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The Future of The Future of School School
FundingFunding
CBT/NBACBT/NBA
A case studyA case study
DemographicsDemographics Average size schoolAverage size school One of each grade pre-k 3 through 8One of each grade pre-k 3 through 8thth
grade.grade. Established in 1897Established in 1897 Current building built in 1922Current building built in 1922 Parish with 600 familiesParish with 600 families Urban eclectic neighborhood.Urban eclectic neighborhood. Turnover with stability.Turnover with stability. 20% of students on free and reduced 20% of students on free and reduced
lunch.lunch.
Three Current ModelsThree Current Models Subsidy Driven ModelSubsidy Driven Model
• Revenues from tuition and fees do not cover Revenues from tuition and fees do not cover costs. Typically tuition and fees account for costs. Typically tuition and fees account for around 50% of cost. Difference made up by around 50% of cost. Difference made up by large parish subsidy. large parish subsidy.
Stewardship ModelStewardship Model• Tithing is the norm not the exception. Parish is Tithing is the norm not the exception. Parish is
cash rich and subsidizes everything. No tuition cash rich and subsidizes everything. No tuition is charged. Example: Witchita, KS is charged. Example: Witchita, KS
Tuition Driven: CBT / NBATuition Driven: CBT / NBA• Tuition and fees cover a minimum of 70% of Tuition and fees cover a minimum of 70% of
costs and parish subsidy is directed towards costs and parish subsidy is directed towards those families in need. those families in need.
Understanding Cost per StudentUnderstanding Cost per Student
Many families hold the Many families hold the misconception that assessed tuition misconception that assessed tuition covers costs.covers costs.
Reality is that most schools charge Reality is that most schools charge tuition that is significantly below tuition that is significantly below cost.cost.
Cost per student = total operating Cost per student = total operating expenses / # of studentsexpenses / # of students
St. Mark Catholic School St. Mark Catholic School Cost per StudentCost per Student
2004-2005 2004-2005
Total Expenditures: $797,517Total Expenditures: $797,517
Cost per Student:Cost per Student: $3,654$3,654
2005-20062005-2006
Total Expenditures:Total Expenditures: $782,035 $782,035
Cost per Student: $3,401Cost per Student: $3,401
Why the decrease in cost per Why the decrease in cost per student from 2004-05 to 2005-06?student from 2004-05 to 2005-06?
We now have one section of each We now have one section of each grade. Right sizing the school grade. Right sizing the school enables us to hit a financial sweet enables us to hit a financial sweet spot. Overstaffing must be avoided.spot. Overstaffing must be avoided.
Our enrollment grew. We were one Our enrollment grew. We were one of only two schools in the diocese to of only two schools in the diocese to see positive enrollment growth.see positive enrollment growth.
What type of funding model do we What type of funding model do we use as a school?use as a school?
2004-2005 2004-2005 • Tuition and Fees accounted for Tuition and Fees accounted for
$414,623 or 52% of expenses$414,623 or 52% of expenses• Parish subsidy was $151,606 or 19% of Parish subsidy was $151,606 or 19% of
expenses.expenses.• Development: auction and fundraising Development: auction and fundraising
accounted for $25,042 or 3% of accounted for $25,042 or 3% of expenses.expenses.
• $193,370 or 25% came from the Sloan $193,370 or 25% came from the Sloan Endowment and other (P.T.O., Endowment and other (P.T.O., donations, interest,preschool etc.)donations, interest,preschool etc.)
What type of funding model do we What type of funding model do we use as a school?use as a school?
2005-2006 2005-2006 • Tuition and Fees accounted for Tuition and Fees accounted for
$434,035 or 56% of expenses$434,035 or 56% of expenses• Parish subsidy was $135,000 or 17% of Parish subsidy was $135,000 or 17% of
expenses.expenses.• Development: auction and fundraising Development: auction and fundraising
accounted for $40,000 or 5% of accounted for $40,000 or 5% of expenses.expenses.
• $173,000 or 22% came from the Sloan $173,000 or 22% came from the Sloan Endowment and other (P.T.O., Endowment and other (P.T.O., donations, interest, preschool etc.)donations, interest, preschool etc.)
What type of funding model do we What type of funding model do we use as a school?use as a school?
