Strategic Budgeting

     It's the middle of January, and you're frantically preparing for Catholic Schools Week, the pinnacle marketing effort of Catholic schools across the country.  If you haven't done so already, get a banner ad made (such as the one at the bottom of this page) and place it on your Diocesan Web site, and other Web sites of businesses and families that you have a relationship with.  So while you're working on Catholic schools week, you might want to pass this along to your business manager.

     Right about now is where your school is going to start thinking about budgeting for the coming 09-10 school year - which, according to the experts, the media, the authorities, and just about anyone else, will be one of the most difficult years we've ever known due to our nation's and the world's economic situation.  Unprecedented times call for unprecedented measures, so here's something to consider.  Most likely, you're operating your school year on revenues that are received during that same year.  Tuition capture is most important because it pays the bills for the year.  When revenue falls short, the amount of debt needs to be dealt with (or accumulates to the point that the school closes).

     Why not move to a model that generates your revenue the year before you use it?  It will make for some easier budgeting and rational decision based on facts rather than hope.  You could do this over 5 years by adding 20% of your budget to your current year, and for the next four years.  Don't use the increase in funds - just put it on the side, and put the additional 20% on the side for the next four years.  If you're operating on a subsidy model, this will increase tuition by 40% - which is very scary.   However, if there is an education piece around it, then understanding can be generated.  You can also consider moving your subsidy to financial aid based on need rather than an across the board reduction in the cost of education.

     Granted, this is a major shift in thinking from what all schools have been used to for the past 100 years, but our economic circumstances have also changed.  Schools must also examine actions in Development, Retention, Enrollment, Asset Management and Marketing strategies to see if they are effective, how they can be improved, and perhaps implement new initiatives to reach enrollment and revenue goals.  If you've never done this type of analysis before, well...you have some homework to do. 

© Michael V. Ziemski, SchoolAdvancement, 2009 (Original Publication Date: 20090112)

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