4/16/2015
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Fiscal HOPE for Sobering TimesFiscal HOPE for Sobering TimesChanging Paradigms
To Listen to the RecordingTo Listen to the Recording
• Simply copy the link below and open it in a browser:
https://graceworksministries.webex.com/graceworksministries/lsr.php?RCID=714f732e40b3f7e29ef794da9a8a756b
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What’s HappeningWhat’s Happening
Christian School Enrollment Decline:
At least 750,000 since 2001 (-21%)
Christian School Enrollment Decline:
At least 750,000 since 2001 (-21%)
“The number of students
enrolled in private school
grew steadily from 1990 to
about 2001. After 2002 the
number of students enrolled
in private schools began to
decline.” Stephanie Ewert, US
Census Report, January 2013
Enrollment in ALL Private schools
01/02: 5.3-5.4 million
09/10: 4.5-4.7 million
Worse case: -900,000
Best case: -600,000
Conservatively for
Christian Schools
01/02 – 4.25 M
09/10 – 3.5 M (-21%)
Pull FactorCharter Schools
Enrollment DeclineEnrollment Decline
Push FactorChristian Schools Closing
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The REAL ProblemThe REAL ProblemWe have found the enemy = and they are us
In Human TermsIn Human Terms
“The problem is not what we do not know;
the problem is what we know that ain’t so.”
Zig Ziglar
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Collective Grey SpaceCollective Grey Space
Organizational Culture heavily influences “correct view” of
--Financial Aid Policies
--Views of Tuition pricing
Organizational Culture
A pattern of shared bias assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked
well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive,
think and feel in relation to those problems = Edgar Schein
Yes 8 we are going to have to change this!
We SHOULD be GrowingWe SHOULD be Growing5 Great Reasons
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#1: Parental Satisfaction#1: Parental SatisfactionDisney Satisfaction
Christian Schools - FundamentallyChristian Schools - Fundamentally
Less than <0 14 3%
0 to 10% 9 2% Average US company = 5 to 10%
10 to 29% 58 12%
30 to 50% 123 26% 6 of 7 Christian Schools score at least 30%
All GW Schools 50% Average all our schools
50% to 80% 251 52%
Apple 66% About 1/4 of our schools score above Apple
Amazon 73% 50 of our 480 schools score above Amazon
Costco 79%
Harley Davidson 81%
80%+ 25 5% 1 in 20 Christian schools higher than Harley!
Net Referral Scores Christian School vs. Others
(N = 480)
For Comparison: Disney: 50% McDonalds: -8% Comcast: -3%
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Indy Public Schools = -24%Indy Public Schools = -24%
Public Schools – Delaware= -25% Public Schools – Delaware= -25%
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Comparing All ChoicesComparing All Choices
LC-MS School Closed 2014LC-MS School Closed 2014
• 80th percentile, all Christian schools (N = 480)
• Net Promoter score – 74 (same as Amazon)
• Promoters: 108 of 179
• Organize events – 13
• Help events – 56
• Marketing Taskforce - 27
• Work on Website – 12
• Write Copy – 30+
• Speakers Bureau – 18
• Distribute Brochures – 70
• Unique leads from survey: 10
• Percent household income above $100,000+ = 40%
This Closure Was Absolutely Unnecessary!!!
