2014 Spring Business Conference

Report
Spring Business Conference –Wednesday, April 30, 2014
Will This Upward Spiral Ever End?
Tackling the Affordability Issue
With increasing pressures on operating budgets on the one hand,
continued economic uncertainty, unemployment, and family financial
pressures on the other, in the face of an alternative, affordable
public school education option, can independent schools continue to
increase tuition at the current rates?
Moderator:
Elizabeth Jick
Zions First National Bank
Panelists:
Carolyn Flammey
SSDS of Greater Boston, Inc.
Jim Skrumbis
Sierra Canyon School
Timothy Parson
Beaver Country Day School
Bernice Bradin
Lesley University
1
Framing the Dilemma
2
Educational institutions today face a BIG problem…
Tuition levels are steadily rising - - with no end in sight!
3
The Problem for Independent Schools:
Total Operating Costs continue to rise
•
Salaries/Benefits
•
Health Care/Insurance
•
New Programs
•
Capital Expenditures
•
Deferred Maintenance
4
The Theoretical Solutions:
These costs can be covered through a combination of:
•
Raising Tuition Levels
•
Fundraising/Development Efforts
•
Increasing Endowment Spending
•
Reducing Other Expenses
5
Average Annual Tuition - - Traditional Day Students
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$-
2003-04
2004-05
2005-06
2006-07
2007-08
AISNE
2008-09
2009-10
2010-11
2011-12
2012-13
NAIS
*Data provided by AISNE and NAIS.
Average Annual Increase Over Last 10 Years:
6
AISNE: 5.28%
NAIS: 4.32%
CPI: 2.36%
Who is Paying the Tuition?
Full Paying
Families
Full Paying
“Middle Tier”
Families
Financial Aid
Families
30%
30%
40%
Get
Have
7
Independent School Average Tuition Levels:
2003-04
2012-13
% Increase
AISNE Independent Schools
$ 17,450
$ 27,700
59%
NAIS Independent Schools
$ 14,132
$ 20,612
46%
Public School Tuition
$
$
N/A
-
-
*Data provided by AISNE and NAIS.
8
What Are The Key Financial Drivers Other Than
Tuition Levels?
Expenses
Revenues
• Number of Students
• % Budget Allocated for FA
• Fundraising
• Operating/New Programs
• Endowment Draws
• Capital Expenditures
• New Income Sources
• Program Expenses
9
More Aggressive Approaches to Increasing Tuition Levels
 Proactive Marketing to New Families
 Launching Capital Campaigns
 Identifying Facility Rental Opportunities
 Outsourcing Services to Reduce Overhead
 Eliminating Operating Inefficiencies
 Postponing Projects/Cap Ex/Reserve Allocations
10
“The world we have made as a result of the level of
thinking we have done thus far creates problems we
cannot solve at the same level of thinking at which
we created them.”
“A new type of thinking is essential if mankind is to
survive and move to higher levels.”
- Albert Einstein
11
Solomon Schechter Day School of Greater Boston
Presented by:
Carolyn Flammey
Director of Finance & Operations
Solomon Schechter Day School of Greater Boston
12
SSDS of Greater Boston
 Founded in 1961
 Located in Newton, MA
 Nursery School through 8th Grade
 Co-Ed Conservative Jewish Day School
13
SSDS of Greater Boston




2014 Enrollment:
2014 Budget:
2014 Tuition:
FA % of Tuition Revenue:
14
508
$13,000,000
$24,400
26%
The Problem
 In June 2009, Schechter’s major feeder
preschool closed
 At risk:
 $250,000 rental income
 9-12 kindergarten students
 Vacant rental property
15
The Research
 Market research suggested interest in
 High quality preschool
 Judaic and Hebrew curriculum
 Full day
 Starting at 15 months
 Parents from former preschool and current
SSDS parents also strongly in favor
16
Considerations
 Support of Board and administration
 Financial risk
 Start up costs
 Loss of rental income
 Bandwidth
 Community reaction
 Feeder schools
 Synagogues
17
Decisions
 Kindergarten feeder vs. income maximization
 Governance
 Integration with SSDS
 Admission policies
 Financial aid
 Curriculum
18
Results
 Opened September, 2011
 Full preschool enrollment
 Strong kindergarten feeder
 Generates annual surplus (though less than
previous rental income)
 Feeder preschool relations improving slowly
19
Beaver Country Day School
Presented by:
Timothy Parson
Director of Finance and Operations
Beaver Country Day School
20
Beaver Country Day School
 Founded in 1920 (as All–Girls School)
 Located in Chestnut Hill, MA
 Grades 6th through 12th Grade
 Co-Ed Progressive Day School
21
Beaver Country Day School




