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A 2014 survey of bursars from the independent school sector, carried out by accountancy firm Scott-Moncrieff, found evidence of unease about the financial future of the sector, with growing concerns that smaller schools may struggle.
Competition comes from rival private schools and the growing number of high achieving state academies and free schools.
To balance the books, establishing a coherent income generation strategy is vital. Understanding what the school is looking to achieve and developing a structured programme to suit is the first step towards realising those aspirations.
The plan should consider all six cornerstones of income generation:
Every school has its own strengths and challenges when it comes to increasing revenue but each one of these cornerstones should be considered when it comes to supporting specific projects.
The plan should encompass the key elements of an executive summary including:
Traditional sources of income will include facility hire. With school buildings and grounds only used for mainstream education for up to c. 55% of the year, there is an opportunity to sweat these assets and exploit those empty spaces.
Although more complicated for boarding schools, with a proportion of the student and staff population on site beyond the traditional school day, with robust safeguarding procedures this revenue stream is still worth consideration.
Wymondham College, the largest of the 35 state boarding schools, limits its hire period to outside of term time, but still generates in excess of £150k annually in lettings.
Even schools operating on smaller sites have facilities local communities may be willing to pay for. Identifying which spaces may be suitable is the first step, followed by understanding what your actual costs of hire are (e.g. staffing, cleaning, utility costs etc).
Developing a ‘Lettings Hire Pack’ will promote and market your facilities, and can be published on the school website to ensure all information is readily accessible.
Many summer school programs need a physical location from which to run their activities. This may be a general academic summer school, or a more specialised programme with a language, or music theme.
This is a more stable method than merely facilities rentals because summer school programs tend to be longer lasting, and if the relationship you build is mutually beneficial, then it is conceivable that the school would return summer after summer.
An added benefit of facility hires such as this is that it provides an effortless way to market to potential recruits.
The Gift Aid Small Donations Scheme allows charities to make claims on small donations of £20 or less without the need for obtaining a Gift Aid declaration from the donor.
Gift Aid can also be claimed on donations providing an additional 25% on the value of the donation. With exempt charity status schools can claim on payments retrospectively for up to four years.
The annual Independent School Council report (2016/2017) highlighted the number of private schools who have launched their own bursary fundraising campaigns, calling on alumni and parents past and present to contribute.
Some are aiming to be able to offer more than 25% of places as fully funded bursary places. Others are hoping to become 'needs blind', which means that any child who would benefit from going to the school would be able to have a place, irrespective of their family income.
There is around £1.5 billion available each year in grants and trusts for schools to apply for. There are hundreds of grant funders willing to support schools, though some of these are not available to the independent sector.
It may be worth subscribing to a grants database to help refine the search for suitable funds. Bid writing is a skill and something that develops over time.
Putting time aside to complete applications properly is essential, and careful consideration should be given to the application guidelines.
Hosting events can be time consuming but they are invaluable when it comes to raising awareness of fundraising projects and the profile of the school in general.
Careful planning and preparation can help share the burden ensuring events are not only successful but eagerly anticipated too.
Encouraging local clubs to utilise school facilities is a great way of generating regular income, and it also helps foster positive relationships.
These relationships can be incredibly helpful when it comes to applying for funding too, as testimonials and letters of support from community groups are gold dust when it comes to providing evidence of collaboration and partnership working.
One thing to be conscious of is the pricing structure for club facility hire. There is a tendency to offer spaces at overly-competitive rates so schools should be aware of their costs and local competition before setting and agreeing charges.
Many local, and national, organisations have a natural desire to engage with our schools. Some may do so for purely altruistic reasons, some may be attracted by the thought of accessing local talent pools for recruitment purposes, while others may view the relationship as beneficial to meeting its corporate social responsibility mandate.
When developing a sponsorship package, it is important to ensure the advantages to the sponsor are clear and transparent.
Various levels of investment could be available, with benefits such as advertising in newsletters and publications, regular posts on school social media outlets, a presence on a school commercial business directory etc.
Hosting business network breakfasts, in association with the local Chamber of Commerce or another network group, can help reach out to the business community and provide opportunities to engage with a new audience, encouraging support for school projects.
The operation of our schools involves a multitude of separate business units, from printing and photography to catering and maintenance.
Often, private schools will have good quality equipment, facilities and highly qualified staff who can be offered, at a price, to local businesses.
Additionally, staff with specific skills (maintenance especially) can support other local schools at highly competitive rates.
For a small school with limited human resources, it is important to select income generation activities that generate high return with less effort, and those which have an element of repeatability about them.
Regular lettings fall into this category, although there will be some pain before the gain as establishing lettings policies and costing structures takes time.
To make ends meet, schools can either cut costs, increase pupil numbers or increase their fees. Expanding revenue is a far more effective and reputationally enhancing solution as it allows the school to maintain its current pricing strategy while buffering against increased costs with an expanding revenue stream.
