When I began working with school administrators in the early 2000’s, many were lamenting the fact that parents were disenrolling their students because tuition was just too high for them. I asked when they started noticing this trend, and their answer was that it was happening for “quite some time.” Some further research showed that “quite some time” included the 1990’s, which is arguably the most economically successful decade in this nation’s history. Perhaps someone didn’t tell parents of students in faith-based schools during that time period that they were living in an economically successful time. After all, the rise and fall of stock prices doesn’t usually affect the working person…until the company they’re working for experiences layoffs or cutbacks. Even so, the reason for enrollment decline must be more than, “We can’t afford the tuition.” Interestingly, such rationale is usually “the last straw” if there are other issues which parents find troubling about the school, and is an easy reason to give, and one that is easily understandable to empathetic administrators.
And more than 30 years later, parents still say they can’t afford the tuition…but they can afford vacations and trucks. It’s not that they can’t afford it…they just don’t want to afford it.
Also during the 1990’s, it also became clear that tuition revenue wasn’t enough to continue to support the educational program of the school, as teachers were significantly underpaid, building conditions needed to be improved to accommodate students with physical needs, and technology was beginning to make its way into the classroom. Schools began to engage alumni, businesses and community members to deepen the relationship between the school and these constituencies, fostering gifts of time, talent and treasure to provide for a firm financial foundation for the school. The model of institutional advancement which colleges and universities utilized began to displace fundraising practices, allowing fundraising to evolve into fund raising, especially because fundraising was a short-term, stop-gap strategy to cover shortfalls in revenue, and revenues that resulted from development activities such as appeals, grants, major gifts, and planned giving were more suited to the long-term viability of the school.
Critics, however, continue to point to a school’s efforts to increase enrollment, as well as increase development revenue, and say, “See? It’s all about the money. More enrollment means more tuition revenue, and more outside sources like alumni, businesses and community members means more development revenue.” But as one astute Church leader once told me, “A school can have all the money in the world, but if no one was interested in attending the school, the school would cease to exist.”
Realizing the importance of enrollment and development today, it’s simply amazing that many don’t have a person, let alone a staff of key individuals, who “own” the task of enrollment, marketing and development (collectively known as advancement). Show me a school that’s struggling to stabilize enrollment today, and I’ll lay odds that these key positions are not a part of the school’s staffing. And as for these schools governing boards, the members may also be ignorant of the importance of these positions, not to mention the role of the board, and continue to make suggestions regarding what the principals needs to do, or simply look at the bottom line…and disregard all the other lines that make up the other important systems within the school.
Indeed, revenue is important, and people are important too. But just as the “Is your school a business vs. ministry” argument has a third element, which is the school itself, it’s “all about” all three elements combined, and not just one of those elements. The “revenue vs. people” argument also has a third element, which is the “experience.”
The “three elements” approach makes sense, since if a school’s tuition is considered to be “too low,” most people will think that there’s something lacking in the quality of the school, even if school administration works indefatigably to keep tuition at nominal levels. If tuition is considered to be “too high,” without the possibility of receiving financial aid, parents may decide they cannot afford the cost of remaining part of or joining the parent community be enrolling their child. Notice that neither scenario discloses the level a school believes is its “right” tuition. The perception is in the mind of the customer, as the customer determines the value, while the school determines the price. While some schools shudder at the possibility of moving toward a tuition that’s based on (notice I did not say equal to) the cost of operating the school, the real measure of the appropriateness of the tuition charged lies in the mindset of the customer. It’s the customer’s “experience” of the school which determines the value of the education that their children will receive for the tuition they can pay.
This is important for 2 reasons. First, it’s not necessarily the quality of the education that makes the parent decide to enroll or disenroll their child in the school. For faith-based schools, a solid faith identity, excellent academics and a safe and caring community are expectations, and not remarkable attributes. Further, it’s not just the student’s experience that’s important, but the parent’s experience is just as, if not more, important. If a parent feels that their suggestions or comments are constantly being ignored by school administration, their experience will not be a positive one, even though the child may be doing very well in school academically and socially. It may be these parents that are the most likely not to re-enroll their child for the following school year. Further, while its true that students today are more instrumental in making the decision about which high school they’ll attend (enrollment), it’s the parents’ experience which will determine if their child continues to be enrolled in the school (retention).
Second, even if parents have a difficult time paying for the necessities, they will still pay for “experiences.” The vacation to Central Florida, the cruise to the Bahamas, or driving the new luxury car or oversized pickup truck are not just vacations or vehicles. They are “experiences.” An article from Forbes magazine speaks to “Purchasing experiences” (http://www.forbes.com/sites/hbsworkingknowledge/2013/08/05/want-to-buy-happiness-purchase-an-experience/) since an “experience” could make someone happier than just buying more “stuff.” Check out the article and pay particular attention to item number 5 – “Invest in Others.” Research shows that giving money to others makes people happier than spending it on themselves.
And research shows that 72% of Millennials (your target audience) will pay for “experiences” rather than “stuff” (https://www.cnbc.com/2016/05/05/millennials-are-prioritizing-experiences-over-stuff.html).
What does this mean for your school’s development efforts? IF they include an auction, a golf outing, or gala dinner, “stuff” isn’t what’s bringing in the significant development dollars anymore. Your silent auction or pick-a-ticket bags will generate more dollars if you offer “experiences,” such as theater tickets, an excursion, a stay at a bed-and-breakfast, or a weekend away with gift certificates for activities and overnight accommodations. This trend toward “experiences” has been documented in a recent issue of the NonProfit Times (http://www.thenonprofittimes.com/news-articles/apps-experiences-pushing-auction-prices-higher/).
Revenue. People. Experiences. They are inseparable and essential elements which form the basis of your school’s firm financial foundation.