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Where Has the Support Gone?

Your mission’s sustainability depends on having a plan to cope with the changing economic environment.

The cost of operating your parochial school is increasing every year by at least the amount of inflation (1.6%). Most schools’ costs are increasing faster than inflation because of constantly increasing health care costs and the cost of replacing technology.

It is hard for your current donors to pay for a 1.6% or more increase in your costs when their wages are lagging behind the inflation rate. Additionally, your parents can only afford to pay for a tuition increase equal to the increase in their wages. If their wages are stagnant or rising slower than inflation, they will need additional tuition assistance or be forced to withdraw their students. The implication is that support for your growing expenses is going to be harder to find.

The additional support is only likely to come from two sources. One is the supporting congregations of your Christian school. If you have supporting congregations, this is unlikely to be a source of significant additional support, because they have been providing support for a number of years and their resources are probably thin. The second source is new donors.

The problem will become larger as time passes. Currently the growth rate of the working population is 1%. However, the national population growth is only 0.77%, which implies that the growth rate of the working population will slow.

The ideal response to the preceding is the following three steps:

Assume that it is impractical for most families to afford a tuition increase after their child enters your school

Assume it is impractical for your current donors and supporting congregations to increase their generosity at the rate of inflation

Assume that your fundraising team must increase the net number of donors (current donors minus departing donors plus new donors) at the rate of inflation plus the percentage year-on-year (YOY) increase in the budget

The third point is a starting point for your thinking. Your historic data or your data from the next few years will help you to refine our suggestion to better fit your needs.

It may appear that the third point is overcompensating for the increase in expenses. Normally one would expect the inflation rate to be imbedded in the YOY increase. However, it is risky to assume the current parents can pay any of the increasing costs. Some of those families will find that their other household expenses have increased beyond what they can afford without cutting somewhere. Therefore, those families will need additional tuition assistance. It is doubtful that every new family will be able to afford tuition at its current level. There is the additional unfortunate reality that some congregations will be unable to continue to offer inflation-adjusted support each year. Therefore, your planning process should have a built in buffer to prevent a yearend deficit.

Next Step:

Start developing the next year’s budget in the spring of the preceding year (about 15 months in advance) using the preceding assumptions to guide the process

Define the budget and tuition by September (about 6 months in advance) so that you can discuss the tuition impact with parents

Use the results of the tuition discussion with the parents to construct your fundraising plans

Develop a process for capturing alumni and alumni parents as donors as soon as the student leaves your school

It may seem like nonsense to expect a graduate to immediately become a donor. However, if you capture them as a donor (even $1/month), you will create a giving habit and sustain contact with them until they have the resources to be more generous. The same is true for their parents. Think about how many more donors you would have today if your predecessors had started the process 20 years ago.

Take It Further:

What other local, regional, and national trends should you consider when creating the long-term plan for the sustainability of your mission?

What can you do to increase donor retention?

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