Is it time for your school to transition to a new financial model?
This week's article comes from Jeff Davis. Having served in the role of a high school principal for 11 years and as a trusted partner for churches and faith-based schools for 20+ years, he has been helping ministries build healthy financial foundations for their mission work. He's also our Lead Consultant for School Finances here at Blueprint Schools. In this week’s article he lays out considerations for faith-based schools to ponder as the demand and cost of education continues to rise.
—————————————
A principal recently shared a story which is both alarming and intuitive. At a school board meeting discussion centered on budget work for the next year, a board member and long-time church member clearly indicated his lack of knowledge about school funding by asking, “You mean our church supports the school financially?” One could say this is an example of an extreme outlier. Or perhaps there is more truth to the statement than we care to admit.
Paul Patterson of the Wisconsin Evangelical Lutheran Synod’s Commission on Lutheran Schools summarizes recent survey responses from the synod’s faith-based schools:
According to 2021/2022 data from WELS schools:
——75% charge rates that are less that half of the cost to educate a student
——Over half of schools charge less than $10/day for a Christian education
——1 in 5 charge less than $5/day
Church subsidy for Lutheran schools usually falls between 20% and 50% of total school operations. This ministry-based model has been in existence for decades and is defined as:
The financial gifts of church members are the primary funding source for the ministries, including the Lutheran school. There is little school tuition for participating members.
In the current social milieu of the American democracy system, many parents are seeking alternative education for their children. Numerous Lutheran schools are entering building expansion plans due to increased enrollment. Demand for quality education is high: good teaching, quality facilities, and respected and competent personnel.
The above leads to an obvious statement: many faith-based schools are underfunded because of low tuition and high demand. In the current reality ministries, boards, and leaders can consider a transition to a more needs-based model of funding:
——Tuition based on the actual cost-per-pupil.
——Tuition assistance provided to families with documented needs.
——Parish gifts and other funding sources are used to create a tuition assistance pool.
There is one final consideration regarding school support from church offerings to consider. Rather than using sterile terms like “subsidizing” or “support” to explain church funding, use the word which best describes this transaction: a “gift.”
Children and parents are benefiting from a Lutheran education because of member gifts. Help all involved in a ministry see that school families receive a benefit because of the gifts from God’s people. In communication and budget wording, utilize the word “gift” to further demonstrate to school families that they are blessed because of the blessings from others.
————————————————————
For Further Consideration:
When is the last time your leadership, school board, or church council reviewed the effectiveness of your faith-based school’s current financial model?
Is your current financial model supporting the needs of your church, your school, and your school families?
If not, do you know how to create and transition to a model that supports both the current and future needs of your school ministry?
————————————————————
Looking for more help?
Schedule a consultation here —we’ll listen, answer your questions about our support, and find a way forward for your unique ministry. We can also connect you to Jeff Davis, who can share a sample plan outlining suggested steps to transition from a ministry-based model to a needs-based one over a multi-year period.
————————————————————