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Answer
Net Promoter
ScoreSignifican
ceReferral
PercentileEffect Size
Net Satisfactio
n ScoreSignificanc
ePercentil
eEffect Size
Responses Percent Promoters Passives Detractors
Some High School 100 0.11 100 0.03 2 3% 2 0 0
High School Graduate 67 -0.01 67 0.05 3 4% 2 1 0
Some College 100 N (.107) 100th 0.50 100 Y (.012) 100th 0.77 10 14% 10 0 0
Associate's Degree 69 N (.913) 58th -0.03 85 N (.689) 75th 0.11 13 18% 10 2 1
Bachelor's Degree 73 N (.581) 81st 0.09 80 N (.896) 81st -0.02 30 41% 24 4 2
Masters Degree 73 N (.690) 81st 0.09 87 N (.781) 77th 0.07 15 20% 12 2 1
Doctorate 100 0.06 100 0.02 1 1% 1 0 0
Less than $15,000 100 0.22 100 0.34 4 7% 4 0 0
$15,000 to $24,999 100 0.22 100 0.20 4 7% 4 0 0
$25,000 to $34,999 100 0.11 100 0.12 3 5% 3 0 0
$35,000 to $49,999 100 0.10 100 0.20 4 7% 4 0 0
$50,000 to $74,999 100 Y (.043) 99th 0.48 100 Y (.023) 99th 0.54 16 27% 16 0 0
$75,000 to $99,999 88 0.27 100 0.40 8 13% 7 1 0
$100,000 to $149,999 56 -0.03 89 -0.33 9 15% 5 4 0
$150,000 to $199,999 78 0.09 89 0.01 9 15% 7 2 0
$200,000+ 100 0.17 100 0.18 3 5% 3 0 0
They Could Have Raised Prices!They Could Have Raised Prices!
From Steve Curtin –
Peter Drucker, the father of modern management, said, “The purpose of a business is to create and keep a customer.” And he was right. However, I would like to expand on his observation by adding, “The purpose of a business is to create a customer who keeps creating more customers.” The consulting firm Bain & Company refers to these customers as promoters. Promoters are customers who are less price-sensitive, have higher repurchase rates, and are responsible for 80-90 percent of the positive word-of-mouth about a company or brand. Companies with the highest percentage of promoters, according to Bain & Company research, typically grew revenues at more than twice the rate of their competitors
Price Demand for Christian Education is INELASTIC
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“But We Can’t Raise Tuition =”“But We Can’t Raise Tuition =”• Central Christian – Eliminated all Discounts
lost 1 student (Saved over $250K, 28 FTE’s receive 10 K raise!)
• Billings – 33% (108 to 101, now 140)
• Gainesville 140 to 210, raised tuition from 4K to 6K (Two Years) (now 315, $6300, $770K ahead)
• Nashville (2011) – 17%, 728 to 721, budgeted 685 (+$350K)
Nashville Survey
results
Before +17%
Announcement
After +17%
Announcement
Total Respondents 311 443
Referral Percentile 22nd 42nd
Satisfaction Percentile 22nd 58th
Overall Quality GapFinancial Stability Gap
Reasonable Tuition Gap
.541.35.76
.491.05.81
Gaps = Average Importance Less Average Effectiveness, 5 point scale
#2 All the Help We Need#2 All the Help We NeedYou have not because you ask not
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85% Sample (n = 465)85% Sample (n = 465)
• Distribute Brochures: 107
• Help with Events: 93
• Write stories / press releases: 49
• Layout brochures / promotional material: 31
• Organize events: 18
• Represent the school at my church: 88
• Speaker’s bureau: 39
• Serve on Marketing taskforce: 65
• Work on website: 19
• Write copy / promotional material: 23
• Make phone calls: 21
“Since the survey we've implemented two large volunteer based groups: 1) Parent Pride Organization (like a PTO)
2) Hospitality GroupBoth groups coordinate 6-10 events each year with their ultimate goal to build community
and positively impact parent satisfaction and ultimately retention.Volunteers run our annual fundraising banquet to raise needs based tuition assistance.