2014 Enrollment:
2014 Budget:
2014 Tuition:
FA % of Tuition Revenue:
22
458
$19,700,000
$39,950
19.7%
Beaver – NuVu (MIT) Partnership
Background: Fall, 2009
School
•
•
•
Financially solid
425 students; campus at capacity
Wants to pursue more hands-on project-based learning
NuVu
•
•
•
MIT graduate student venture exploring “studio” learning model
Limited financial resources
Looking for secondary school to pilot with
23
24
Start-up Phase
Winter 2009-10:
Board and internal discussion
Spring 2010:
Pilot with 20 seniors in space rented from MIT Media lab
decision to do full-year for FY11 made in late spring
Concerns:
Integration with curriculum, cost, logistics
Some fundraising to blunt initial costs
“Make glorious mistakes!”
25
Where We Are Now
•
NuVu is in its own rented space in Central Square
•
Changing array of guest “inspirers” lead studios on different topics
•
20 Beaver students (or more) per term go to NuVu by bus each day
•
Some students from other schools also attend
•
Covered by school tuition for Beaver Students (we pay NuVu a fee per
student)
•
Beaver enrollment is 25 students higher
26
Benefits
•
Huge programmatic success – changes to curriculum, school
facilities & mindset
•
Has bolstered Admissions demand
•
College list more innovative, tech-y – Stanford, Carnegie Mellon
•
And has boosted bottom line! (enabling more internal funding of
projects)
27
Sierra Canyon School
Presented by:
Jim Skrumbis
Head of School
Sierra Canyon School
28
Sierra Canyon School
 Founded in 1978 (as For-Profit School)
 Located in Chatsworth, CA
 Grades Kindergarten through 12th Grade
 In 2006, converted to a Non-Profit and added a High
School
 Co-Ed College Preparatory School
29
Sierra Canyon School




2014 Enrollment:
2014 Budget:
2014 Tuition:
FA % of Tuition Revenue:
30
990
$31,800,000
$29,400
20%
Lesley University
Presented by:
Bernice Bradin
Vice President and Chief Financial Officer
Lesley University
31
Lesley University
 Founded in 1909 (as All-Female College)
 Located in Cambridge and Boston, MA
 Co-Ed University with Graduate Programs
 Specializes in teacher education, psychology, and the arts
32
Lesley University




2014 Enrollment:
2014 Budget:
2014 Tuition:
FA % of Tuition Revenue:
33
5,195
$118,535,000
$32,000
15%
(40% for under graduate students)
Lesley University
Budget must always be balanced with a small surplus
Graduate schools vs. Undergraduate schools
Declining enrollment trends
Steps to reverse trends
34
Lesley University
Four distinct schools serving unique markets
1.
2.
3.
4.
5.
LUCLAS undergrad -- College of Arts and Sciences
Was all female until 2005; now 20% male; enrollments up
LUCAD undergrad and grad – College of Art and Design
Merged with LC in 1998; enrollments down
GSOE – grad – School of Education
For 20 years had a near monopoly on National cohort model
added hybrid/low residencies/on-line; enrollments down
GSASS --grad school of Arts & Social Sciences
Counseling Psych and Expressive Therapies
Israel Program phased out by government; other enrollments up
Threshold Program –non-degree for young adults with learning
disabilities;
Enrollments stable. Given nature of program, cannot grow
35
Lesley University
Steps to reverse trends of declining enrollments and lower revenue
•
Branding study
•
Identify causes
•
Revamped website
•
Build on strengths
•
Marketing and Advertising Campaign
•
Expense reductions
•
Cabinet Review Board for vacancy reviews
•
Systematic program reviews to determine if program should be sunset
•
Faculty retirement programs
36
Lesley University
Undergrads
•
Tuition reset—align price with what paid
•
Urban Scholars Initiative
•
Partnerships with Community Colleges
•
2+2
•
3 year degree
•
Retention focus
•
Addition of majors
•
New Art Center in Porter Square
•
Added internships to LUCAD
•
Engaged 3rd party to market on-line programs and recruit students
37
Lesley University
Graduate Programs
•
GSOE
• On-line marketing
• Certificates and professional development
• Sunsetting of low enrollment programs
•
GSASS
• International programs like Guyana – intensive low residences
• New programs in areas like Mindfulness
• Revamped Intercultural into International Education
38
Lesley University
Results
•
Tuition reset – too soon to know, but inquires have been up
•
Hybrid programs are a huge success at grad level
•
New Art Center still under construction
•
In CLAS, student numbers have stabilized
39
Summary
SSDS of Greater Boston
• Replaced lost revenues
• Established its own feeder school
• Increased enrollment
Sierra Canyon
• Increased enrollment
• Created a more diverse student body
• Identified new revenue stream
Beaver Country Day School
• Created innovative program with
MIT
• Accommodated 25 additional students
• Increased revenues
Lesley University
• Engaged marketing firm for online
recruiting
• Eliminated operational inefficiencies
• Enrollment - - Stay Tuned!
40
Summary Conclusions
All Four Pioneering Institutions:
• Faced the affordability problem in varying degrees
• Thought creatively and BIG
• Took calculated risks over approximately two years
• Added extra costs to implement new programs
• Through patience and perseverance, they succeeded to:
 Identify new, non-traditional revenue sources
 Enhance their reputations through their entrepreneurial visions
 Alleviate a portion of the affordability burden
41
Q&A
For more information please call
Elizabeth Jick
[email protected]
(617) 969-3400
42
Spring Business Conference –Wednesday, April 30, 2014
Will This Upward Spiral Ever End?
Tackling the Affordability Issue
With increasing pressures on operating budgets on the one hand,
continued economic uncertainty, unemployment, and family financial
pressures on the other, in the face of an alternative, affordable
public school education option, can independent schools continue to
increase tuition at the current rates?
Moderator:
Elizabeth Jick
Zions First National Bank
Panelists:
Carolyn Flammey
SSDS of Greater Boston, Inc.
Jim Skrumbis
Sierra Canyon School
Timothy Parson
Beaver Country Day School
Bernice Bradin
Lesley University
43

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