1. Rethinking Sustainability Foundational Principles, Foundational People Dr. Alan Pue, President The Barnabas Group www.thebarnabasgroup.com apuetbg@aol.com

2. Foundational Principle #1 should not rely on projected increases Your operating budget should not rely on projected increases in enrollment, fund-raising efforts, or income from auxiliary services.

3. Foundational Principle #2 accurately differentiate between For budgeting purposes, your budget must accurately differentiate between operational costs, program enhancement costs, and capital project costs.

4. Foundational Principle #3 must include sufficient funding Balanced budgets must include sufficient funding for not only the renewal and replacement of physical assets but also the continued professional development of faculty, administration, and staff.

5. Foundational Principle #4 Onetime, nonoperational expenses should never burden a school’s operational budget. Onetime, nonoperational expenses such as a construction project, major repair of facilities, adoption of a new program, and purchases of new equipment should never burden a school’s operational budget.

6. Foundational Principle # 5 timely responses You must make timely responses to changing budget realities.

7. Foundational Principle #6 “uncontrolables” Don’t ignore the “uncontrolables”

8. Uncontrolables” The “Uncontrolables” Annual giving Planned giving Unfunded tuition Auxiliary income Facilities Technology Insurance

9. Foundational People The Problem of Conflicting Vision ▫Boards can’t... ▫Boards can... ▫Boards must... ▫Vision is born in the... ▫God is the... ▫Typically leaders are the... ▫Discovery and confirmation... ▫I wouldn’t go to the...

10. Foundational People Guarding the Trust The Role of the Board – Guarding the Trust ▫Set appropriate limitations ▫Approve executive assumptions ▫Approve compensation structures ▫Set tuition rates ▫Approve the final budget ▫Ensure appropriate oversight

11. Foundational People The Role of the CSO ▫Represent the faculty/staff to the board and the board to the faculty/staff ▫Develop, with appropriate faculty/staff participation, the assumptions on which the budget will be built ▫Ensure equity in distribution of resources ▫Propose the compensation structure ▫Provide appropriate oversight and management of the budget ▫Make the board aware of changes in any budget assumptions and recommend necessary budget revisions

12. A Two Thousand Pound Elephant What about the pastor in a church sponsored school? ▫Assumption: ▫Assumption: Any church that chooses to sponsor a school has assumed a funding responsibility for that school. ▫Recommendation: ▫Recommendation: A church sponsored school should create a separate budget that is completely distinct from the church budget, even if the church and school operate under one non-profit charter. ▫Recommendation: ▫Recommendation: All transfers of funding from church to school or school to church should be clearly articulated in writing, and both governing bodies must authorize those transfers.