ISM has written extensively on the subject of the Head Support and Evaluation Committee (HSEC), including an article that provided a lengthy checklist. But the nuances of this committee’s functions can escape even the longest lists, and ISM here provides further commentary and examples on this critical topic. The HSEC serves as the linking unit between governance and operations. Its composition, thus, should include a small number—often two or three—of management-savvy individuals,1 each of whom (a) has the institution’s long-term, mission-specific success as her/his only agenda, coming into the role; (b) has no predetermined (other) special agendas, no axes to grind, no hearsay-based “fixes” to impose on the School Head; and (c) has a dispassionate relationship with the Head (not too close, and certainly not adversarial).

The challenges of leading a private-independent school are increasing daily. Schools are offering more programs (curricular and cocurricular) than they did even five years ago. They are expected to provide more services designed to meet the needs of students (counseling and learning resources) and parents (extended day and summer programs). Annual fund drives are more intensive and capital campaigns more frequent. There are more faculty and staff to manage. In this “more, better, faster world,” as Head, you are expected to manage an expanding and complex set of tasks.

Each fall, ISM publishes a set of conversion factors to facilitate the recasting of previous tuitions into current dollars. (See the table on the next page.) We continue to use the Urban Consumer Price Index (CPI-U).1 However, we also realize that 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.

Competitive salaries are an obvious component in attracting and retaining teachers. In addition, employees are increasingly looking for work environments that emphasize personal growth and professional development. Also, to keep your compensation package (salaries and benefits) comparable with other schools in your area, you need a strong faculty culture to make your school truly stand out. As you and your Board review your strategies for recruiting and retaining teachers, ask yourselves if you have both promoted your faculty culture and budgeted enough money to compete in a tough job market to attract and retain mission-appropriate teachers.

Private-independent schools have been on a tear of late, building grand buildings (to match the ostentation running amok in the housing sector) or remodeling old ones. All the while, they generally are growing their endowments through the use of tax-exempt bonds leveraged in a currently favorable investment climate. (Some schools do take the more conservative approach of raising money via capital campaigns before starting construction.)

Sponsorships and endorsements are not new in private-independent schools. Local merchants support your school by placing ads in the yearbook, the students’ newspaper, and the program book for your fund raiser. Each year, local businesses sponsor your golf tournament or charity auction. These are “innocent” endeavors with, usually, no strings attached. Funds are raised without tapping parent and alumni checkbooks.

The trend in the corporate sector is to offer executives and senior managers more options in their benefit plans. Heads, perceiving an inequity between their benefits and those of corporate managers, are asking for more choices as well. According to the results of ISM’s 1999 Head Compensation Survey, a higher salary is not necessarily the item the majority of Heads would change about their compensation. When asked what they felt was missing, if anything, most Heads named specific benefits: e.g., higher retirement contribution, dental insurance, severance pay, financial counseling.

In its work with schools, ISM often hears Development Directors say that the annual fund goal is determined by the Board and School Head, based on the “gap” between expenses and expected revenues (often referred to as the “plug number”) with little consideration of data gathered by the Development Office. Further, the performance of Development Offices is frequently evaluated based on the school’s ability to meet these goals. In ISM’s experience, budgeting for gift income and evaluating the development program in this way provides an inaccurate picture of the school’s financial resources and the true fund-raising potential of the school’s constituents.

The following article comprises a supplementary recommendation regarding next-level placement and success. One of the least used – yet potentially most effective – approaches to determining your school’s overall success is tracking your students’ next-level placement and accomplishments. From this, your school can develop a database from which to strengthen its marketing impact. The two-step process involves: – deriving a graduate-outcome descriptors list from your mission statement, and – creating and using a short survey of your young alumni based upon that descriptors list.

If your most recent strategic financial planning effort is less than 24 months old, ISM’s newly revised ISM Stability Markers® list may impact your planning cycle. That is, you – the Head of School, Business Manager, or Finance Committee Chair – may not want to wait until your quadrennial strategic planning retreat arrives before undertaking a substantial revision of your financial plan. Use the following steps in your decision-making process.