We also use parents to help market our school across the 45 churches and various preschool we represent across Omaha”
NPS = 60 / Tough MarketNPS = 60 / Tough Market
Relationship Advocates Apathetic Assassin
Willingness to refer 85% 9% 6%
Relationship Promoter Passive Detractor
Volunteer Leader 1% 0% 0%
Other Volunteer 5% 1% 0%
Donor 9% 2% 0%
All children enrolled 28% 9% 4%
Re-enrolling next year 30% 8% 3%
Do Satisfaction and Willingness to Refer Make a difference?Satisfaction
Referral
Total Respondents = 591 Volunteered for Marketing / Fundraising = 228Number of volunteers used = -0-
Enrollment Growth = +1 (Over 560 students)
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#3: Superior College Results#3: Superior College ResultsCollege R Us
Average College Grad Rates
Taken together, then, two powerful crosscurrents have pushed and pulled at children growing up in low-income families. On the one hand, the rewards for buckling down and graduating from college have never been higher. On the other, the resources available to low-income families to pay for their children’s preschool, for access to good public schools or to private education, and for college investments have fallen farther behind those of affluent families. Duncan et. al. Whither Opportunity, 2011 p. 5
Quartile in
Income
Yearly
Household
Income
(Thousands)
Attend
Any
College
Graduate
Any
College
Females
Graduating
Any College
High Achieving
Students
(About 95th
percentile
ACT/SAT)
Attend a
Top Tier
College
High Achieving Students at
Top Tier College
1st : Top 25% $101+ 80% 54% 68% 34% 74% 78%
2nd : 50 –
74%$61 to 100 60% 32% 52% 27% 17%
3rd : 25—
49%$34 to 60 47% 21% 21% 22% 6%
4th : 0 – 24% $0 to 33 29% 9% 9% 17% 3% 34%
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College is CRUCIALCollege is CRUCIALMeasure
High
School
Diploma
4 Year
College
Degree
Average Income $31,286 $57,181
Average IQ of children (married
to similarly educated spouse)101 109
Likelihood of living in poverty 3X X
Taxes paid X 1.8X
Vote X 2X
Satisfied with job 50% 60%
Percent of jobs lost
in 2008 recession80% 20%
Unemployment rate
during 2008 recession12.9% 4.2%
Employer provides
health insurance or pension50% 70%
White females who had
a child out of wedlock40% 4%
Prime age males not
in the labor force11% 3%
Unmarried women
in the labor force92% 76%
Have kids who are
high academic achievers3% 28%
America’s Essential Fairness
Belief in America’s essential fairness, that we live in a land of equal opportunity, helps bind us together. That, at least, is the American myth, powerful and enduring. Increasingly, it is just that – a myth. Of course, there are exceptions, but for economists and sociologists what matters are not the few success stories but what happens to most of those at the bottom and in the middle. What are their chances of making it, say, to the top? What is the likelihood that their children will be better-off than they?
If America were really a land of opportunity, the life chances of success--of, say, winding up in the top 10 percent—of someone born to a poor or less-educated family would be the same as those of someone born to a rich, well-educated, and well-connected family. But that’s simply not the case, and there is some evidence that it’s getting less so. Joseph Stiglitz, The Price of Inequality, pp. 17-18
2002 High School Sophomore in
Percent with 4-
Year College
Degree 10 Years
Later
Public School 31%
Catholic School 61%
Protestant Christian & Other
Private57%
Lauff, Erich, Steven J. Ingels, and Elise M Christopher. “Education Longitudinal Study of 2002 (ELS:2002): A First Look at 2002 High School Sophomores 10 Years Later.” U.S. Department of Education, January, 2014. Web.
N = 15,000+
��Advantage: Christian Schools��
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#4 Superior Christian Character#4 Superior Christian CharacterAmerican Christianity’s best hope
We are Losing Our Kids!We are Losing Our Kids!
50% to 70% of active, church-going young teenagers LOSE THEIR FAITH in college
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One of the most significant findings in this study is
the long-term commitment of Protestant Christian school
graduates to stay within the Protestant faith. Attending a
Protestant Christian school seems to impact graduates’
choice to stay into adulthood within the Christian faith.
Other schooling types, including Catholic schools, have no
impact on the religious affiliations their graduates choose
as adults. Again, it is helpful to note that these findings are
significant after controls for parent religion is added; this
finding supports the notion that Protestant Christian
schools should be considered an important part of the
child-rearing equation. Cardus Educational Survey, 2012,
p. 19
About 10% of Protestant school kids leave the faith. Josh McDowell (The Last
Christian Generation, p. 2006)
Ed Stetzer, Lifeway
Perhaps 40% will return.
