In order for independent schools to thrive in the 21st century, NAIS believes that they must be sustainable along five dimensions: financial, demographic, programmatic, environmental, and global.
NAIS believes that schools can work toward financial sustainability by becoming more efficient and strategic financially to ensure long-term viability. Below, you will find:
- Trends that back up the importance of this work.
- Action steps schools should take.
- Resources NAIS offers to help in this work.
Why is it important for schools to work toward financial sustainability?
Consider these trends:
- SCHOOLS ARE BECOMING INACCESSIBLE TO THE MIDDLE CLASS.
Given the high level of tuitions in independent schools, school administrators fear that their schools are becoming inaccessible to middle-income families.
- HIGH TUITIONS CREATE EXPECTATIONS FROM FAMILIES/CONSUMERS.
At the same time, sky-high tuitions increase parents’ expectations for measurable outcomes, and as customers, they deserve to understand and have input into what they are investing in.
(National Association of Independent Schools, NAIS Opinion Leaders Survey: Forecasting Independent Education to 2025, 2005)
- THE MIDDLE CLASS IS SHRINKING.
During the past two decades, income inequality has increased dramatically. The gap between households in the top 20 percent of the income scale and households in the bottom 20 percent of the income scale has widened significantly in 45 states.
(Jared Berstein, Heather Boushey, et. al, Pulling Apart: A State-by-State Analysis of Income Trends (Washington: Economic Policy Institute, 2002))
As middle-income families grow scarce, schools are finding it more difficult to keep socioeconomic diverse student bodies.
- FINANCIAL PRACTICES MUST HOLD UP TO SCRUTINY IN AN ACCOUNTABILITY-FOCUSED WORLD.
In reaction to the misdeeds of Enron, WorldCom, and others, new business legislation such as the Sarbanes-Oxley Act was enacted. Some officials predict that it is only a mater of time before nonprofit organizations face a similar legislation.
(National Association of Independent Schools, NAIS Opinion Leaders Survey: Forecasting Independent Education to 2025, 2005.)
What action steps can schools take now?
- Work with leadership to discuss long-term financial goals that fit into the school’s mission.
- Use data markers to assess where you are now and opportunities to reach your preferred financial future.
What resources does NAIS offer to help?
Research and Statistics
- NAIS Opinion Leaders’ Survey: Forecasting Independent Education to 2025
This report looks at major economic, demographic, social, and technological trends that will most impact independent schools in the decades to come.
- Non-Tuition Revenue Report
This 2006 report reveals results of a survey about what schools are doing to bring in additional sources of revenue to offset tuition.
This comprehensive database allows member schools (that complete the surveys) to run custom benchmarking reports to compare their figures with those of schools around the country. (Available to employees of member schools only.)
Publications, Articles, and Presentations
- Financing Sustainable Schools (workbook)
This is a hands-on book (for sale) that walks a school's financial team through the steps needed to identify – and work toward – its preferred financial future.
- Financially Sustainable Schools: Six Steps to Financial Equilibrium (PPT)
This PowerPoint presentation provides the outline for NAIS's Financially Sustainable Schools projects, developed by NAIS and its Financing Affordable Schools Taskforce. Note: It serves as a companion to Financing Sustainable Schools workbook (above).
- Independent Perspective: Financing Independent Schools for the 21st Century (article)
This Fall 2003 Independent School magazine article outlines the key trends and issues driving the need for schools to reconsider their current financial models.
- NAIS/NBOA Financing Schools Symposium Summary Report
This report highlights the proceedings of a two-day gathering of independent school leaders. Centering around three main areas – pricing and revenue, fund-raising trends, and potential new ventures, this report provides key insight into rethinking the traditional financial model used by independent schools.
- Evaluating New Ventures for Non-Tuition Revenue (PPT)
This PowerPoint presentation offers broad thinking on non-traditional ways for schools to rethink new revenue streams. It was developed by Eduventures, a consulting and research firm focused on enterprise-building within the education arena.
- Pricing Independent Schools (PPT)
Authored by Scott Looney, this PowerPoint presents the factors school leadership should consider as it contemplates affordability and "pricing" or setting tuition for the next five years, including demographics, the school's own demand levels, socioeconomic diversity goals, and growth goals.
- Rethinking Cost Drivers In Independent Schools (essay)
This essay by Sorrel Paskin examines critical and strategic considerations regarding cost factors that pressure independent school budgets. Touching on areas such as revenue enhancement, administrative process, and program development, Paskin offers a compelling overview of issues every financial strategist in schools should rethink carefully.
- Net Tuition Revenue (PPT)
This PowerPoint presentation offers suggestions for maximizing enrollment and financial aid, based on experience from the world of higher education.
- Affordability and "the Family Ford" (NAIS Blog)
Is independent school tuition supposed to be, as we’ve been saying for decades, "about the cost of the family Ford?" Visit the NAIS blog to read Former NAIS President Pat Bassett's take on the issue and accompanying data.
- The Value of Data Markers in Your Financial Planning (NAIS Blog)
The data markers outlined in the NAIS book, Financing Sustainable Schools, are offered to illustrate that a key step in the assessment of sustainability is to strategically consider areas of school operations that drive factors such as demand, satisfaction, affordability, endowment, and student outcomes (among others), which may collectively have an effect on the school's current and future financial strength.
- The NAIS Affordability Index (NAIS Blog)
The "perfect storm" facing many independent schools includes three compounding factors. I fear that, in some cases, we are in danger of becoming the Porsche of the school industry: indisputably "best of breed," but with a sticker price that is generally perceived to be so high that fewer people will even bother to come in for a test drive.
- School and Student Services for Financial Aid
SSS provides not only an objective third-party methodology for calculating a family's contribution to financial aid, but also resources to help you evaluate your financial aid program and goals in the context of your school's overall financial picture.
Books and Booklets
Trustees' GuideJune 27, 2011 This section collects myriad resources specifically for independent school trustees.
Board Orientation Template Version IOctober 8, 2009 For boards looking for a starting place in creating a board member orientation presentation, here is one that will get you moving. For schools to download and edit as appropriate.