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Financial and Operational Trends in Catholic Schools July 8, 2014. Financial & Operational Trends. Operational Vitality Measures : Compares school performance to national benchmarks and school results vs. other Archdiocesan schools - PowerPoint PPT Presentation
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Financial and Operational Trends in Catholic Schools
July 8, 2014
Financial & Operational TrendsOperational Vitality Measures :
• Compares school performance to national benchmarks and school results vs. other Archdiocesan schools
• Combination of school financial, demographic, enrollment, and parish data
• Collectively helps to identify key issues (triage)• Based on objective measures, but presented in ways that are simple to
understand• Schools & Parishes (Finance councils) are learning to utilize the
information to guide planning
Data and analysis is organized in 8 key areasEnrollment TuitionRevenue Instructional CostsAdmin Costs Plant CostsAffordability Liquidity
Areas Covered in the Report
Financial & Operational Trends2012 2013 2014
Min. Avg. Max. Min. Avg. Max. Min. Avg. Max.
Capacity
75 439
1,056 75 424 1056 75 407 1080
Enrollment
22 330
1,009 19 324 1014 26 317 1023
Total AoC Elementary Enrollment
29,99
2
29,46
6
29,18
2
% School Capacity 29.3%
75.2% 95.5% 20.0%
76.4%
103.3% 34.7%
77.9%
100.0%
Financial & Operational Trends2012 2013 2014
Min. Avg. Max. Min. Avg. Max. Min. Avg. Max.Students - % Catholics 0.6%
83.1%100.0% 0.0%
82.5%100.0% 0.0%
80.8%100.0%
Students - % State Vouchers 0.0%
14.5% 76.7% 0.0%
15.5% 81.4% 0.0%
16.6% 91.6%
Mkt. Share within a 3 Mile Radius of the school 0.83%
5.22%22.42% 0.99%
5.08%22.35% 1.40%
5.14%22.31%
Enrollment Retention 64.2%
100.1%116.4% 52.6%
100.1%113.9% 65.9%
97.8%112.9%
Financial & Operational Trends2012 2013 2014
Min. Avg. Max. Min. Avg. Max. Min. Avg. Max.
Tuition
1,450
3,171
5,540
1,600
3,250
6,025
1,600
3,283
5,350
Tuition % of Median Income 3.28%
6.41%24.15% 3.55%
6.57% 22.2% 3.73%
6.71%24.39%
Tuition Collected vs Calculated 0.06 1.06 2.29 0.04 0.90 2.06 0.05 0.94 2.20
Tuition % of Revenue 3.9%
68.0% 93.5% 2.8%
68.2% 91.8% 4.1%
71.8% 90.8%
Opportunity loss
9,400
284,1
71 1,654,9
50
18,00
0
312,1
96 1,141,9
20
2,997
312,6
80 1,167,5
40
Financial & Operational Trends2012 2013 2014
Min. Avg. Max. Min. Avg. Max. Min. Avg. Max.
Instructional Cost per Student
1,612
2,288
4,482
1,639
2,320
5,815
1,744
2,43
5 6,843
Admin Cost per Student
184
477
1,301 173 484 2073 190 530 2341
Employee Benefits cost per student
916 948 970
Plant Operations per Student
-
495
1,197 0 479 1259 0 505 1085
Financial & Operational Trends2012 2013 2014
Min. Avg. Max.Min
. Avg. Max. Min. Avg. Max.
Net School Operating Shortfall $$
-
(242,73
2)
(828,928)
-
(203,36
3)
(731,393)
-
(212,07
4)
(781,509)
$$ Per Student -
(728)
(3,985)
-
(616)
(3,410)
-
(655)
(5,109)
@ % of Parish Revenue 0% 20% 54% 0% 17.2% 58% 0% 18.5% 66%
No. Months Cash on Hand -
4.0
22.7 4.26
24.3
4.30
26.1
Parish Investments/Annual Support
-
4.5
126.8
5.8
1,914.8
5.5
228.2
Parish Indebtedness -
541,67
5
4,395,000 -
386,46
4
5,504,055 -
413,87
1
5,235,500
10
That’s impressive Wayne. But how did you do it?
11
How has the educational environment of Catholic education changed over the
last 50 years?