High school seems to matter the most
Except for Protestant Schools =
#5: Superior to the Alternatives#5: Superior to the AlternativesExcept, perhaps in people’s minds =
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Many people, even this researcher, expected public charter school students to perform somewhere in between the
levels achieved by students attending faith-based schools and those attending traditional public schools, given that
they were trying to mimic certain aspects of private religious schools.
To the extent that neither traditional public schools nor charter schools are succeeding on a broad scale, it appears
that the best hope for American education is religious private schools. Not only are they considerably more
economically efficient, but their students also achieve better academic and behavioral results.
The nation should therefore rethink its strategy of espousing charter schools and overlooking the benefits of faith-
based education. William Jeynes, 2012 – “Meta Analysis of Effects and Contributions of Public, Charter, Religious
Schools.”
CREDO, National Charter School Study, 2013(95% USA sample, 2012)
Christian vs CharterChristian vs Charter
• Jeynes (1999, 2002a, 2002b, 2003b) analyzed the National Educational Longitudinal Study (NELS) and found that not only do religiously committed African American and Hispanic students to better scholastically their less religious counterparts, but that when one examines these religious minority students who are in intact families, the academic gap versus white students disappears (Bryk, Lee & Holland, 1993; Demo, Levin, & Siegler, 1997; Gaziel, 1997)© 2012, p. 33
Achievement Gaps Go Away
Carpenter / Rameriz:Hispanic Christian School Grads: 9X more likely to go to college!
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SolutionsSolutionsThe View from 40,000ft
#1 Parents Pay All They Can Afford#1 Parents Pay All They Can Afford
Ethical Question #1: How do we decide who pays less than the cost to educate their child?
Cost to Educate a child at this school: $6,200
80% of Parents on member rate paying less than $2,000
Non member = $4,400
Many parents still going half time to their old church
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Who Can Support this?Who Can Support this?
The real reason your school isNOT raising much money:
Your case for support STINKS
The real reason your board of directors won’t help raise funds:
Because Financially
This System
MAKES NO SENSE
Instead 8 Raise Money for
NEEDS BASED HELP
• Beyond a school for “rich kids” now we can raise money for a diverse socio-economic population (Vision)
• Operational deficits write lousy thank you notes (Mission) –The usual awful “Gap Appeal”
• 2nd graders write wonderful thank you notes (Vision)
(shhh = don’t tell the little old ladies in the pew =)
The Tale of two CasesThe Tale of two Cases
Dear Alumnus,
Could not balance thebudget while you were here =
= Still can’t.
HELP!
Sincerely,
Your K-12 Alma Mater
Dear Alumnus,
If you had a good experience at our school, would you give that same experience to someone else who would not be here except for your gift?
Sincerely,
Your K-12 Alma Mater
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Another Reason For Higher TuitionAnother Reason For Higher Tuition
Traditional economics assumes that prices of products in the market are determined by a balance between [supply] and [demand] = The price at which these forces meet determines the price in the marketplace = as our experiments demonstrate, what consumers are willing to pay can easily be manipulated, and this means that consumers don’t in fact have a good handle on their preferences and the prices they are willing to pay for different goods and experiences. It seems then that instead of consumers’ willingness to pay influencing market prices, the causality is somewhat reversed. It is market prices themselves that influence consumers willingness to pay. (Dan Ariely, Predictably Irrational, p 47-48)
Or In Plain EnglishOr In Plain English
= Affluent people judge the quality of your program by your price = and will not
consider you if
price is too low.
Only when I quit being so cheap and
easy did I start to get some respect!
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#2: Everything Moves to Needs-Based#2: Everything Moves to Needs-Based
• Basic assumption: FACTs / ISM / etc. will get more likely get it right than any automatics
• Automatic discounts inevitably lead to inequities
• More Biblical approach
All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had.
Acts 4:32
http://www.nytimes.com/interactive/2011/06/19/nyregion/how-many-households-are-like-yours.html?_r=0
#3: Aggressive Financial Aid#3: Aggressive Financial Aid
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#4: Market Financial Aid Right#4: Market Financial Aid Right
• Present a lump sum amount – (budget or this year’s actual).
