New Business Models for
Independent Schools
Marc Frankel, Ph.D. – Senior Consultant, Triangle Associates (MO)
Cynthia Berkshire – Trustee, Wildwood School (CA)
Charles Clark, Ed.D. - Headmaster Emeritus, St. Edward’s School (FL)
Kevin J. Ruth, Ph.D. – President, Endowment Strategies, Inc. (DE)
For More Information
www.ta-stl.com/Resources.html
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Click on “NAIS 2010 – Three Conceptual Models”
OR
Click on “NAIS 2010 Intro Presentation”
Contact Information
Marc Frankel……………………………………[email protected]
Cynthia Berkshire…………………………[email protected]
Charles Clark…………………………………[email protected]
Kevin Ruth…………………………[email protected]
Independent School Business Model
Mission and
Values
Activities,
services,
programs
Valued Outcomes
Pressures on Our Business Model
(1)
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Reliance on ever-increasing tuition to
support programmatic additions,
competitive salaries, and small class sizes
Competition from low- and no-cost
providers
Less successful fundraising and lower
investment returns
Tuition increases softening demand in a
stagnant economy
Pressures on Our Business Model
(2)
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Reduction in funding to schools
Religious “inner soul” search and revival
“Media on steroids” hyping abundance of
problems facing us
The Next Five Years
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Nominal investment returns
Challenging endowment giving
Interest rates artificially low;
predicted to rise
Stricter selection policies enacted to
regulate capital and tax-exempt
bond financing
Is It Time to Change the Model?
Consider How You “Do School”
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New delivery strategies
New technologies
New teaching strategies
New focus on differentiated ratios for
costing out school operations
An Unchanging Formula
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Xt + Ys + Classroom = School
How Do We Exit Baumol’s “Cost Disease” Model?
Analogy: Hotel Industry
From Here to There
Schools need to change something
fundamental within the business model…
How we operate it
Our Business is Changing
Higher Ed Growth in Enrollment
Growth in Enrollment by School
What Does It Mean?
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Concept of location (physical locale)
Concept of time (school day, etc.)
Concept of school community
Where efficiencies can be gained
What to start / what to end
Sources of programmatic innovation
Various pricing models
Differentiated product delivery streams
Teacher productivity
Three Questions for Leaders
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How do we keep the independent
school “model” in the face of
differentiated competitors?
How might we refine (or re-define)
our value proposition?
How do we decide what is a missioncongruent way of changing how we
do school?