Determining the REAL Cost of Education

 

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. 

Over the years,
Jeff has observed something that's causing dangerous cracks in financial foundations in schools across the country: not accurately determining school tuition and the true cost of education. 

In this week's article, he breaks down how to accurately calculate tuition and the cost of education, as well as provides
5 simple things leaders can do to build healthier financial foundations for their faith-based schools. 

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Understanding School Tuition

In its simplest form, tuition is the amount parents pay to educational organizations for educating their children. It is the part of the income ledger schools charge to balance the budget. This income offsets all the varied expenses for school operations.

Determining School Tuition

In order to determine school tuition, add up all yearly planned expenses and subtract the following from this total:

  • Hoped-for congregational gifts/subsidies

  • Endowments

  • Scholarships

  • State-supported funding

The leftover portion must be offset through tuition. This approach places tuition as one of the primary income sources for a school. It also places an emphasis on enrollment numbers to support either current or desired school size.

Cost of Education (School Expenses)

The following is a common list of school expenses. Adding these and all other expenses together helps a school determine the real cost of education (which it needs to accurately understand its tuition needs):

  • Salaries and benefits

  • Mortgage for buildings

  • Utilities and insurance

  • Office equipment

  • Supplies

  • Curriculum

  • Program and program development

  • Marketing

  • Technology

  • Administration, faculty and staff development and continuing education

  • Building and grounds maintenance

What’s at Stake?

  • To remain viable a school must balance its budget. It cannot, on a regular basis, spend more than it takes in. If it does, from a business standpoint, it will not exist very long. Income must meet expenses.

  • If a school does not properly determine school tuition and cost of education, it’s in danger of harming its financial foundation - and inhibiting its Gospel work. Our faith-based schools are wonderful tools for connecting more and more people with the Gospel. Tuition support, along with continued gifts from the congregation, are a winning combination to support this effort.

5 Ways to Strengthen Your Ministry’s Financial Foundation

  1. Communicate consistently with your school families and church members. Publicize the real cost of education two or three times per year, comparing this number with charged tuition. The gap is church gifts. Utilize a pie chart to better help readers (parents and members) visualize the tuition / gifts mix. Craft and share two to three messages per year.

  2. Thank congregational members for their gifts of support, including those for operations and mortgage. Use church newsletters and after-worship talks at least twice a year to share the congregational subsidy. Explain how tuition from parents and congregational gifts work together in your unique ministry budget. Conclude by thanking God’s people for their gifts!

  3. When school leaders and board members begin budget planning, initiate the process by identifying the total amount needed to operate the school - the cost of education. Then subtract expected gifts (congregational, scholarship, other) leaving the total amount of tuition needed to balance the budget. School enrollment and tuition charged becomes the variable for balancing budgets.

  4. Once a month, ask teachers to share impactful stories of how souls (students or families) were impacted by your ministry. Collect a database of stories and regularly share through various communication channels: devotions, Bible studies, newsletters, social media, sermons or at any meeting/gathering.

  5. Understand the cost of education in your area of the country. Find your state’s average cost of education here. Dig even deeper by doing a tuition study of the private and faith-based schools in your unique community. How does your school compare?

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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.

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Jeffrey Davis

Jeffrey Davis has served the Lutheran church as teacher, school administrator and presently, as consultant. He is owner of Cornerstone Stewardship Ministry, a consulting firm that partners with Lutheran churches and schools with planning, funding, and stewardship education. Cornerstone is a team of dedicated disciples who love to encourage God’s people to grow in the grace of giving. Jeff holds a Bachelor’s Degree in Education and a Master of Science in Curriculum and Instruction.

Jeff and his wife Sally reside in Lake Mills, Wisconsin and have been blessed with five children and ten grandchildren.

CliftonStrengths: Achiever | Discipline | Maximizer | Learner | Responsibility

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