Your School's Financial Strength and Enrollment: An Unconventional Answer

Guest post by John Warren, CFS Financial http://www.cfsfinancial.net/ 

While assisting Christian schools with debt restructuring, fundraising, financial modeling, and related matters, I rarely have the opportunity to pull back the lens to see the big picture. Given the breadth and degree of financial challenges Christian schools experience, however, I have taken some time recently to focus on the larger picture. This broader focus reveals an industry under siege by the consequences of decisions made years ago by well-meaning boards of directors, competition from homeschooling and charter schools, and cultural changes both inside of and external to the church. Yes, thankfully there are thriving schools and churches that are financially successful, but most Christian schools and many churches find themselves fighting for financial sustainability in a series of slowly cascading economic circumstances.

I have the benefit of seeing the industry through the lens of thirty years of commercial banking experience. This experience tells me that while more and more entities are vying for their “piece of the pie,” the pie itself is shrinking. The cultural stress on our society reduces the perceived need for Christian education of all types and the cast of providers now includes homeschooling cooperatives and charter schools in many states. Traditional educators find it difficult to compete with the well-established homeschooling group and competing with charter schools is even more challenging given their financial underpinning by the government.

My banking experience taught me that being an early adapter is fraught with risk. Consequently, I tend to observe from the sidelines until the evidence of lasting change is overwhelming. The evidence I have observed in recent years in Christian education screams loudly the fact that in many “markets,” the traditional Christian education model is no longer financially sustainable.

Now before you stop reading and call a colleague screaming that John Warren doesn’t have a clue about this industry, allow me to qualify this observation. Yes, traditional Christian education remains viable in most markets in most of the country. That being said, however, the financial tension in the industry must be met with inventive solutions if many of our Christian schools are to survive.

One such solution involves tweaking the model to one including “university model” scheduling to attract homeschoolers and other students with unusual time constraints for various reasons. Accrediting bodies like AdvancED recently embraced this model in schools where education is delivered with all of the rigor and accountability of the traditional model. In fact, my friends Jim and Linda Werner founded Circle Christian School thirty years ago. Their school employs the university model and is accredited by AdvancED.  CCS offers Honors and AP classes along with amazing arts and athletics opportunities on an a la carte basis for families seeking alternatives to pure homeschooling. CCS utilizes an electronic learning platform, a well-skilled faculty, and administrators who have learned how to manage the balance between state education standards and the needs of families ranging from pure homeschoolers to those who see Circle as a traditional Christian School.

For several years I have thought of the university model employed by Circle as a concept that works well due to the nuanced efforts of a few very talented administrators. In recent years, however, I am beginning to see this model, or at least elements of this model, as an effective strategic reaction to the competitive pressure brought by unconventional delivery models.

Circle Christian School employs curriculum writers and accomplished, terminal degree-holding experts on its faculty. They win state championships in sports, they sell out local theatres, and their students have exemplary SAT, ACT, and AP test scores. Students go on to graduate from top-tier universities and graduate schools.  They are able to deliver an excellent product with a focus on quality while utilizing this inventive delivery model.

While the aforementioned experience and all of my consulting work with Christian schools around the country don’t qualify me to offer comprehensive, strategic direction on all things related to education, I see clearly from my longstanding position on the sidelines that this flexible-delivery model is a viable solution for many struggling schools around the country. It is likely to also provide an additional revenue channel, if administered well, for thriving, stronger schools.

My book, The Financial Rescue Plan for Nonprofits (www.cfsfinancial.net) , includes a financial modeling tool called REVPASS (Revenue Per Available Student Seat), a managerial accounting tool that reveals the cost of empty seats throughout all grade levels. If administered well, this flexible university learning model will fill vacant seats and allow your school to compete with non-traditional and publicly funded alternatives on a more level playing field. In short, schools are able to fill empty seats without raising fixed costs when the REVPASS tool is utilized effectively.

The non-traditional, flexible university model isn’t necessary in some environments, but it is a rescue plan for many. This new micro-movement might work tangentially for your school to fill empty seats without correspondingly raising expenses. With well-planned delivery, this new model is not a threat to traditional Christian education; rather, it can be an enhancement to the traditional model that allows your school to compete with more innovative delivery channels.

If nothing else, I think the Christian education industry recognizes that this sort of innovative thinking is important as schools adjust to relatively new competitive pressures and the resultant financial challenges presented by this environment.

To learn more, contact John Warren at jwarren@cfsfinancial.net or 407-257-6220.