Financial Management for Christian Schools Presented by: America’s Christian Credit Union (ACCU)
Table of Contents STARTING A CHRISTIAN SCHOOL: BEST PRACTICES
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You might be successfully pastoring a church and thinking the “next step” for your ministry is starting a school. CAUTION: Your skill and experience with operating a church might or might not translate into the unique challenges that schools present. In the first “chapter” of this series, we examine where to start, plus next steps. By Darren Thompson & Richard Koon with Robert “Bo” Gutzwiller
SO, YOU WANT TO START A CHRISTIAN SCHOOL. NOW WHAT?
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Across the country, churches are answering the call to start a private Christian School — but they’re unsure about how to navigate the process. Does this sound like your church? By Darren Thompson & Richard Koon
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CHURCH EXECUTIVE • F I N A N C I A L M A N A G E M E N T F O R C H R I S T I A N S C H O O L S
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Financial Management for Christian Schools
Starting a Christian school: best practices By Darren Thompson & Richard Koon with Robert “Bo” Gutzwiller
You might be successfully pastoring a church and thinking the “next step” for your ministry is starting a school. CAUTION: Your skill and experience with operating a church might or might not translate into the unique challenges that schools present.
Who wouldn’t be interested in finding new ways to reach the local community while impacting the lives of children, youth and families? Seems like a no-brainer, right? If you’ve been thinking about these questions, it’s likely that you and your church are considering starting a daycare or school operation. Establishing childcare and / or education can be an excellent way for your church to create cultural impact and offer families a viable alternative to public or private (non-Christian) education. However, before launching into this new venture, there are several things to consider. In an effort to arm your team with some real-world “boots on the ground” advice on this topic, we’ve enlisted the expertise of Robert “Bo” Gutzwiller. He has spent his life investing in private Christian schools as the superintendent of Foothill Christian School and serving on various boards. Most notably, Gutzwiller serves as an international executive board member for the Association of Christian Schools, International (ACSI) and Western Association of Schools and Colleges. ACSI is a Christian education organization that serves 3,000 member schools and more than 5.5 million students. Here, Gutzwiller helps bridge the gap between what a lender will want to see and some of the issues a church can encounter. churchexecutive.com
Where to start: prayer Like any new ministry, starting a daycare or school must begin with prayer and a process of seeking God’s vision for the church and its development. This new ministry will require a tremendous amount of research, planning, financial consideration, staffing adjustments, and possible capital / building improvements. This will certainly have an impact on the culture of the church. According to Gutzwiller, successfully launching a daycare or school operation requires a pastor-led and fully supportive board to commit to the vision that has been cast. He also advises that just because you can, doesn’t mean you should. The new ministry can be incredibly impactful, but this requires staying true to its vision through the ups and downs. Additionally, Gutzwiller advises churches to listen to the specific call on the church and to be open to the opportunities in your local community. Not every church is called to start a kindergarten-thru-high school ministry, so a daycare might be a good starting point, depending on the vision of the leadership team. Next steps: internal & external assessments If the senior pastor and board are aligned and want to explore this opportunity, the next step is to complete an assessment of your local community and identify a need that your ministry can meet. An afterschool program or daycare might fit this need. Your path could be slightly different than others, as was the case for Gutzwiller and Foothill Christian. In 1964, they felt their calling and had the opportunity to start a K-6 grade school. They began with 64 kids and have grown each year. Although a K-6 school is not the easiest way to enter the market — due to the high staffing cost, regulation, and possible accreditation demands — the church has remained committed to its vision and has found significance and success in its ministry. Next, an internal skills assessment is critical to determining if the church currently has competent staff with the leadership, as well as the organizational and administrative skills, needed to operate a school. Staffing requirements and costs will increase in accordance to the level of education, which is why most churches begin with a daycare; these costs are generally low and do not require advanced degrees or accreditation. Similar to the internal staff assessment, you should complete an internal facilities assessment. Ideally, your church campus should have adequate classroom space that can be used during the week by a school or daycare operation. Using your existing campus provides far greater use of your facilities and also exposes new young families to your church. If you don’t have available space, your team will need to plan for adding modular facilities, leasing space, or possibly starting a building project. As you can see, there are a lot of issues to think about when starting a school in your ministry. This series will help you unpack several key questions before taking the next step. In our next article, we will incorporate more of Gutzweiller’s thoughts and advice, while discussing what to do if your church does feel called to start a new ministry — but lacks staff. Darren Thompson is VP / Credit Services for America’s Christian Credit Union (ACCU) [ www.americaschristiancu.com ] in Glendora, Calif. Richard Koon is VP / Ministry Lending for ACCU.
