CREATING A NEW DATA-DRIVEN FINANCIAL SUSTAINABILITY REALITY FOR YOUR SCHOOL February 25, 2020 Dr. Harry Bloom
MEASURING SUCCESS ENABLING INDEPENDENT SCHOOLS TO HARNESS THE POWER OF DATA ANALYTICS ✓ Established 2003 ✓ Staff of 15 based in Washington, DC ✓ More than 900 clients in the U.S. and Canada ✓ Specialize in independent school recruitment, financial sustainability, parent and student satisfaction
OUR AGENDA What is driving sustainability? What can we do about it? Have some fun with Moneyball
THE EQUATION THAT DRIVES ENROLLMENT AND SUSTAINABILITY Your School’s Perceived Value on What Matters – Your School’s Tuition Competing Schools’ Perceived Value on What Matters – Their Schools’ Tuition
ENROLLMENT AND APPLICATION GROWTH: ALL SCHOOLS Why Does Using Benchmarking to Impact Our School’s Finances and Relative Perceived Value, Matter? BIIS INDICATORS: PAST 3 YEAR MEDIAN ENROLLMENT AND APPLICATION GROWTH (ALL SCHOOLS) Top Third Middle Third Bottom Third Enrollment Growth +3% Flat -2% Application Growth +10% -2% -13%
ENROLLMENT AND APPLICATION GROWTH: BOARDING SCHOOLS Why Does Using Benchmarking to Impact Our School’s Finances and Relative Perceived Value, Matter? BIIS INDICATORS: PAST 3 YEAR MEDIAN ENROLLMENT AND APPLICATION GROWTH (BOARDING SCHOOLS) Top Third Middle Third Bottom Third Enrollment Growth +2% Flat -4% Application Growth +33% 0% -7%
2016- 2018 BIIS’ FAITH BASED SCHOOL’S GROWTH STATUS Flat 25% Declining 45% Growing 35%
CURRENT PARENTS SURVEY Half of Respondents are Considering or Recently Considered Alternative Schools Are you currently considering or have 51.4% 48.6% you recently (in the Yes No past 2 years) considered other schools beyond ABCD for your child(ren)’s education?
FINANCIAL COMMITMENT KEY DRIVING FACTOR? If Yes, Is The Financial Commitment Required By Your School An Influential Factor In Considering Other Schools? Strongly Agree Agree 27% 14% Neutral 8% Strongly Disagree Disagree 35% 16%
OUR CONSUMER IS SPEAKING… WE HAD BETTER LISTEN!
NET TUITION VITALITY Net Tuition and Fees Growth BIIS INDICATORS: 2015-2017 MEDIAN NET TUITION AND FEES INCREASE RATE Top Third Middle Third Bottom Third Net Tuition and Fees +11% +7% +4%
RESEARCH OUTCOME Enrollment Change (Percent and Number) for Whole School and by Division Relationship between Change in Enrollment and Change in Tuition (for Whole School) Change in Enrollment (Number of Students) Result: No Relationship Change in Tuition (Dollar Amount)
COMPARED TO OTHER PRIVATE/INDEPENDENT SCHOOLS Value for Tuition Dollars At ABCD Is: 31.1% (23 responses) 21.6% (16 responses) 17.6% 16.2% (13 responses) (12 responses) 6.8% 6.8% (5 responses) (5 responses) Much Lower About the Higher Much Do Not Lower Same Higher Know
POLL QUESTION: WHAT IS TRUE ABOUT YOUR KNOWLEDGE OF YOUR SCHOOL’S RELATIVE (TO COMPETITION) PERCEIVED VALUE? As part of tuition setting: 1. We regularly research how our current parents think we stack up on key outcomes versus competition? 2. We regularly research how prospective families think we stack up on key outcomes AUDIENCE Q&A versus competition? 3. We do neither but make guesses to inform tuition setting 4. We do neither and this is not a factor in tuition setting
ACTIVELY SHAPING YOUR SCHOOL’S NEED FOR TUITION Your School’s Perceived Value on What Matters – Your School’s Tuition Competing Schools’ Perceived Value on What Matters – Their Schools’ Tuition
CONTEXT: THERE IS ‘ BENCHMARKING ’ AND THEN THERE IS BENCHMARKING-ENABLED FINANCIAL ENGINEERING ▪ Levels of Benchmarking Utility – Need to dig deeper, beyond Level I ▪ Level I: What is our performance relative to What? relevant peers (national, local as relevant)? Utility Where can we improve? Why? ▪ Level II: Why is our relative performance what it is (How do we do on the key drivers How? of performance)? ▪ Level III: How can we redesign our performance on key drivers to materially enhance our relative and absolute performance?
WHAT CAN YOU DO TO MAXIMIZE VALUE?
