CEO Notebook |
As I prepare to “ride the waves of change” with many of you next week at the 2019 NBOA Annual Meeting, I’m buoyed by some of the positive news drawn from an analysis of 2017-2018 data in BIIS, NBOA’s data-collection platform. We’ve already shared some initial findings from a representative sample of the 300+ independent schools that participated, but I’d like to highlight the analysis with additional context from my perspective.
Take net tuition revenue (NTR), which I believe is the most important data point for any school to track and communicate to its faculty and administration. NTR increased at 75 percent of participating schools in 2017-2018, with a median increase of 3.3 percent. We operate in an environment in which tuition increases must be aligned with a school’s perceived value and competitive market. To that end, it is imperative that school leaders track tuition increases against NTR to confirm that higher tuition is having a demonstrably positive impact on the school’s financial health. Specifically, tuition should increase at a pace the meets or exceeds increases in operating expenses (generally, higher salaries or additional FTEs).
Monitoring these data points can illustrate if a school is heading toward long-term financial health and sustainability. NTR and 11 other measures are included in The NBOA Financial Dashboard, a new tool available to NBOA member schools that have entered a complete data set into BIIS. The Dashboard is most useful to schools that have entered at least two years of data into BIIS.
Expendable financial resources also saw strong improvement in 2017-2018, increasing at 61 percent of participating schools, with a 4.7 percent increase. This important category refers to the uncommitted dollars available to schools for strategic investments in educational programs. At a time when demonstrating our unique value proposition is critically important to all schools, these investments have a high potential impact and should be allocated where they will best serve current students and families. In addition, these investments are likely important tools that benefit enrollment managers as they engage with prospective families.
Annual giving grew at 55 percent of schools, with a median increase of 1.2 percent, and total gifts and contributions increased as well. A recent news article cited similar positive news in higher education, with a direct correlation attributed to campaigns (no surprise!) driving increased giving. I would add that a school’s annual giving and gifts often serve as a proxy regarding families’ and community members’ satisfaction with the school. The fact that giving appears to be moving in a positive direction is affirming of the missions, enhancements and innovations taking place at our schools.
It’s easy to find “cup half-empty” scenarios these days. When there is good news, it is worth calling out. Moreover, it is worth looking at these key data points from the BIIS sample regarding NTR, program investments and giving, and then reflecting on the actions our own schools may take to increase our viability in these key areas.
Thank you to the schools that entered their data in BIIS during last fall’s collection period. If you weren’t among that group, BIIS is open until March 20 to accept 2017-2018 data. By simply submitting approximately 100 data points, mainly from your audited financials and payroll, your school can access valuable financial benchmark data; your school’s own customized financial dashboard; or access to the Composite Financial Index calculator.
I look forward to seeing many of you next week in San Diego. Let’s use data to look for opportunities, inform decisions and yes, “ride the waves of change” together.
Business Intelligence: Independent School Finances Gained Ground in Fiscal 2018
Business Intelligence: A Dashboard for Staff Expenses and Productivity
Business Intelligence: Markers of Sustainability
Net Tuition Revenue: the Only Number That Matters
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