F I N A N C I A L M A N A G E M E N T F O R C H R I S T I A N S C H O O L S • CHURCH EXECUTIVE
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Financial Management for Christian Schools
So, you want to start a Christian school. Now what? By Darren Thompson & Richard Koon Across the country, churches are answering the call to start a private Christian School — but they’re unsure about how to navigate the process. Does this sound like your church? In this second installment of our three-part “Financial Management for Christian Schools” series, we’ll discuss next steps, as well as some significant questions your team should consider before moving forward. In our first article, we engaged Robert “Bo” Gutzwiller, Superintendent of Foothill Christian Schools in Glendora, Calif., and international executive board member for the Association of Christian Schools (ACSI) and Western Association of Schools and Colleges. He shared insights from a successful industry executive about the questions churches should answer before starting this new ministry. If your team has spent significant time in prayer and completed internal and external assessments (as we outlined in our first article), you might be asking yourself … what’s next? Planning: Before launching any new ministry, your leadership team needs to invest significant time into developing a strategic plan. One result of your planning might be that your facilities have the capacity, but the staffing and expertise are not available. If so, you might consider an option that allows you to fully use your church campus, limits the risk and expense, but still fulfills the vision and exposes the community to your ministry. We see a growing trend of independent Christian Schools who are looking to partner with churches that can accommodate their school operations. Recently, ACSI commissioned Barna Group to conduct a research project on the state of private Christian schools. Gutzwiller was a key contributor to the report and revealed that — due to increased scrutiny — independent Christian schools might be well served to consider partnering with a church ministry to provide better protection for their religious liberty. Gutzwiller went on to say that if the mission of the Christian School is being fulfilled, one key benefactor is the church. ACSI President Dan Egeler added that bringing in companion ministries can allow the church to reach outside its walls and more effectively fulfill the mission. Competition: It will be important for your church to understand the local market and economic factors that might influence the growth, profitability and success of the school. Options for education continue to expand as public charter and magnet schools offer viable alternatives to traditional public school. In addition, homeschooling options continue to expand as internet based resources grow and make this a feasible option for more families. Local economic factors also play a role in the type of ministry your church decides to offer. In rural areas, the cost of private school is shown to be more of a deterrent. Tailoring the type of ministry to your community will allow your school or daycare to meet the specific needs of families in your area. 4
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Cost: Like most start-up ministries, schools require an investment of time and money. It’s likely that your church will need to provide financial support to the ministry for several years, depending upon your cost structure and growth projections. As you look at growth and break-even analysis for your school, it’s important to consider that more than 80 percent of private Christian Schools have less than 150 students. According to the Barna research report, parents choose private Christian Schools because they’re seeking a safe environment that will focus on character development, while also providing a quality education. However, cost was the No. 1 answer when parents were asked why they did not choose a private Christian School. The research revealed that if cost were not a factor, 38 percent of parents would prefer to send their children to a private Christian school. Keeping costs down and tuition affordable is a constant challenge, as schools tend to have higher expense ratios than a church or other ministry. Successful schools are able to generate revenue from other sources, as tuition and fees might not be enough to cover all operational expenses. In our next article, we’ll discuss some of the common pitfalls and missed opportunities from a lender’s perspective. Darren Thompson is VP / Credit Services for America’s Christian Credit Union in Glendora, Calif. Richard Koon is VP / Ministry Lending for America’s Christian Credit Union. churchexecutive.com