We use a subsidy model that is offset We use a subsidy model that is offset partially by the availability of the partially by the availability of the Sloan money: $120,000 per year.Sloan money: $120,000 per year.
Original intent of the Sloan money was Original intent of the Sloan money was to pay increased teacher salaries. to pay increased teacher salaries. The reality is dramatically different. The reality is dramatically different.
Origin of the Subsidy ModelOrigin of the Subsidy Model
Began with immigrant Church.Began with immigrant Church. Tuition is low and parish presumes Tuition is low and parish presumes
poverty or inability to pay on the part poverty or inability to pay on the part of all school families.of all school families.
Everyone regardless of need or Everyone regardless of need or wealth receives this subsidy.wealth receives this subsidy.
Based on inexpensive staffing of the Based on inexpensive staffing of the school and real poverty on the part school and real poverty on the part of immigrants. of immigrants.
Keys to success of Subsidy model:Keys to success of Subsidy model:
Large parish population spreads out Large parish population spreads out burden of operating school.burden of operating school.
Staffing by religious keeps salary Staffing by religious keeps salary artificially low.artificially low.
Low mobility rate keeps parish Low mobility rate keeps parish support loyal and constant. support loyal and constant.
Investment in staying power. Past Investment in staying power. Past subsidized families grow into subsidized families grow into becoming the subsidy giver. becoming the subsidy giver.
Problems for the Subsidy ModelProblems for the Subsidy Model The driving premise no longer meets The driving premise no longer meets
reality.reality.• The nuns left. Lay staff deserve and require a The nuns left. Lay staff deserve and require a
just wage: Our diocese defines just wage as just wage: Our diocese defines just wage as 80% of local public school. (we currently pay 80% of local public school. (we currently pay 66.12%)66.12%)
• Education changed: 60 students to a room Education changed: 60 students to a room with no specials doesn’t cut it. Quality with no specials doesn’t cut it. Quality education today means specialization, trained education today means specialization, trained staff, lower ratios, and support staff staff, lower ratios, and support staff (counselors/resource).(counselors/resource).
• The building– Old facilities = more money lost The building– Old facilities = more money lost on repairs, maintenance, and utilities.on repairs, maintenance, and utilities.
• Technology: a high quality education involves Technology: a high quality education involves the integration of technology. That means $. the integration of technology. That means $.
Problems for the Subsidy ModelProblems for the Subsidy Model Parish BurdenedParish Burdened
• Catholic Schools are the American Church’s Catholic Schools are the American Church’s best tool for evangelization. If financially best tool for evangelization. If financially mismanaged they create a substantial mismanaged they create a substantial crippling burden. crippling burden.
• This ever growing burden leads to the need to This ever growing burden leads to the need to control costs.control costs.
• 80% of costs are usually applied to salary.80% of costs are usually applied to salary.• Low salaries = low morale, high turnover and Low salaries = low morale, high turnover and
poorer programs.poorer programs.• The need to take the leftovers – dance of the The need to take the leftovers – dance of the
lemons.lemons.• Poor programs lead to lack of interest and Poor programs lead to lack of interest and
downward enrollment which leads to closure / downward enrollment which leads to closure / consolidation. consolidation.
How much parish $ does your How much parish $ does your family receive?family receive?
Parish Families
# of Student(s) Acutal Cost - Assessed Tuition = Subsidy
1 $3,401 $2,400 $1,001 2 $6,802 $3,000 $3,802 3 $10,203 $3,300 $6,903
4 $13,604 $3,600 $10,004
Non-Parish Families 1 $3,401 $3,300 $101
2 $6,802 $5,100 $1,702 3 $10,203 $6,300 $3,903
4 $13,604 $7,500 $6,104
Current RealityCurrent Reality Parish has lost membership making subsidy more Parish has lost membership making subsidy more
difficult to maintain.difficult to maintain. Increased mobility of American life decreases Increased mobility of American life decreases
staying power. Those receiving the subsidy staying power. Those receiving the subsidy aren’t hanging around to give it. People move aren’t hanging around to give it. People move and are relocated.and are relocated.
Higher % of non-parish families (1/4) is good and Higher % of non-parish families (1/4) is good and bad. Higher tuition but still being subsidized by bad. Higher tuition but still being subsidized by our parish. our parish.
