THINKING DIFFERENTLY ABOUT DAY SCHOOL FUNDING AND PRIORITIES

THE CHALLENGE

In healthy, stable organizations with strong leadership and governance, a short-term resource challenge and even a crisis can generate innovative, adaptive thinking and great leadership. However, a steady state of financial disequilibrium can lull leaders into a vicious cycle of short-term thinking and what I would call “make-sure-we’re-still-around-tomorrow management.” When school leaders are constantly worried about balancing budgets, declining enrollment, sustaining programs, and meeting our fundraising goals, who has time to think strategically, creatively, adaptively?

How often do we make short-term decisions in the name of saving small amounts of money that actually lead to a less effective utilization of our overall resources and thus a weakening of our institution? How often have many of us gotten together with colleagues who should be our thought partners, with whom we should be dreaming about the next 10-20 years of education and our schools, only to spend most of our time addressing the question, “How are your numbers?” Might we Jewish day school leaders spend too much time managing the present and lamenting the past, and not enough time shaping a vision for the future?

I think many of us realize that we need to shift from an obsession with “sustainability” (as individual schools and as a field) to deeper conversation about sustainability for what. As PEJE taught us in its early years, mission, vision, leadership and governance are the lynchpins of sustainable schools. I applaud RAVSAK for stimulating more conversation in the field about mission and vision. At the same time, I worry that we will not be able to address a lack of missionary, visionary leadership without addressing underlying ways that our scarcity of resources and the psychology that comes along with that scarcity are undermining the quality of leadership and management in our schools.

CONTRIBUTING FACTORS

For resource-rich independent schools, large endowments, robust annual campaigns, and waiting lists of full-pay students give leaders breathing room, even as they too struggle to balance annual budgets. We know that much attention is being paid to addressing these aspects of Jewish day school sustainability. But, I believe that the mindsets that heads, boards and even foundations bring to day school funding and to resource challenges also exacerbate these challenges.

I recall, for example, sitting at a board meeting when we proposed increasing our budget allocation to professional development and leadership development. After a presentation of Independent School Management’s “Stability Markers,” which include executive leadership, allocated resources for faculty development, and a growth-oriented professional culture, one board member objected to investing in professional development on the grounds that it was “rearranging deck chairs on the Titanic.” Consider this mentality: yes, everyone knows that investments in human capital are the best, if not the only, way to secure the long-term stability of a school; however, the scarcity mentality that dominates so many budget conversations leads people to prioritize items that appear more urgent and important over items that will strengthen a school’s core as well as its adaptability over time. (Stephen Covey’s 7 Habits of Highly Effective People describes the “scarcity mentality” vs. the “abundance mentality” and the four quadrants of time management.)

Another mindset is the undervaluing of leaders’ time, at least time spent on the most important activities for leaders to be engaged in, such as visioning, coaching and mentoring others, building senior teams, stewarding major donors, and inspiring all of our stakeholders about the missions of our schools. How many heads and other senior leaders spend proportionally too much of our time “in the weeds” rather than proactively shaping and mobilizing others towards the strategic vision and most important annual and multiyear priorities for our schools? I sometimes joke, sad as it is, that while Google has (or had) the 80-20 rule, granting employees 20% of their time to “do nothing” in the name of creativity, collaboration and innovation, Jewish day schools have the 120-zero rule: teachers and leaders work 120% time on the day-to-day operations of the school, leaving no time or space for the kind of reflective, creative, generative work that ultimately sustains and grows great schools.

It appears to me that the perspectives of many incredibly generous and well meaning donors as well as large philanthropies might actually make these challenges worse. How many times have we heard, “I don’t want to fund your bottom line”? How many grants expect significant investments of senior management’s time (often, rightfully so) without including funding to account for the value of that time? If funders’ generous commitment to incentivizing innovation actually works at odds with securing the core of their operations, then this very generosity adds to a short-term funding scarcity that, paradoxically, discourages the very innovative thinking and leading that these funders are trying to support and encourage. The Bridgespan Group (The Network Starvation Cycle) has shown that many of these issues are endemic to nonprofits, in particular the underfunding of overhead by funders.

BREAKING THE SCARCITY MENTALITY

While these suggestions are obviously not exhaustive, my hope is that they will generate conversations among heads, boards and, perhaps most importantly, funders about multiyear planning, annual budgeting decisions and especially philanthropic priorities (from the perspectives of both funders and fundraisers). These suggestions intentionally do not touch several areas—namely, recruitment and retention, annual and endowment fundraising—not because they are not important, but rather because they are already receiving a great deal of attention.

Retiring the Debt

Venture philanthropy works and can be transformative when a school’s bottom line and balance sheet are stable and strong. I want to suggest, however, that for many of our schools, retiring debt, funding the bottom line, and investing in the development of human capital (in addition, of course, to new programs) would actually be the most transformative ways for donors to support our schools.