• Competition?• Relationships with internal and external
stakeholders? • Resources? • Values that inspire, unify and identify? • Processes?
12
How have we adapted to the environmental changes of the last
50 years?
13
Name this Chart Line?
1880 1890 1900 1910 1920 1930 1940 1950 1960 1965 1970 1980 1990 2000 20100
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
14
Name this other Chart Line
19771979
19811983
19851987
19891991
19931995
19971999
20010
2000
4000
6000
8000
10000
12000
18801890
19001910
19201930
19401950
19601965
19701980
19902000
20100
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Catholic School Enrollment ? ? ?
15
Adapt or Die OR Die and Rise
19771979
19811983
19851987
19891991
19931995
19971999
20010
2,000
4,000
6,000
8,000
10,000
12,000
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Apple Computers – Net Revenue
16
Active Inertia
Management’s tendency to respond to changes by accelerating activities that succeeded in the past.
17
Managing by CommitmentsDespite differences in their personal attributes, successful managers all excel in the making, honoring and remaking of commitments.
- Donald M. Sull, Managing by Commitments, Harvard Business Review
Five Categories of Organizational Defining Commitments • Strategic Frames – How you see the world• Resources – Hard and soft assets at your disposal• Values – Shared norms that unite and inspire• Processes – How things get accomplished• Relationships-Customers, regulators, suppliers, partners
18
Symptoms of Active Inertia
Strategic Frames - How you see the world– People are fighting the last war– The “blame game” over multiple years (or
decades)– Unimplemented strategies in binders provided by
expensive consultants – Intolerance for diversity of thought
19
Symptoms of Active Inertia
Resources - Hard and soft assets at your disposal– Leaders hesitate to reconfigure resources for fear
of jeopardizing their “profits” – Resources considered for annual value rather than
lifetime value. – Reactive “repairs” rather than fixes– Lack of succession planning and cultivating the
next generation of leaders and mangers.
20
Symptoms of Active Inertia
Processes - How things get accomplished– People stop thinking of processes as a means to an
end and stop thinking of alternatives to their comfortable and reassuring routines.
– “Best Practices” are known but not implemented– One person in the organization is “the process”– Don’t know (or don’t pay attention to) key data and
core metrics
21
Symptoms of Active Inertia
Relationships-Customers, regulators, suppliers, partners – Gradual loss of key partners– Ossification of relationships with internal partners.– Established relationships with external partners
prevent responding to changes in technology, regulation or customer preferences.
– Antipathy toward or blaming the customers.– Your “stars” have found other partners.
22
Symptoms of Active Inertia
Values - Shared norms that unite and inspire– Unifying power of core values degenerates into
mindless conformity. – Unifying values are supplanted by rigid rules and
regulations codified in thick employee handbooks.– Confusion between “sacred cows” and “false
idols”
23
Active Inertia Trap*
Values
Frames
Relationships
Resources
Processes Dogmas
Blinders
Shackles
Millstones
Routines
Environment
* Source: Donald M. Sull. Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them
Success Formula Active Inertia
24
Three Areas We Are Stuck
• Improving School Leadership• Governance Models• Accepting our role in the New Evangelization
25
Test Case: Improving School Leadership
• Strategic Frames• What is long term cost of not
developing leaders? • Is this really a priority?
• Resources• How do we identify future leaders?• What resources can be made to
develop them?
• Values• How do we demonstrate that we value
our people?
• Processes• How can we “mint” the best leaders in
our industry?
• Relationships• Do we in-source or out-source
leadership development?
• Strategic Frames
• Resources
• Values
• Processes
• Relationships
Traditional Success Formula Modified Success Formula
26
Managing Commitments
The actions that you take today can pave the way to success tomorrow. Or they an lock you into a doomed business model. The best leaders and managers now when to make commitments – and when to break them.
27
Seven Deadly Sins of Transforming Commitments
1. Repeat what worked last time.2. Fail to run the numbers.3. Don’t sweat the details.4. Delegate the hard work. 5. Half-tackles.6. Ignore core values.7. Keep past sell-by date.
3 Areas where we’re stuck:
• Improving School Leadership• Governance Models• Accepting our role in the New
Evangelization