The Virtuous Cycle
How Do School Leaders Decide Where To Invest Limited Resources?
Day school leaders face important decisions about where to invest limited resources as they balance the need to stay competitive with pressure to keep tuition as low as possible. They frequently hear anecdotes about how to grow and thrive, but find that there is little data available to provide objective guidance for decision making.
Reliance on anecdotal information pulls leaders in conflicting directions and limits their ability to invest time and resources effectively.
At Measuring Success, our sustainable school model takes the shape of a virtuous cycle. The foundation of this framework is perceived quality. Perceived quality is the only factor that research has shown to be positively related to enrollment growth.
Higher perceived quality in the community drives more inquiries into the school, which leads to increased enrollment. Welcoming more students into your school will also introduce more full paying families, allowing for increased flexibility, especially related to tuition levels and financial aid.
Setting tuition closer to the school’s actual cost per student is critical for long term sustainability.
Together, strong enrollment and tuition levels that match student costs combine to create higher overall coverage ratios (operating expenses covered by tuition). When dependable revenue covers the school’s operating costs, school leaders have more freedom to invest in highly valued areas of the school. Investments into areas of the school that are especially important to your parents serve to increase perceived value and further improve the word of mouth in the community, thus perpetuating the virtuous cycle.
Unfortunately, many schools find themselves stuck in the Vicious Cycle. In the Vicious Cycle, parents within the school’s community perceive that the school is low quality. A less favorable reputation among parents keeps inquiries into the school lower, resulting in fewer families overall.
With lower perceived quality, there are often fewer full-paying parents. High ratios of families with financial needs often drive schools to keep costs low.
However, maintaining artificially low prices also results in less financial aid available for middle income families and creates an arduous fundraising burden.
Consequently, schools are unable cover costs and leaders are forced to reduce expenditures by cutting programs and personnel, which further degrades the school’s perceived quality.
Implementing Data-Driven Decision Making to Enter the Virtuous Cycle
School leaders can enter the virtuous cycle by implementing the right tools to understand, benchmark, and track the school’s key value drivers over time. To make this venture even more impactful, leaders can compare their school’s results with those of their peers, both locally and nationally.
With data and knowledge in hand, leaders can understand their performance and evaluate progress over time. This process will educate and align school leaders around key initiatives, and provide a basis upon which they can set measurable goals for growth and improvement.
Measuring Success provides a suite of services that integrate across departments to provide leaders with the knowledge they need to move their school out of the vicious cycle and onto the path to sustainability and growth.
To learn more about this the Virtuous Cycle and pursuing sustainability in day schools, contact Measuring Success at firstname.lastname@example.org
About Measuring Success
Measuring Success is an independent firm dedicated to helping mission-driven organizations make data-driven decisions to maximize impact. We leverage software, analytics, market research, consulting and training to help management teams and boards drive success. Measuring Success has worked with PEJE to serve Jewish day schools since 2003.