A major problem facing a majority of Christian schools is affordability. Hard economic times examine the field and reveal those schools that have a strong financial plan. Much of what we do in Christian schooling, we do because that's the way we've always done it. I'm sure you agree - that is not a good reason for why we ought to do things at all.
This article will visit a few distinct errors Christian schools fall into that can easily bring financial fracture or ruin to their organization.
ERROR #1: Raising Money the Wrong Way
Almost every Christian school I know has, at one time or another, held events to raise funds...candy sales, gift wrapping, fruit sales, magazine subscriptions...have I hit a raw nerve yet?
These fundraisers are extremely labor intensive for a limited return. Compare the man-hours you put into a single event ... for example, a golf tournament ... 25 volunteers, maybe 60 hours each, on average ... that's 1,500 man-hours of labor spent on one event. Your event does well and makes $25,000 ... that's about $17 an hour you've raised ... and that's if your event does better than most.
And, event-based fundraising is not very self-perpetuating. From year to year, you must get the volunteers to put in the hours to produce the event to make a specific (usually very limited) amount of money.
Instead, your focus should be on building relationships, not trading goods. In order to have a robust annual fund, you must regularly develop and cultivate relationships with those that share your vision and communicate your vision to those that don't (yet!).
And, don't even think about major gifts unless you are cultivating relationships around your differentiated vision.
Relationships are not limited in the way events are. If someone is sold out on your vision, they will communicate that excitement to others. How many people get so excited about your pizza sale that they tell people they know, "hey Joe, you just have to try out this pizza fundraiser my kid's school is doing ... it's great!" No, it's more like, "Joe, look, I bought a magazine subscription from your kid, now I'd appreciate it if you'd buy a pizza from mine."
People get excited about a vision, not fundraising. If they do get excited about fundraising, it's because they are excited about the vision that the fundraiser supports. Or, they're a fundraising company that's "sharing" their profits with you by allowing you to keep 35% of what you sell!
To sit down with someone and ask them to support your vision is a much more ethical, cost-effective, and rewarding approach to funding.
SMART SOLUTION #1:
Judge all fundraising efforts by how effectively they gain or cultivate friends of your vision.
ERROR #2: Raising Money for the Wrong Thing
Which is the more valuable dollar to you, one that is designated for needs-based scholarship or the designated for the operational deficit?
The answer is universally - both dollars have equal financial impact.
However, ask the person in charge of fund development which dollar is easier to raise. Universally, the answer is needs-based scholarship.
Gifts to needs-based scholarships will allow a child to attend your school who otherwise could not afford to do so.
Traditionally, many schools raise money for the general operating budget -- that is usually what the events are for. However, donors generally don't want to give to an organization to "keep the lights on." Organizations that need this kind of help year after year are seen as bordering on incompetent, and the focus shifts away from how students' lives are being transformed.
Donors generally want to see their funds used in one of two ways: 1) to help students get a quality Christian education that otherwise would not be able to afford it or, 2) capital improvements. The worst dollar you can try to raise is for “the pot”. Your deficit is not an incentive to a donor.
SMART SOLUTION #2:
Raise funds for needs-based scholarships
ERROR #3: Ignoring True Affordability
Christian schools really don’t have a good plan or strategy (in most cases) to be able to effectively reach out to families up and down the economic ladder. Some schools have figured this out, but most schools that want to be affordable simple don’t have the focus dialed in to accomplish affordability for all.
So, what is true affordability? It is made up of two components:
The key to effective financial aid is to make practically all of it need-based. Automatic discounts -- financial aid distributed indiscriminately -- are typically unhelpful most of the time, if not unethical and borderline illegal. Schools must use the same financial aid verification process for all applicants.
This approach allows the families that can afford the full cost to pay for it. This is important because your families most likely assume that the tuition they are paying is the full cost, unless you have consistently implied otherwise.
"The problems we face cannot be solved at the same level of thinking that created them.” ~ Albert Einstein
SMART SOLUTION #3:
Price tuition according to cost, drop discounts and increase needs-based financial aid.
ERROR #4: Segmenting Economically
Pricing strategy is a profound statement of ministry philosophy. Conventional wisdom is that the lowest possible tuition is the most compassionate and ministry-minded, because, seemingly, more lower-income families will be served.
However, if we set a tuition without adequate financial aid, we are targeting a certain income level, whether it is low, middle or high, and effectively segmenting our market accordingly.
If tuition is set too low the more affluent parents might question the quality of the program. "If we raise tuition, we will lose families" becomes the constant drum beat of the school board. Set tuition too high and now you are only reaching the affluent, the rest are shut out without proper financial aid help.
Do you really want to segment your market based on income?
There is no reason why your tuition pricing needs to be central to either your vision or values. The essence of your school is a changed life. Everyone needs what you have to offer. Market this value over your tuition rate.
SMART SOLUTION #4:
Cost-based, needs-based financial aid gives us the best chance of reaching out across various socio-economic levels.
These types of changes are very difficult to implement because most of them cut against the grain of many schools' organizational culture and assumptions. However, they are crucial to the survival and health of Christian schools.
If you want what you’ve always had, keep doing what you’ve always done. Otherwise, now is the time to get serious about changing --- then truly follow-through with that resolve.
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