What Is the Future of Your School?
Did you know you can predict the future of your school? It’s nothing magical or mystical. In fact, it’s just the opposite. There’s an easy way to look at your school today and figure out where you will be in the future. All you have to do is look at one figure.
That figure is your annual profit. Instantly, you say, “We’re a non-profit organization. We don’t have to worry about profits.”
It’s true that you don’t have profits but you should have a surplus. If your school is losing money, you won’t be open very long. If you break even, you’ll remain at current levels with zero growth. Yet if you have a surplus, you have the resources to grow.
One school didn’t understand this. It wanted to provide its families with an affordable education, so it kept tuition levels low. However, its tuition was so low, it was losing money and really couldn’t operate. Fortunately, the school had substantial gifts coming in for many years, which allowed the school to continue, but when hard times hit and gifts dropped off, growth came to a screeching halt.
Different schools have different profit models. Some focus it entirely on donations. Some schools have a church or other organization that supports the school. The question you have to ask is “How are we going to make enough money to not only pay for day-to-day operations, but also to make extra to grow?” Where is the money going to come from to build the school beyond what it is today?
Schools traditionally have two very clear avenues for fundraising: tuition and donations. Tuition almost always comes from the family of the student. Your business model will determine how much of the day-to-day operations that tuition will pay for each year. On average, 85% of a school’s revenue comes from tuition with the remaining 15% from donations or outside organizations. Some schools are able to charge high enough tuition that they don’t depend on giving, but outside of higher income areas, this is rare.
Many schools have a shortfall from uncollected tuition. It’s hard to keep track of so many tuition payments and make sure they’re made on time. Take Wilmington Christian Academy in North Carolina, for example. The school administrators were overwhelmed with a long list of difficult delinquent accounts.
To fix the problem, they switched to Smart Tuition from a competitor. They saw how much Smart Tuition’s software could help them clean up the delinquent accounts with care and understanding. The school went from three pages of an Excel spreadsheet list of delinquent accounts to about three people quickly and painlessly. The change had a significant impact on the school’s finances.
Another area that schools have a hard time keeping track of is all the little fees that come up for the cafeteria, book fees, summer camps, after-school programs, music program, athletics, and other Successful fundraising is a lot like farming. You have to cultivate a relationship with potential donors. Regular communication, casting your vision, and making it easy for them to donate is vital for a good relationship. 11 activities. They all cost money. Keeping up with the fees can be difficult. With Smart Tuition, “Everything goes onto their Smart account. Smart bills them and collects it. Parents really like that part of it,” said Wilmington’s business manager.
Beyond tuition and fees, donations are a major part of your school’s ability to build a surplus and grow. Sources most likely to give are students’ family members, supporting organizations (such as a church or diocese), businesses and business people, and alumni. Many schools don’t maximize their fundraising with these sources. That’s usually because they can’t keep track of all of them.
Successful fundraising is a lot like farming You have to cultivate a relationship with potential donors. Regular communication, casting your vision, and making it easy for them to donate is vital for a good relationship. Cultivating relationships isn’t just about what they can do for you. It’s also about what you can do for them.
When people see what you’re doing for them, the community, and your alumni, they want to be a part of it. Donors love being a part of something bigger that helps the community. All of this takes regular cultivation. Like a field that requires soil preparation, planting, weeding, feeding, and watering in order to see a harvest, donor management requires the same effort and constant management. Smart Tuition can connect you with Blackbaud, the premier provider of donor management software for non-profits.
The harvest you’ll experience will enable you to plan for the future, grow your school, further cultivate donations, and build a long-term legacy.