• Do NOT present a percentage amount or average amount per student (“Average recipient receives ___% of tuition”)
• Always, Always, ALWAYS relationship before money – to get the details about financial aid, come on in (for an educational success consultation first)
• Do NOT have people fill out any financial aid forms BEFORE they have met with you educationally. Education before finance.
Temper w/ Biblical / Social NormsTemper w/ Biblical / Social Norms
• Develop your own ministry philosophy of tuition and financial aid
• Not scamming an impersonal system – cheating God!
• Website pages, financial aid covenant, philosophy – all in writing =
• Clear creative redundant communicated to parents:
“We care = but stingy = just enough = $ will
(hopefully) not stand in the way.”
GUIDING US IS A BIBLICAL PHILOSOPHY FOR TUITION
AND FINANCIAL AID : hence no “Let’s make a deal”See Social Norms / Ministry Philosophy Examples
Answering to a WAY higher standard 8
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#5: Remove Tuition from Website#5: Remove Tuition from Website
• Remove tuition from website / literature and use as a hook to get in the door:
• “Our tuition is ________ but next year we are giving away over __________ in needs based help. When you come in, we will explain how that works.”
• Harley Davidson Example
#6: Retain More Current Families#6: Retain More Current FamiliesBut first, let me ask you: If we could work out the financial issues, would you (re)enroll your child(ren)?
[If NO or Ambiguous] – What else is holding you back?
[If YES – New Family]
The first step is to come in and meet with the Principal for an Educational Success Consultation. Then we will explain our financial aid program, and have you apply.
[If YES – Current Family] You need to fill out a financial aid application.”
The subtleties of this:
1. Hope factor – with more financial aid they will try us vs quietly walking away.
2. We identify when finance really is a problem (and have the means to work with it.)
3. We “flush out” other problems beyond finance.
(No longer have the excuse: “They couldn’t provide enough financial aid anyway.”)
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#7: Enhance All Marketing Efforts#7: Enhance All Marketing Efforts
Dear Promoter of Our School,
I’m writing you today to let you know that we are making more financial aid available for the 2014/15 school year.
Perhaps you know families who would be blessed being at our school, who felt the money was unworkable.
As strongly as we can say it: Ask them to give us a chance! While time is running out, it is still not too late to enroll their child in the 2014-2015 school year.
Our goal is that no otherwise-qualified student is denied admission for reasons of finance. Not a guarantee – but our goal. We will only be able to give them just enough to make it work – no more.
The first step for those families you know is to have them meet with me. In fact, ask them if we can call to set up an appointment.
Call me at (719) 278-9600 with names of those families, and we’ll follow-up right away.
Thank you,The Principal
• It’s not just the people you know – it’s who your friends know
• So = which Promoters, Pastors, Parents, Past Parents, Local Alumni need to hear this?
On every marketing item: Financial Aid Available
#8: Focus on the Bottom Line#8: Focus on the Bottom Line
IF=
• Net revenues (tuition and other) are higher =
• Costs per child are lower =
• (Incremental) Revenues per child are in line with cost per child and =
• Cost to generate a lead is reasonable,
THEN
• To what extent does it matter if the financial aid budget was exceeded, the percent of financial was whatever, and total financial aid was _______???
Doesn’t hurt that we are
raising more money, too!
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ConclusionConclusion
• Fundamentally, difficult economic times will unite us or divide us as a nation, a community, and a church.
• We can embrace the world’s way (elitism) and do our finances in such a way that makes our schools only accessible to the fortunate wealthy. (Simple to do - but stratifying and troubling)
• Or, we can think through every aspect of how we do tuition and financial aid, and prioritize economic diversity (Difficult and complex to do, but morally right)
Critical Mass CHANGECritical Mass CHANGE
• Tweaks aren’t working – whole systems and philosophies MUST change
• Messaging critical – can’t be “half way” social norms vs hard economics
• Need to return to the spirit and ethos of Christian schools 150 years ago
