These days, as comic relief from the daily diet of bad economic news, I find myself re-screening in my head Mel Brooks’ High Anxiety — a hilarious parody of Vertigo and other psychological thrillers by Alfred Hitchcock. Retreating into fantasy is one antidote to anxiety. In fact, Hollywood came of age during the Great Depression with Busby Berkley musicals (e.g., 42nd Street, 1933) and John Ford/John Wayne westerns (e.g., Stagecoach, 1939), and the recent increase in box office sales suggests that Hollywood is one of the few industries to benefit from our current recession.
Another antidote to recession misery is to remember our blessings. And, for us in the independent school community, one very large blessing is the loyal constituents who find a way to support our schools, especially during times of “hell and high water.” Data from the last five years of giving — tracked from a core group of schools in NAIS’s StatsOnline — shows continued, if somewhat qualified, success in independent schools’ advancement efforts to attract the discretionary income of our constituents.
• Alumni gifts are up 20.4 percent (to an average of $396 vs. $329 five years ago, in inflation-adjusted dollars), but down 4.2 percent points in participation (16.8 percent vs. 20.4 percent five years ago).
• Current parent gifts are up 27.5 percent (to an average of $1,404 vs. $1,101 five years ago, in inflation-adjusted dollars), but flat in participation (64.6 percent vs. 64.1 percent five years ago).
• Grandparent gifts are up 8.4 percent (to an average of $691 vs. $638 five years ago, in inflation-adjusted dollars), but down 1.7 percent points in participation (15.1 percent vs. 16.8 percent five years ago).
• Trustee gifts are up 13.4 percent (to an average of $6,544 vs. $5,773 five years ago, in inflation-adjusted dollars), and up 2.3 percent points in participation (95.4 percent vs. 93.1 percent five years ago).
But that was then, and this is the even-more-deeply-anxious now.
In my mind’s eye, I can imagine the opening of a school management team meeting held in an independent school head’s office. A grim-faced head begins the meeting by noting that he has called on each member of the team for a “condition of the school” report, an “update” that spares no “brutal facts.” What ensues is the catalog of mutually reinforcing factors that are “depressing.”
The admissions director, usually upbeat about the new class of students, reports some late-August attrition that produced an unexpected shortfall in enrollment and a worrisome loss of middle class families, as a byproduct of the fall in home values and the resultant loss of equity lines of credit that some families used for paying tuitions.
The financial aid officer, always fretful about not having enough money in the financial-aid budget to meet the need of prospective students, is now nearly catatonic, reporting that she’s had so many current — and, until now, full-pay — parents contact her about financial aid for next year. Honoring their request would take up much of her budget and leave precious little for new students.
The business manager, steady and unflappable by nature, appears pallid, almost at death’s door, reporting that the 30 percent drop in endowment will have a three-year deleterious impact on income used to fund operations, and that the interest rate for short-term cash has plummeted while the payment obligations on the variable-rate bonds for the school’s debt were gyrating disconcertingly.
The academic dean, the group clown, brings the defibrillator from the nurse’s office to the meeting as a visual prop to report on the high anxiety among faculty and staff, who have heard rumors of a management plan for “right-sizing,” freezing of salaries, and cutting of benefits and, consequently, fear for their jobs. Their panic, he reports, has been exacerbated by quarterly pension reports from TIAA-CREF that show that retirement is now out of the question — and they’ll have to work until death.
As a group, everyone turns simultaneously, like synchronized swimmers, to the development director, the last to report out, hopeful that her report will be the bailout the school needs to keep the ship afloat. But the recently developed nervous tick under her left eye foreshadows the cautionary message: “Don’t look at me,” she says, “since NAIS research shows that during recessions, giving to educational enterprises in all sectors in general and in independent schools in particular goes down. Board members are already expressing nervousness about the campaign and some early trepidation about making substantial ‘asks.’ ”
By now, the head is looking out the window, fantasizing about a career change, returning to the classroom to teach Macbeth, but a fleeting image of his board chair as Lady Macbeth brings him back to the moment, and he says, “So, what’s our plan?”
If your school is like many, you are being prudent, creating multiple financial scenarios for what NAIS sees as three possible outcomes for next year regarding admissions/enrollment, budget, and giving:
• Best case — continued growth or modest dip of +/- 3 to 5 percent (the normal fluctuation independent schools experience during normal times);
• Worst case — growth down 10–20 percent or more (the serious shortfall that some schools experience under disaster circumstances);
• Most likely case — down 5–10 percent (the recession verging on depression scenario).
But wait. There’s hope:
1. NAIS data shows us that while giving to independent schools stalled during the last six recessions, it did so only slightly and temporarily. More importantly, enrollment remained stable, and financial aid spiked to assure it did so.
2. During the last two recessions, discretionary spending on education actually rose: families tend to cut out everything else before they take their kids out of schools where their children are well-matched. For stressed families, independent schools are often a critical port in the storm. (In fact, in a January 21, 2009 Denver Post survey — asking “what is the last thing you would give up during the recession — respondents indicated “cable/Internet access” first, but “private school” tied for second with “vacation.”
3. Leadership rises to the occasion during crises. Our school leaders and trustees and admissions and advancement officers are professionals who have the potential to leverage the current economic crisis to create more sustainable schools for the future.
4. Schools have started having deeper, more meaningful conversations with their constituents. The first of the 95 marketing theses found at www.cluetrain.org is this: “All marketing is conversation.” The same could be said of cultivation. Frequent updates to your constituents on the school’s unwavering commitment to its mission and purpose, on your confidence in its future, and on your appreciation of the community’s support are imperative. And, for your top 100 donors, letting them know their leadership has meant so much in the past is key.
So brutal facts are always countered and ameliorated by unshakeable beliefs.
My grandson Carter, nine years old in the fourth grade, asked his mom this year to create his Halloween costume by finding a bunch of stuffed animal chickens and sewing them onto his black shirt. He was going to be a “chick magnet.” In Carter’s situation, this was a case of the triumph of hope over experience. But you’ve got to admire his spirit and panache. In this vein, we’ll build stronger schools from the adversity we’re facing now by focusing on three “value-related” means:
1. Reinforcing the value proposition: No one does PS–12 education better than independent schools.
2. Re-engineering the financials toward a more efficient and sustainable model that pays more attention to affordability in the interest of becoming not the price-leader but the value-leader.
3. Remembering that “values are the value-added” of an independent school education.
Steadiness, persistence, courage, focus, caring, and the optimism of unshakeable beliefs — these are the values that will guide us as we weather the storm.