ST. JOHN’S HAS HIGHEST HIGH SCHOOL TUITION LEVEL Relative to Catholic School Peers High School Tuition Levels $25,000 $22,835 $19,700 $20,000 $16,100 $15,000 $14,500 $13,800 $15,000 $13,675 $12,950 $12,800 $10,000 $5,000 $-
AVERAGE TUITION AND FEES St. John’s Prep’s Average Tuition and Fees are Significantly Below Peers in the Cohort Independent School Cohort Tuition St. John's Preparatory School $21,427 (Danvers, MA) Belmont Day School (Belmont, MA) $34,418 Phillips Academy (Andover, MA) $41,900 Pingree School (South Hamilton, MA) $44,250 Brooks School (North Andover, MA) $47,113
MOTIVATING FACTORS Board approved 5.7 percent Finance Committee Measuring Success increase in HS tuition. This was the and working groups met with Measuring first time in seven years whereby the presented the potential Success to discuss the increase exceeded 4 percent in an savings of impact of tuition attempt to capture the increase in $6M over the next five increases on prior year costs years. enrollment. (CLAS, Intramurals). JANUARY 2018 OCT 2018 2010 2012 2014 SEPT 2017 APRIL 2018 Access and Affordability Measuring Success Task Force determined work began to review the school needed an cost and revenue additional $1.9M to meet opportunities to meet 100% of all families’ our School’s goals. demonstrated need.
ST. JOHN’S ANNUAL FUNDRAISING PER STUDENT IS BELOW MEDIAN LEVEL 2017/18 Annual Fundraising Per Student $2,500 $2,225 $2,000 $1,702 $1,497 $1,399 $1,500 $1,165 $942 $1,000 $500 $319 $195 $- $-
ST. JOHN’S APPLICATION GROWTH RATE IS LOWEST AMONG PEERS 3 Year Application Growth Rate 1.80 1.63 1.60 1.40 1.15 1.20 0.97 0.94 0.94 0.91 1.00 0.83 0.80 0.67 0.59 0.60 0.40 0.20 0.00
ST. JOHN’S MAJOR GIFTS/STUDENT IS SECOND LOWEST AMONG PEERS 2017/18 Major Gifts/Student $800 $753 $700 $572 $568 $600 $488 $500 $400 $296 $300 $200 $88 $100 $19 $- $0 $-
ST. JOHN’S NON-EDUCATIONAL ADMIN COMPENSATION PER STUDENT IS SECOND HIGHEST AMONG PEERS Non Educational Admin Compensation/Student $10,000 $9,450 $9,000 $8,000 $7,000 $6,000 $5,291 $5,000 $4,013 $4,000 $3,177 $2,872 $2,750 $3,000 $2,313 $1,553 $2,000 $1,000 $- $-
ST. JOHN’S OPERATING SPENDING PER STUDENT IS HIGHEST AMONG PEERS $6K Above Median; $2K Above Nearest Peer 2017/18 Operating Spending/Student $30,000 $24,094 $25,000 $21,884 $18,640 $18,714 $20,000 $14,563 $15,095 $15,526 $16,774 $15,000 $10,000 $5,000 $- $-
ST. JOHN’S MEASURABLE GOALS ▪ Fund depreciation ▪ Meet 100% of demonstrated need for all accepted students =$6 million ▪ Maintain reasonable tuition increases for families
AREAS OF OPPORTUNITIES Surveys shared with peers to gather data in the following areas of focus helped St. John’s Prep review where it stood against its peer benchmarks and create the following task forces to review: ▪ Advancement ▪ Purchased Goods & Services/Auxiliary Revenue ▪ Staffing & Compensation ▪ Admissions
ADVANCEMENT Based on Benchmarks, Task Force Challenged Current Giving Culture and a Shift from Programming to Donor Based Approach. Current Initiatives Increased participation/levels with current parents, trustees, grandparents and alumni Staffing changes and elimination of one role Reduction of campaign expenses
FUTURE POTENTIAL ▪ Decrease event expenditures ▪ Review staffing levels and move to a more front-line model ▪ Target business and foundations
PURCHASED GOODS & SERVICES Based on Benchmarks, Task Force Challenged Current Staffing Structures, Outsource Potentials, and Overall Reduction of Expenses Current Initiatives Staffing changes and elimination of budgeted role Increased rental rates on facilities to increase profitability Better planning to minimize overtime Energy conservation recommendations Refinance existing short-term debt
PURCHASED GOODS AND SERVICES FUTURE POTENTIAL ▪ ▪ Assess departments for Standardize set-ups from certain facilities overhead and event to event to eliminate supply requests overtime
STAFFING & COMPENSATION Based on Benchmarks, Task Force Challenged FTEs in Both Staff and Faculty Departments. Current Initiatives Replace upcoming faculty retirees at a lower salary or consider no replacement due to class sizes. Replace regular staff transitions at lower salary or consider no replacement. Hurdles faced unique to St. John’s Prep: Lay faculty agreements, overall culture, class sizes in comparison to peer independent schools.
FUTURE POTENTIAL Alter Health Care Plan
ADMISSIONS Based on Trends and Current Marketplace, Task Force is Working to Personalize Admissions Experience, Enhance Communications, and Focus on Specific Communities for Enrollment. Current Initiatives Perform Measuring Success Lookalike demographic Analysis Grow enrollment and solidify penetration of Category 1 (strong presence) families Grow enrollment and solidify penetration of Category 2 (moderate presence) families Reduce printing and postage with replacement of electronic viewbooks; Move away from traditional Open Houses
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