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Rethinking Sustainability

Rethinking Sustainability. Building a Better Budget Dr. Alan Pue, President The Barnabas Group www.thebarnabasgroup.com/apuetbg@ aol .com. Cost First.

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Rethinking Sustainability

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  1. Rethinking Sustainability Building a Better Budget Dr. Alan Pue, President The Barnabas Group www.thebarnabasgroup.com/apuetbg@aol.com

  2. Cost First Remember, the role of the chief school officer is to define excellence and give it a price tag. The role of the board is to decide how much excellence it wants to buy.

  3. Begin With Cost Centers “A cost center is a distinctly identifiable department, division, or unit of a firm whose managers are responsible for all associated costs and for ensuring adherence to its cost budgets.” businessdictionary.com

  4. Suggested Cost Centers • Instructional costs • Administrative/support costs • Co-curricular costs • Advancement costs • Plant operation costs • Institutionally funded financial aid costs • Auxiliary-service costs

  5. Categories/Sub-categories See handouts

  6. Financial Reports Three levels of detail • The micro level – greatest level of detail including all the financial data for each sub-category • Mid level – will show all cost of each sub-category within each cost center • Broad level – a single sheet showing the complied costs for each cost center These three levels will allow you to determine true costs while providing a usable summary budget for public discussion. You can explode or collapse your budget to expose as much or as little detail as you desire for a particular conversation or discussion.

  7. Your Biggest Investment: People • 70-80% of the typical budget • It is crucial to appropriately determine staffing needs • based upon your identified purpose and desired outcomes • appropriately defining roles and connecting “talent to task” • while understanding the concept of ROI • Determine appropriate compensation • Develop a salary schedule (see chart) • Determine appropriate fringe benefits • Professional development

  8. A Second Significant Issue • The Cost of Place • Fixed expenses – rent, lease, mortgage, insurance • Fluctuating expenses – utility costs, cleaning, repairs/maintenance, landscaping • Re-model • Depreciation • Reserve funds • Key Question • Do we rent, seek a long-term lease, purchase and re-configure, or build?

  9. Now Set Your Price • On the Horns of a Dilemma • The price for providing a quality education is increasing. • In the real world it is putting Christian schooling beyond the reach of many people. • Somebody’s Got to Pay • The solution is not to discount the cost of education • It is to create additional revenue streams • How?

  10. First, Identify Revenue Streams Income Categories • Net Tuition • Fees (as minimal as possible) • Net Auxiliary Revenue • Food service • Summer programs • Before/After school care • Resource Development Revenue • Fund raising activities • Annual fund • Capital campaign • Planned giving

  11. Now, Connect Those Streams

  12. Then, Develop Income Assumptions • Most important – Enrollment assumptions • The enrollment funnel • Tracking the data • Early re-enrollment • A retention strategy • Realistic resource development assumptions • Realistic auxiliary program income • Your business plan • Net revenue

  13. Now Set the Price A Simple Strategy (you won’t like)

  14. A Necessary Reminder and Painful Reality Education is not affordable • People • Place • Programs • Perception But it must be accessible – so what can we do?

  15. Key Strategies • Practice wise stewardship • Learn to think and act like an entrepreneur • Build transformative partnerships • Tap the underground stream

  16. Think and Act Like an Entrepreneur Keys • Identify a need and meet it with excellence • Stay focused on the main thing • Staff wisely • Build a sound business model • Target audience • Pricing model • Marketing/Implementation strategy • Measures of success • Appropriate accountability

  17. Think and Act Like an Entrepreneur Some Ideas • Full time day care • Extended care • Hot lunch program • Summer camps: music, fine arts, technology, sports, academic coaching • Music conservatory • Tutoring • English as a second language • International student program • Rental of facilities • Retail operations (unusual but possible)

  18. Building Transformative Partnerships A Theological Foundations • A heart of gratitude (2 Corinthians 8:9) • Meeting genuine needs (2 Cor 8:13-14, 1 Jn 3:16-18) • Generous giving honors God (2 Cor 9:12-14) • Practice biblical stewardship (1 Timothy 6:17-19) • Begin by examining yourself • Practice organizational generosity • Pursue biblical partnerships (Phl 1:3)

  19. Planned Giving – the underground stream A troubling reality • 50% of Christians . . . • Only 8% . . .

  20. Planned Giving – What Next? • Broaden and deepen your understanding • Identify a well qualified, respected coach • With their help create clear guidelines • Pursue partnerships with other schools/churches • Develop a strategy for identifying and connecting

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