Long-Term Sustainability for Small Schools

Thankfully, the conversations that I have been having with heads of small schools over the past couple of months have been much more positive and upbeat than they were over the past couple of years. There is a sense that the uncertainty, urgency, confusion, frustration, and anger that have been so present in the work of schools due to the pandemic, racial reckoning, political strife, and other factors, are all settling down. There is now an emphasis on healing, building, connecting, visioning, and focusing on the academic and social-emotional needs of students. Heads of schools have generally come through the last couple of years battered, but resolute and are eager to return to the joyful work of leading their schools. Yet frequently, the one area I hear about that remains an issue is with their boards. Heads of schools are very grateful for the support they have received from their boards in navigating these recent remarkable and difficult times. Many boards and board members have gone above and beyond their regular volunteer duties to help with crisis management and their assistance was critical to schools' survival. However, now that we are emerging from crisis mode, boards need to turn their attention to applying “lessons learned” to ensure the long-term sustainability of their school; and many boards are struggling to know how to do that.

In August 2022, NAIS published a paper called The Sustainability of Small Independent Schools by Dr. Scott Collins and Dr. Kristine Varney, of Peabody College, Vanderbilt University. I am always delighted when I see research focused on small schools!! This report is organized around “three main topics to assess the state of sustainability: the landscape of small schools, the challenges small schools are facing, and the approaches small schools have taken to improve their sustainability” (pg. 5). I am glad that these researchers are investigating sustainability and how it is defined. Our boards are encouraged to focus on the long-term sustainability of our schools and yet there is rarely discussion about what this means, what sustainability looks like, or how it is achieved. Drs. Collins and Varney define sustainability as “having access to the resources, financial and otherwise, necessary to achieve the organization’s mission in both the short and long term” (pg. 6). I wonder: how are our small school boards considering their school’s financial and other resources and ensuring they are accessible in both the short and long terms? What factors impact a small school’s ability to sustain and thrive into the future? And how might we support small school boards to address these factors to enhance their school’s sustainability?

Based on their research, Drs. Collins and Varney offer several suggestions for ways small schools can address sustainability. I’ve summarized them below and added comments based on my own experience working with small schools.  

1. Ensure a strong board and a positive board-head partnership. Boards that understand their responsibilities to think generatively and strategically, focus on the long-term, and stay out of daily operations are better able to realize sustainability. They are able to recognize threats and opportunities and plan for future strengths. Additionally, the relationship between a board and its head of school is critical to the overall program's success. If the current head is not provided the support needed for current operations to flourish, long-term sustainability will be negatively impacted. 

2. Clarify what is meant by sustainability for your specific school. Each small school operates with unique strengths and challenges. Boards and administrators need to clearly define the factors that will enable their school to thrive into the future and then monitor and assess their success in achieving sustainability.

3. Ensure a clear mission. Schools with a clearly articulated mission that is “lived” throughout the program, is consistently communicated, and meets a need in the marketplace are the most successful.

4. Prioritize developing reserves and/or endowments and minimize debt. This can seem daunting to many small schools. Nonetheless, the researchers found that those schools that worked to reduce debt and increase reserves/endowment felt that their overall sustainability was improved. This is consistent with ISM’s Fifth Iteration Stability Markers. 

5. Develop alternative funding streams. More and more, schools are considering business models that do not rely only on tuition and fundraising. There are several ways this can be accomplished: through auxiliary programs such as after-school clubs, childcare, and camps; building rental; developing a for-profit initiative; etc.  

6. Enlist support in developing a strong long-term financial plan. With limited resources, many small schools lack a coherent long-term financial plan which is an important resource to be able to understand and maintain the sustainability of the school. Schools that do not have the internal capability to develop such a plan benefit from having outside guidance and support from an expert. 

7. Develop partnerships or consortiums. Many small schools are collaborating with other schools, associations, and businesses to share resources and engage in other cost-saving relationships. These collaborations take many forms and can be structured to provide various levels of support.

Those of you who have worked with me will know that I don’t just like to recommend what schools should do but instead like to also give guidance on how to accomplish goals. Therefore, here are some suggestions for how to go about considering the sustainability of your small school:

1. Schedule time in a board meeting to discuss sustainability; what it means for your particular school and how you might work to achieve it. Some (generative) questions you might ask include:

• What are the factors that support our sustainability? Think about the program, your place in the market, buildings and grounds, current and future donors, etc.

• What are the factors that hinder our sustainability? 

2. Schedule time in a board meeting to consider your functioning as a board. Effective boards are better able to realize effective schools. Some (generative) questions you might ask include:

• Are we regularly achieving our goals- financial and other? 

• Are we guided by a sound strategic plan?

• Are our meetings productive and do they result in well-considered decisions?

• Do we have positive board culture and climate that allows for diverse perspectives and voices?

3. Schedule time with your finance committee and Business Officer/CFO to consider your long-term financial plan. Some (generative) questions you might ask include:

• Do we have a model for the next 3-5 years that helps our board make financial decisions?

• Are we regularly considering our financial position in the near future?

• Are we presenting financial information in a way that is understandable to all of our board members and allows them to make informed decisions?

• Given our long-term financial plan, how might we reduce debt and increase reserves/endowment?

4. Schedule time in a board meeting to consider your business plan, based on your long-term financial plan. Some (generative) questions you might ask include:

• Are there ways to change our business model that would improve the sustainability of our school? Consider alternative funding streams, partnerships, and consortiums, the expected net tuition revenue, etc.

Boards of small schools are charged with maintaining the sustainability of the school into the future; ensuring a strong, successful school for our current students’ children. However, many boards struggle to understand how to do this. With the support of recent research on small school sustainability, boards have a clearer understanding of factors that impact sustainability and how to address them to ensure that their school thrives well into the future.