Everybody likes a bargain. No matter where you go or whom you talk to, conversations invariably turn to some recent purchase that was a "steal", attesting to the outstanding bargaining skills or financial acumen of the speaker. Independent schools are no different. After all, we have a client base of parents who are spending a considerable amount of money to provide a service to their children that they could receive elsewhere for free. Consequently, it is the responsibility of every school to ensure that not only do they provide the best educational experience for every child, but that they deliver it in the most cost-effective way possible.
The Head and the Board of Governors have two complimentary responsibilities to ensure the long term health and success of any school. It is the Head’s job to design, staff and deliver the best possible educational experience for each and every child. It is the Board’s job to ensure that whatever we undertake is financially sustainable in the long-term. In a young school like Somersfield, where I am the Head, this is no mean feat! Without the large endowments and long lists of alumni that characterize many other independent schools, we have to operate pretty much on a “pay as you go” cash basis. The result is that we have to be creative and frugal at the same time. This is the month when we let parents know how deeply they are going to have to dig into their pockets to pay for next year. Although paying for schooling for their child is a bit of an act of faith, it is also critically important that they understand just where their valuable dollars are going.
To give you a baseline for comparison, the average per pupil cost of operating in the public system in Bermuda (excluding infrastructure costs) is about $23,000. At Somersfield (again excluding infrastructure costs) our per pupil operating costs this year amounted to about $16,000. We endeavor to be lean (but never mean!) in our operations, keeping our overhead as low as possible. However, a beautiful campus like ours cannot be created in under ten years without incurring significant debt. When you add in the costs of servicing and paying down a small portion of the price of constructing our fantastic gym, labs, and classrooms, our per student costs rise to about $18,330. By comparison our average tuition fee (when you factor in half-day students, and early payment discounts) is about $16,400.
Given that tuition doesn’t cover all of our expenses, where does the additional revenue come from? Somersfield does quite well in balancing its income. Tuition fees and other “hard” income (rentals of fields, gym, Common Room, playground, etc.) cover about 92% of our costs (that compares to an average of 85% in the U.S. and 90% in Ontario.) The rest is made up of donation income from Annual Giving, PTA fundraising and corporate gifts.
Where does the money go? Well, needless to say, education is a “people” business. Consequently about 70% of our budget goes to salaries, benefits, and professional development. At Somersfield, we pride ourselves on our ability to attract and retain the best faculty and staff members possible. This means offering competitive salaries and benefits and providing timely professional development to keep our staff current and on top of the latest trends and best practices in teaching and learning. Other major expenditures out of our budget include: bursaries and scholarships (5%); maintenance, repairs, and utilities (6%); classroom supplies (2%); general office and communications (2%); and loan interest and principal repayment (13%). At the end of the day, we do our best to keep costs down and quality up.
Okay, I’ll admit it, this is all pretty dry stuff! When I was being interviewed to come to Somersfield, I got asked whether I looked at the school as “a learning community” or as a “business”. The answer was, and is, simple. Independent schools are wonderful learning communities. However, they cannot provide a long-term, sustainable, positive and productive learning environment for the students in their care unless they are led and managed like a business. The two are not mutually exclusive or even in conflict. They are just the two key dimensions of any successful school.
That's the real "business" of learning.