Change in behavior / funding attitude.Change in behavior / funding attitude.• Members in name only. Do not attend Mass or support Members in name only. Do not attend Mass or support
parish.parish.• Gone when students are gone. Gone when students are gone.
Cost based Tuition / Needs Based Cost based Tuition / Needs Based AssistanceAssistance
Growing model of school funding.Growing model of school funding. Leads to greater financial security.Leads to greater financial security. Meets needs of current reality.Meets needs of current reality. No longer presumes poverty – most No longer presumes poverty – most
Catholics are middle to upper middle class.Catholics are middle to upper middle class. Subsidy applied to those who need it.Subsidy applied to those who need it. Greater accountability and stewardship Greater accountability and stewardship
with the Church’s money.with the Church’s money.
Basics of CBT / NBABasics of CBT / NBA Tuition is set at or above 70% real cost.Tuition is set at or above 70% real cost.
• Cost as real dollar value. = expenses / studentsCost as real dollar value. = expenses / students• Cost as real dollar value after 3Cost as real dollar value after 3rdrd source funding is source funding is
accounted for.= (cost – (auction + sloan +other))/ accounted for.= (cost – (auction + sloan +other))/ enrollmentenrollment
Sibling Breaks Do not existSibling Breaks Do not exist• Works under premise that sibling break presumes Works under premise that sibling break presumes
poverty where it might not be. poverty where it might not be. • Sticker tuition is irrelevant to a family’s ability to pay. Sticker tuition is irrelevant to a family’s ability to pay.
Needs Based Assistance is availableNeeds Based Assistance is available• Explains and promotes assistance program.Explains and promotes assistance program.• Objective financial services used PSAS / Facts / SMART to Objective financial services used PSAS / Facts / SMART to
determine availability to pay.determine availability to pay.• Includes consideration for multiple children, college Includes consideration for multiple children, college
tuition etc. Takes subjective feelings out of the tuition etc. Takes subjective feelings out of the mechanism. Objective data leads to what a family can mechanism. Objective data leads to what a family can be expected to pay. be expected to pay.
Basics of CBT / NBABasics of CBT / NBA Parish dollars are directed towards Parish dollars are directed towards
families who need it rather than families who need it rather than everyone.everyone.
Families who can pay more do pay Families who can pay more do pay more.more.
Secures the financial future of the Secures the financial future of the school.school.
Families in the middle are forced to Families in the middle are forced to prioritize some items.prioritize some items.
Basics of CBT / NBABasics of CBT / NBA Success depends on implementation.Success depends on implementation.
• Done over a period of 4-6 years makes it Done over a period of 4-6 years makes it manageable.manageable.
• Educate, Educate, Educate,. Schools who Educate, Educate, Educate,. Schools who successfully implement the model have successfully implement the model have educated their constituents about CBT / NBA.educated their constituents about CBT / NBA.
• Focus on Needs Based Assistance.Focus on Needs Based Assistance.• Expect enrollment to drop 10%. Some people Expect enrollment to drop 10%. Some people
will refuse to prioritize, not value Catholic will refuse to prioritize, not value Catholic education, or be too proud to apply for funding education, or be too proud to apply for funding or stuck in the “way things used to be”.or stuck in the “way things used to be”.
• More education = a smaller enrollment dip. More education = a smaller enrollment dip. • Schools who experience the dip gain it back in Schools who experience the dip gain it back in
time. time.
Basics of CBT / NBABasics of CBT / NBA Non-Parish Rate must reflect cost Non-Parish Rate must reflect cost
above parish rate. above parish rate. Recommended to utilize tuition Recommended to utilize tuition
management – FACTSmanagement – FACTS• Outsourced for same reason companies Outsourced for same reason companies
outsource payroll.outsource payroll.• Collections increase – force priority.Collections increase – force priority.• School no longer the collection agency.School no longer the collection agency.
Focus on mission.Focus on mission. Cost is nominal.Cost is nominal. Ease of implementation and pay. Ease of implementation and pay.
Where we are at….Where we are at…. Subsidy model is guiding us in wrong Subsidy model is guiding us in wrong
direction in terms of funding.direction in terms of funding. Our salary is the worst in the area.Our salary is the worst in the area. Shrinking parish = bigger burden as Shrinking parish = bigger burden as
% of parish income.% of parish income. Increased mobility, lack of staying Increased mobility, lack of staying
power, and changing attitudes – power, and changing attitudes – Mass practices makes continuing a Mass practices makes continuing a subsidy model more difficult. subsidy model more difficult.
