More than 30 years ago, ISM published a seminal article concerning the wrongful thinking often used when setting tuition. The article intended to help school leaders understand that pricing included a complex array of decision points, and that much of the “common wisdom” concerning tuition was incorrect. School leaders—notably the Board, School Head, and Management Team—must understand these variables to safeguard the school’s value proposition. Let’s re-examine four of the most prevalent erroneous premises.

We want more diversity. This phrase is often uttered during the brainstorming stages of a private-independent school’s strategic planning sessions, followed by nods of assent from other Trustees. Much informal agreement may be expressed on this general proposition; however, planning problems can ensue if key steps are not taken. Several years in the future, planners or constituents might say, “You know, we wanted more diversity but we haven’t done much about it.” A Board of Trustees or other group that wants to include “more diversity” as a planning item should consider the following three questions.

Each fall, ISM publishes a set of conversion factors to facilitate recasting previous tuitions into current dollars. (See the accompanying table.) We continue to use the Urban Consumer Price Index (CPI-U).1 However, we also realize the CPI-U does not completely reflect expenditures in private-independent schools; it can only serve as a base figure. There are compelling arguments for adjusting your tuition at a rate 2% above the overall inflation rate.2 The CPI has a built-in “productivity factor.” It assumes the workforce is increasingly productive as computers, streamlined mechanical devices, and other laborsaving developments provide greater output with fewer personnel. The more efficient a business becomes, the more the business can stabilize or reduce the effects of inflation.

In preparation for a consultation, an ISM Consultant often reviews the school’s Board bylaws. More and more, we are seeing guidelines about what constitutes a conflict of interest. One scenario that is seldom addressed, however, is when a Board member is also the spouse of a school employee. Boards frequently discuss confidential matters—matters that should not be talked about outside the Boardroom, even with a spouse. When a Trustee shares this type of information, the understanding (stated or implied) is that the employee-spouse will maintain permanent confidentiality. That expectation is inherently unfair. In addition, the spouse was not personally present to hear the details of the discussion and has only a second-hand version of what occurred. Or perhaps the spouse-employee has a confrontation with the Head (or a colleague has one) and shares something about the Head’s action that is not appropriate for the Trustee-spouse to hear. Heads often make decisions that are unpopular with individuals at the school. These decisions are made in the course of implementing policy or completing goals in the strategic plan. (Certainly, if the Head’s act was egregious, the Board needs to know about it. The information path, however, should be a written and signed letter to either the Board President or the Chair of the Head Support and Evaluation Committee.)

As your school’s Board and Management Team search for effective ways to maximize income and ensure financial stability, ask these 11 questions. (Note the following elements are exactly the items to consider in the quadrennial strategic planning sessions—not just annually. In fact, if the items are not considered in strategic planning, some of them will be difficult or impossible to implement year-by-year.)

ISM suggests five Board-level steps to take before your school’s next accrediting team visit. With advice and counsel from your Committee on Trustees and School Head, you, as Board President, should initiate the steps several months before the team arrives. Trustees must understand all facets of the accreditation process prior to the visit.