How to Manage a Sudden Enrollment Shift
Vol. 16 No. 7
It can be a worst-case scenario for a School Head. You work with your team to solidify your budget months in advance, and plan for the coming school year accordingly. But, in August, you realize that fewer students enrolled than you had planned, or perhaps an unexpected increase in expenses surfaces.
Investigate how these events occurred and make any necessary process changes to help prevent them from happening in the future. But, in the meantime, there are a few steps to take to address the immediacy of your situation. Keep these tips in mind during this and future summers.
Analyze your Budget
The first step is to alert your Board President and the Finance Committee Chair while analyzing your school’s strategic financial plan. If your school has such a plan in place, you probably have an operating reserve set aside for this type of emergency. If that isn’t enough to cover your current expenses, you may need to find other areas in the budget to economize.
It can be difficult to change certain elements of your budget right before the school year kicks off. Faculty and staff contracts have been signed and operating expenses generally cannot be substantially altered. For most schools, that leaves only 10–15% of the operating budget available for potential cutbacks.
Whatever you choose to do, you do not want to impact mission-critical programs or alarm students, parents, and faculty about the quality of the school’s offerings or its future in the community.
As you review the operating budget, ask yourself these questions.
- Have line items creeped into our budget that we want, but don’t really need?
- Have we opted for more expensive ways of operating, but could choose to move to a more economical approach?
- Are there abandoned programs or activities that are still in the budget?
- Have we decided to add a program or activity in the coming year that could be postponed?
- Have we been lax about collecting tuition in full?
- Have we been consistent in levying a late-payment penalty for tuition?
Use the answers to these questions to make any budget cuts possible. However, these still may not be enough.
There is a one-time strategy you can employ if you can't make the budget work. It will only work once, and you must determine the answers to the following before executing it.
- Why were our enrollment or expense projections inaccurate?
- Was this situation unavoidable, or did we fail to take some elements into account?
- What steps should we take to avoid another similar situation?
Make a Special Appeal
Work with your Development Director to gather the giving records from recent annual fund campaigns, plus the list of prospects currently being cultivated by the Major Gifts Committee. Your goal is to identify a group of potential donors to whom you can make a special appeal.
You must first consult with the Board before soliciting these potential donors. Meet with the Board President and the Chairs of the Development, Finance, and Major Gifts Committees. Explain the situation and the short-term and long-term measures you recommend to address the larger problem.
Next, present your strategy for how to appeal to these donors. If the Board President and the three Chairs agree with your idea, ask for a special meeting to present the plan to the entire Boar, seeking its support. The Board must endorse this plan in full.
It can be difficult to approach this type of situation and you may not be sure how to proceed. Take charge of the situation, create a plan, work with your Board, and execute effectively to balance your budget and ensure continued success for your school.
Additional ISM Resources:
ISM Workshop The New Admission Director
ISM Workshop The New Development Director
The Source for School Heads Vol. 16 No. 5 How to Announce a New Strategic Financial Plan
The Source for Advancement Vol. 15 No. 2 You Are NOT Your Target Market: Three Steps to More Effective Communications
Additional Resources for ISM Members:
I&P Vol. 36 No. 1 Midyear Financial Reports and Your Strategic Financial Plan
I&P Vol. 36 No. 3 Your Strategic Financial Plan: Expenditure Control for the Long Run