Where we are at….Where we are at…. Good NewsGood News Not in debtNot in debt We don’t borrow to meet payroll.We don’t borrow to meet payroll. We have an exceptional and loyal staff.We have an exceptional and loyal staff. We have a community committed to Catholic We have a community committed to Catholic
education.education. The Sloan Fund is a great resource and gift, The Sloan Fund is a great resource and gift,
making cost based tuition needs based making cost based tuition needs based assistance easier to implement.assistance easier to implement.
Auction , Civic-Center, and other fundraisers Auction , Civic-Center, and other fundraisers can spur 3can spur 3rdrd source funding. source funding.
Many unexplored 3Many unexplored 3rdrd source funding avenues source funding avenues exist.exist.
Enrollment growing. Enrollment growing.
Where do we want to go…?Where do we want to go…? Adopt a plan to become tuition driven over Adopt a plan to become tuition driven over
the next 4 to 6 years or not?the next 4 to 6 years or not? Make decisions based on personal ease or Make decisions based on personal ease or
for the long term stability of the school for the long term stability of the school and Catholic tradition that we are and Catholic tradition that we are accountable to?accountable to?
Commit to social justice? Pay adequate Commit to social justice? Pay adequate or continue to make excuses, “we can’t or continue to make excuses, “we can’t afford this.” Maybe we can’t afford not to afford this.” Maybe we can’t afford not to pay 80%.pay 80%.
Do we want to lay a strong foundation for Do we want to lay a strong foundation for a solid future? a solid future?
My recommendation…My recommendation… Adopt a four to six year plan now…Adopt a four to six year plan now… Secure a solid funding model for our new Secure a solid funding model for our new
future…future… Begin a plan to pay 80% within four to six Begin a plan to pay 80% within four to six
years coupled with becoming tuition years coupled with becoming tuition driven.driven.
Be ahead of the curve.Be ahead of the curve. Educate, educate, educate. Educate, educate, educate. Develop more third source funding.Develop more third source funding. Push an understanding of Needs Based Push an understanding of Needs Based
Assistance. Assistance.
Your thoughts and comments.Your thoughts and comments.
Administrators and pastors come and Administrators and pastors come and go. It is your family that will be here go. It is your family that will be here the longest. What future do you the longest. What future do you want?want?
What Happened?What Happened?
In 2006 the school commission In 2006 the school commission adopted a plan with the backing of adopted a plan with the backing of the finance committee to shift to a the finance committee to shift to a CBT model.CBT model.
The tuition rate for one child and all The tuition rate for one child and all brackets was raised from $2,400 to brackets was raised from $2,400 to $3,000 a 25% increase.$3,000 a 25% increase.
Continued…Continued…
The following year base tuition went The following year base tuition went to $3,200 for one and$4,000 for two.to $3,200 for one and$4,000 for two.
The sibling spread begins to widen. The sibling spread begins to widen.
What effect did it have?What effect did it have? Enrollment grew over the period from Enrollment grew over the period from
200 to 240 students or a 20% 200 to 240 students or a 20% increase.increase.
Salaries were raised 15% in one Salaries were raised 15% in one year.year.
Technology was rehabbed.Technology was rehabbed. Spanish, librarian, and a counseling Spanish, librarian, and a counseling
position were added.position were added. Tuition and fees account for 70% of Tuition and fees account for 70% of
expensesexpenses
Keys to success:Keys to success: 1. Communication1. Communication 2. Reaching middle class families2. Reaching middle class families 3. Professional Needs Assessment 3. Professional Needs Assessment 4. Share annual information with 4. Share annual information with
families. Where does it go?families. Where does it go? 5. Stop acting like beggars and start 5. Stop acting like beggars and start
focusing on learning.focusing on learning. 6. Break down increase to smallest 6. Break down increase to smallest
monthly amount. monthly amount.
Can it be done in your school?Can it be done in your school? Every school is different.Every school is different. Education is the key.Education is the key. Overcome fear of what if?Overcome fear of what if? Use the increased revenue to better Use the increased revenue to better
the school in a tangible way.the school in a tangible way. Promote the difference. Promote the difference.
