CEO Notebook |
Social distancing, working from home and long stretches without seeing family and friends face to face may be getting to you by now. With the holidays approaching, it may get worse before it gets better. We at NBOA get it and are working to help you retain your sense of connectedness professionally. One of the greatest values of NBOA membership is to help business officers and business operations staff across the country avoid feeling alone on an island of business and finance at their school — and connect with others who speak their language.
From my point of view, part of keeping you connected is keeping our fingers on the collective pulse of the business officer community so that all of us understand not just what is happening at one particular school but at schools from coast to coast. With that in mind, in mid-October, NBOA conducted a third flash survey on the financial impact of COVID-19 on independent schools in an effort to determine what has been working and what hasn’t. Participation from a representative national sample of more than 200 independent schools provided an opportunity for trendspotting.
Here’s what you and your colleagues told us. I hope the data and context help inform your ongoing leadership and management during this unusual year and beyond that, help you feel professionally connected to your colleagues. And I hope it reminds you that we are all in this together.
In most years, this enrollment data would be great news. However, this is not most years. Even though three-fourths of the schools report being fully enrolled or mostly enrolled,
This is directly attributable to the unanticipated operational expenses resulting from the COVID-19 pandemic, which is making budgetary management increasingly difficult this year.
To determine what particular unforeseen expenses are causing widespread operational deficits this year, we asked respondents, “In which area do you project the greatest additional expenditure or lost revenue in FY21?” The results, in order from greatest to smallest expense increases, include:
I asked my colleague, James Palmieri, NBOA’s executive vice president, which line items are jumping off the page and causing disruption to the bottom line. He noted the following:
Financial Aid Awards: 48% of schools reported an increase in financial aid awards up to 10% above FY20. 21% of schools reported an increase of 10-25%, and 5% of schools reported an increase of more than 25%. In total, financial aid is up at approximately 74% of schools, according to the sample.
Faculty FTEs: 35% of schools reported an increase in FTEs up to 10% above FY20. 4% of schools reported an increase of 10-25%, and 1% of schools reported an increase of more than 25%. In total, faculty FTEs were up at approximately 40% of schools, according to the sample.
Draws from Cash Reserves: 17% of schools reported an increase in their anticipated draw from cash reserves up to 10% above FY20. 9% of schools reported an increase of 10-25%, and 8% of schools reported an increase of more than 25%. In total, draws from cash reserves are up at approximately 34% of schools, according to the sample, and these percentages do not include draws from endowment and other investments which are also occurring at an increased rate.
The good news is that school leaders have responded quickly to meet the needs of families, faculty and staff. At 9 of 10 schools, the following has already happened or is in process:
Further, 77% of schools have revamped their academic calendar to provide more flexibility, and 88% of schools have added outdoor spaces to accommodate physical distances for learning and other activities.
Respondents also indicated confidence in their school’s governance:
I hope you find this information useful as you continue to navigate what promises to be the most tumultuous year of your career. And, as always, turn to NBOA and your colleagues when you need to exchange ideas, find solutions or simply connect.
COVID-19 Financial Impact on Independent Schools: What's Working and What's Not (October 2020 Flash Survey)
Business Intelligence: Now More Than Ever, Data Matters (Nov/Dec 2020)
The Business Impact of the COVID-19 Pandemic: NBOA Flash Survey Findings (Aug 2020)
Where Are We Now, and Where Are We Headed?: Flash Survey Findings (June 2020)
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