2. The funding of Catholic Schools Trying to use old wineskins just doesn’t cut it any more. Exitcontinue

3. A Quick Tour The current state of funding of Catholic Schools The “old wineskins” of school funding Problems with current methods of funding Taking control of tuition Making sense (and cents) out of tuition setting.

4. Then and Now: 1962: 47% Catholic students Parishes: 63% costs Tuition: < 10% costs 96% professed religious 4% non-Catholic Av. ES tuition: <$100 2001: 16% Catholic students Parishes: 25% costs Tuition: 66% costs 5.6% religious 17% non-Catholic Av. ES tuition: $1787

5. State of funding Many dioceses have crafted policies restricting the amount of parish contribution to the school. In the short run, tuition increases have resulted in enrollment decreases. Parents are tired of endless fundraising.

6. Sources of Funds

7. Parish Subsidy

8. Parish Subsidy(Investment)

9. Some other considerations Dioceses have already paid out over $100 million in lawsuits, with hundreds of suits still pending. Dioceses may declare bankruptcy. The stock market decline has had a severe impact on church endowments and other investments Uneasy about the final destination of their contributions, many Catholics have withheld contributions to annual appeals. Public schools’ costs have skyrocketed, raising property taxes excessively.

10. Nontuition Income Elementary schools raise an average of $102,000 from fundraising. 26.2% have an annual appeal, and 48% have endowments. 15% have a development director Secondary schools derive between 1% and 5% of their income from annual appeals. 57% employ a full-time development director. 70% have an endowment of less than $1 million; 4% of more than $5million. Sources of nontuition income: Sales (income from candy, magazines has declined by 5%)Raffles have increased Annual appeal Endowment Bonds Other Exit

11. Tuition for various schools Type of SchoolElementarySecondary Catholic$1787$2823 Other religious$2606$5261 Private, nonsectarian$4693$9525 Average per pupil expenditure, all private: $5908 Average per pupil expenditure, public: $7628 (Figures as of 2000)

12. Tuition and Costs

13. Why have costs outstripped revenue? Smaller class sizes More “special” teachers, programs Updates to technology Upkeep on aging/ ill-built buildings Fewer religious Meeting state/diocesan mandates

14. Some Problems with Control over Finances

15. Perils and Pitfalls in Finance Lack of system for handling cash No control over tax exempt form No petty cash system No receipt system Commingling monies Reluctance to balance bank statements Lack of attention to budget Keeping cash unsecured Allowing school groups their own accounts Misplaced trust in employees and volunteers Ignoring cash shortfalls, missing funds

16. Maintaining Control over Income: Craft policies and controls over who may handle income, how it is handled, how it is accounted for. Have control over bank accounts, checks, purchase orders. Screen volunteers

17. Maintain Control Screen all persons who handle money; Bond those who handle money; Maintain control over cash; get rid of small accounts of other groups; Use multiple controls over disbursements; Have an annual audit or review; Have procedures for petty cash; Follow up on your suspicions; Promise prosecution and FOLLOW THRU!

18. Beware the Signs of Temptation Caring for an aging parent Spouse out of work Children in college Catastrophic illness Addiction to drugs, alcohol, gambling, shopping Increased activity

19. Let’s look at Tuition….

20. Some thoughts on tuition Non-payment of tuition constitutes a real loss. The gap between the cost per pupil and the income per pupil must be covered somehow. Fundraising only covers a gap temporarily. There is a “tuition threshold” where people finally say, “I can’t do it any more.” Every empty seat represents a real loss that cannot be made up.

21. Problems with tuition: One price fits all Lack of follow through with delinquents Lack of contract, policy Desire to be pastoral Lack of accountability for collections Lack of priority on the part of parents Labor-intensive Maintaining presence of cash, checks, etc.

22. More problems... We try to act pastorally when we are running a business; We are surprised when they pretend to pay,and we pretend to believe them; We close our eyes to their real priorities and continue to pretend to believe; We fail to help them to realize our real financial situation.

23. Crafting Tuition Policy Realize that tuition is collectible, and that parents can be held accountable. Parents should sign a tuition contract Parents should always be given as much information about costs as possible Policy should contain consequences for late and/or unpaid tuition. Policy should be crafted so as to be enforceable.

24. Gaining Control over Tuition It truly is “life’s other certainty” Know your per/pupil cost Know fixed and unfixed costs Give parents a choice of subsidy Be accountable Communicate Follow-up

25. Some steps toward improving tuition setting Communicate: parents should know the actual cost of education at your school. Communicate: how is tuition set? Be honest: everyone, whether he/she needs it or not, is getting a handout. ASK parents whether or not they want the handout. ASK parents how much of the actual cost they can pay. Craft specific policies for tuition payment. Have parents sign an enforceable tuition contract.

26. Questions to ask about how tuition is handled: Who has access? Is there a smooth, safe means of collecting? Do you have a cutoff for not accepting checks? Is there a foolproof system for checking income with bank statements? Are there fees for late payment? Are employees bonded? How do you handle scholarships and tuition aid?

27. Tuition Options Traditional –Labor-intensive –Time consuming –Hides real cost –Problems with cash flow –Low priority –Leads to annual increases

28. Options for tuition Cost-based, or Fair Share –Determine actual cost –Individual interview –Parents choose a tuition level –Annual renewal and interview –Based on honesty and trust. –Small “window” of negotiation

29. Options for Tuition Outsourcing/tuition management –Higher priority –Tuition amounts flexible –Non labor intensive –Security for deposits –Set payment schedule –Regular cash flow –Allows for some local control –Projects desire for good business practices.

30. Some REAL things you can do now: Let parents choose to accept tuition aid (difference between cost and tuition) Make tuition aid a part of registration Allow Board, Home-School to communicate need for tuition collection and value of Catholic Education. Consider a professional management company to handle tuition collection, late reminders, etc.

31. Determining Tuition Fixed Costs: School Building - Utilities - Insurance - Contracts Teacher salaries Clerical salaries Maintenance salaries Unfixed Costs: - Supplies, textbooks - Mailing, ISP, Phone -Printing, PR, Staff Development Fixed costs remain Fixed costs no matter What the enrollment Tuition ought to be Set to cover at least Fixed costs.

32. Where does your money come from? Parish/ Diocesan Support Fundraising Endowment/Invest- ments Gifts/Bequests Grants Rental of facilities Other TUITION

33. What is your tuition history? 1. Have you kept tuition below the amount needed to cover fixed costs? 2. Have you kept a record of enrollment as a result of tuition increases? 3. Have you kept track of cash flow schedules? 4. Do you have explicit criteria for determining financial aid? 5. How have you handled delinquent or tardy tuition? 6. Have you made any attempt to collect past delinquent tuition? 7. What are the consequences for delinquency? 8. Do you have an efficient system for tracking income? 9. WHAT DO YOU NEED TO DO TO IMPROVE THE SETTING AND COLLECTION OF TUITION IN YOUR SCHOOL?

34. PLEASE REMEMBER: YOU WILL NOT BE ABLE TO CONTINUE THE MINISTRY UNLESS YOU CAN PAY FOR IT.

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