…

Secure a solid funding model for our new future…

Begin a plan to pay 80% within four to six years coupled with becoming tuition driven.

Be ahead of the curve.

Educate, educate, educate.

Develop more third source funding.

Push an understanding of Needs Based Assistance.

Your thoughts and comments. Administrators and pastors come and go. It is your family that will be here the longest. What future do you want?

Administrators and pastors come and go. It is your family that will be here the longest. What future do you want?

What Happened? In 2006 the school commission adopted a plan with the backing of the finance committee to shift to a CBT model. The tuition rate for one child and all brackets was raised from $2,400 to $3,000 a 25% increase.

In 2006 the school commission adopted a plan with the backing of the finance committee to shift to a CBT model.

The tuition rate for one child and all brackets was raised from $2,400 to $3,000 a 25% increase.

Continued… The following year base tuition went to $3,200 for one and$4,000 for two. The sibling spread begins to widen.

The following year base tuition went to $3,200 for one and$4,000 for two.

The sibling spread begins to widen.

What effect did it have? Enrollment grew over the period from 200 to 240 students or a 20% increase. Salaries were raised 15% in one year. Technology was rehabbed. Spanish, librarian, and a counseling position were added. Tuition and fees account for 70% of expenses

Enrollment grew over the period from 200 to 240 students or a 20% increase.

Salaries were raised 15% in one year.

Technology was rehabbed.

Spanish, librarian, and a counseling position were added.

Tuition and fees account for 70% of expenses

Keys to success: 1. Communication 2. Reaching middle class families 3. Professional Needs Assessment 4. Share annual information with families. Where does it go? 5. Stop acting like beggars and start focusing on learning. 6. Break down increase to smallest monthly amount.

1. Communication

2. Reaching middle class families

3. Professional Needs Assessment

4. Share annual information with families. Where does it go?

5. Stop acting like beggars and start focusing on learning.

6. Break down increase to smallest monthly amount.

Can it be done in your school? Every school is different. Education is the key. Overcome fear of what if? Use the increased revenue to better the school in a tangible way. Promote the difference.

Every school is different.

Education is the key.

Overcome fear of what if?

Use the increased revenue to better the school in a tangible way.

Promote the difference.

Want more info or samples Email to: [email_address]

Email to:

[email_address]

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