(1)  No matter what we do, the finances of our school never seem to work.   We are continually scrambling for money, and have even thought seriously about closing the school.  What can we do?

First, you must know your numbers.  Not just the total cost to educate a child, but the direct cost per child.  Compare this to your average revenues per child.

We have found schools where the direct cost to educate a child exceeds the average tuition per child.  In this case, you can selectively fill empty desks in some classrooms ... but as soon as you have to add a classroom or teacher, your financial situation is worse. 

In other words, the marketing problem is often price, not promotion.  Many Christian schools have to find a way to increase their average revenues per child. 

Because the practice is so common, few Christian schools realize the serious mistake of offering automatic tuition discounts (multi-child, church-worker, church member).   

With tuition discounts, Christian schools give away precious tuition revenues ... with no consideration of financial need whatsoever. 

Typically tuition discounts are also unfunded.  Except, now we have to raise money for a deficit -- the worst possible case for support in fundraising.

Better that all financial aid is need-based ... and we switch our fundraising to the powerful case for support of supporting a family who could otherwise not afford to attend your Christian school. 

In short, many Christian schools need to both raise tuition and needs-based financial aid, and eliminate automatic tuition discounts.  

Once tuition and financial aid policies make sense ... then start aggressive marketing promotion.

(2)  How can we possibly raise our tuition?  Many families would simply pull their child from our school ...

Because this issue is so important to the future of many Christian schools, we go into great detail in Marketing Christian Schools on how to do this. 

The reality is that there are a couple of dozen factors which determine how sensitive your families will be to a price increase.  Three big ones are:

(A)  Parent Satisfaction -- Satisfied parents are less concerned about tuition,
(B)  School Differentiation -- The more unique or different you are compared to your competitors, the less price will an issue, and
(C)  Happy Teachers -- The overall morale of your teaching and other staff is incredibly important.  Inevitably, parents in a school with low morale are more tuition conscious. 

In addition, there are a number of factors related to how you implement your tuition increase.  Handled clumsily, major changes in tuition and financial aid policies can turn happy parents into unhappy parents in a real hurry!

Because the issues are so tricky, GraceWorks offers an affordable Marketing Audit.  Christian schools can use this to get a handle on their finances, and if necessary, change tuition and financial aid accordingly.  

From a change dynamic point of view, having a outside consultant help you navigate these turbulent waters can be a real lifesaver for your school ... and/or you!  

(3)  At what point do we let parents know of our precarious financial situation?

First, it's hard to imagine that they don't already know ... to some degree.  Keep in mind that with potential bad news, imagination is a dangerous thing!

In general, parents should know all along.  They should be receiving quarterly financial summaries.  It's a great idea to have open parent / Board forums one hour before the regular Board meeting.

What parents can handle ... is the truth.  What parents can't handle is ... a BIG surprise. 

If you are about to call a Parent Meeting to the effect that "unless our financial woes are solved, we will close our doors," it will be ugly if most parents had no idea this was coming.  (So ... shame on you if they don't!)

If you don't disclosure your finances, several powerful forces will be at work to keep your tuition artificially low:

(A)  Affluent parents will always look for a great value.  They will assume that you know what you are doing in terms of your tuition rate or automatic discounts for multi-child families, etc.  Affluent parents assume that from everyone they get a great deal from.  

Affluent parents will not walk in your office and tell you that your tuition is too low, that they can't imagine how you can do so much for so little. (Although they do wonder about that.)

What's an affluent parent?  Try $75,000+ per year, according to Pam Danzinger, author of Let Them Eat Cake:  Marketing Luxury to the Masses, (C) 2006.

(B)  Parents consistently underestimate how much it really costs to educate their child.  See for yourself -- put this question on your next parent survey:

The average tuition at <organization name> covers
what percent of the cost to educate your child?  ____% 

These same parents will actually feel ill-used over a tuition increase of few hundred dollars.  We've seen this in situations where these same parents are only paying 60% of the cost to educate their child!

Instead of an "attitude of gratitude," not disclosing your finances can easily lead to a consumer mentality of "how much can I get." 

(C) If you are having money problems with no financial disclosure, parents will tend to believe there are some significant management problems.  The "word on the street" about that will hurt all your fundraising efforts, particularly with major donors.  Ditto a capital campaign.

That's why GraceWorks switched out of providing mostly fundraising to providing holistic help for "everything else."  If you don't get the "everything else" part right, fundraising is pretty tough!

The real truth is lots of Christian schools are in a financial mess for reasons of history and systems -- you can't automatically assume the current principal is to blame.  

GraceWorks can help you sort it all out with an audit of some kind, but do expect a lot of pressure from us for you to regularly disclose your finances to the families you serve.

(4)  Why is it that we hardly ever attract higher income, wealthier families into our school?  We sure could use both their tuition and their philanthropy ...  

Well, for starters, if your financial situation is too "iffy," this fact alone will tend to drive away higher-income families ... who do have other options. 

Affluent parents are looking for a "deal" yes, but enrolling a child in a Christian school with shaky finances is not a good value.  

That's one way the perception "our families can't afford higher tuition" becomes the reality.

The perceptual problem that caused this in the first place is targeting families based on income.  Your position, differentiation, purpose -- whatever you call it -- should be something else besides serving a particular economic strata.

For example, if you are the warmest, most loving Christian school in town who seeks to serve children caught up in difficult situations, who says they must be low-income families? 

We all know plenty of dysfunctional high-income families, too!  Would it be safe to say that family dysfunctionality does not seem to discriminate by income level?

We should all take a lesson from the better Episcopal schools, who actually provide large scholarships for lower income families.  There are plenty of self-made wealthy people -- not just Episcopalians -- who want their kids to be able to relate well to peers of all income levels and races.  

Chances are, the real strengths of your school have nothing at all to do with ministering to families of a certain income level.   Accentuate these real strengths, and let it be known that your Christian school seeks to bring together children of all sorts of backgrounds, teaching them to respect -- and even love - -one another.  

And if that sounds like the Kingdom of God to you ... you are so right!  

And yes, to attract higher income families, you do have to get your financial house in order.

Receive a summary of GraceWorks' view of tuition and financial aid policies here.