In 2009, a small group of anonymous donors made a historic gift to Gann Academy that paid off our $13 million debt. They didn’t ask for a naming opportunity, they didn’t build a building nor create a new program, not even an endowment. They made a one-time gift to arguably one of the least attractive expenses that a school has: debt. And yet, it was transformative. It allowed our school leadership to breathe. All of a sudden, instead of raising money to pay off debt service, we were given the opportunity to reimagine our financial future and to think creatively about where to reallocate those dollars. Debt, while sometimes financially prudent or at least necessary, can psychologically hang over leadership just like it hangs over individuals. By paying off debt, funders can empower leaders to dream about the future rather than live in the past, and to make vision-driven, strategic decisions with freed-up operating funds.

The most successful leaders and fundraisers are free to vision, dream and solicit support for growth and innovation precisely because their balance sheet, overhead and core operations are stable and supported. Heads, boards and funders should shout from the rooftops about the importance of funding and sustaining the right levels of investments in operations and overhead. Rather than apologizing for these expenses or avoiding asking for funders to support the school’s balance sheet, imagine a national “campaign for the bottom line.”

Innovation Funds

As important as it is to set clear goals and measure outcomes, many funders with the “logic model mindset” only want to support clear, well developed ideas that will lead to a clear set of outcomes over a clear period of time (and that are replicable across the field, scalable and ultimately sustainable without the current funders’ support!). Instead, we need to recognize the importance of freeing up budgetary dollars for leaders and teachers to have the room to experiment, pilot, innovate and dream without the expectation of linear growth or success. This would be the equivalent of an R and D department or budget, in the hands of school practitioners. These funds would be designated to stimulate new thinking and new ideas with the goal of slowly changing the short-term, scarcity mindset into more of a long-term, vision-driven mindset. Heads and boards would need to know that innovation funding will be in place over a long period of time, ideally in perpetuity, so they have the confidence to innovate with the long view in mind. Imagine a national “campaign for experimentation and innovation.”

Professional Development for Teachers and Leaders

Every head and board should define a minimum budget line for professional development across the school that goes far beyond support for conferences or professional development “days.” Schools need to have multiyear plans for cultivating a culture of growth in their schools, which includes both reflection on and improvement of the crafts of teaching and leading, as well as collaboration and experimentations in practice and in programs. Boards need to treat these budget line items as sacred and nonnegotiable as much as they do line items about “keeping the lights on.” If the electricity literally powers the operation of our facility, professional development powers the sustaining, renewal and ongoing improvement and adaptability of the people who power our schools. Imagine a national “campaign for teacher and leader renewal and growth.”

Support for Leaders’ Time

Related to funding professional development, schools need to tackle the 120-zero problem. While many of us could be functioning more efficiently and schools always need to examine their budgets, structures, head counts and overall performance for ways we can work and spend smarter, the most critical resource leaders and teachers have is their time. As long as this resource is scarce, leaders, teachers and schools will under-actualize their full potential. As long as heads spend too much time in the weeds, they will never raise the kind of dollars or recruit the number of students that we all believe are possible.

Ideally at every level of the school, but at least beginning with the head and senior management team, both summative and formative performance evaluations should focus less on “what have you accomplished” and more on “are you spending your time on the right things?” In order to hold leaders accountable for spending their time strategically, schools need to ensure that they have support and partnership around them, whether in the form of (high quality) administrative assistance or of increased human-power to share responsibility for leadership and administration.

Imagine a national “campaign for delegation and time management” aimed at creating infrastructures that enable leaders to get out of day-to-day operations and focus on their most significant strategic priorities. This of course would need to be accompanied by an aggressive professional development effort (and funding) to help leaders learn the skills of delegation and time management.

CHANGING LEADERS’ DISCOURSE

What if we put a moratorium on asking the questions of numbers and enrollment, and instead asked, how is student learning in your school? or, how is your educational program evolving in light of your mission and vision? If, indeed, we are trapped in a vicious leadership-management cycle that is closely connected to scarcity of resources, heads and boards need to recognize how our mindsets, speech and learned behaviors contribute to or break the cycle.

This has implications for what we talk about at board and senior management team meetings within schools, as well as what drives the conversations when professional and lay leaders come together across schools, whether within one community or on the national scale. Imagine a national conference not dominated by conversations about declining enrollment, short-term challenges and leadership crisis, but rather by exciting, adaptive, long-term thinking and dreaming about a future full of stronger and more vibrant schools and Jewish communities.

In order to get there, we are going to have to address our underlying, complicated relationship with financial and human resources. We need to reflect honestly as leaders and funders about the relationship between resources and our leadership. I hope that, in addition to exploring the relationships between money, scare resources, and the quality of the leadership in our schools and our communities, heads, boards and funders will have the courage and the vision to invest in the bottom line and to strengthen the core as the foundation upon which innovation and change happens. With the extraordinary amount of wealth and the tremendous, untapped leadership capacity around us, we can unlock and unleash a new cycle of visionary leadership and, as a result, a more sustainable and vibrant future for our schools and the Jewish community.

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