Corona to impact private schools without development programs

As a result of the massive global economic downturn caused by COVID-19, many private schools with inadequate or outmoded fundraising and development programs will be forced to close permanently.

With Australia facing recession, mass unemployment, business closures and stock markets in free fall, our Catholic and Independent schools - many already under financial siege from weakening enrolments, will have to turn to more strategic development measures to survive.

In even more sobering news for the private school sector, many respected finance experts like Chairman of investment giant Magellan Financial Group Hamish Douglass, have predicted that the worst is yet to come for Australia - that our economy will fall into a depression, or a severe and long term downturn in economic activity as last occurred back in 1929.

The result will be that many families will no longer be able to afford to pay a premium on private school fees and associated on-costs. Even grandparents, who in the past have been financial white knights by paying tuition fees, will no longer be able to do so, as falling stock markets eat up retirement savings and dividend income. 

Many families will ultimately have no choice but to turn to the public education system for their children, leaving many private schools vulnerable. 

Financial necessity will force parents away from private schools and into the public education system in Australia.

In Australia more generally, we will be forced to confront further harsh economic realities, that will no doubt impact upon private school funding into the future. 

Make no mistake, the multi-billion dollar government economic stimulus packages being rolled out around Australia, will have to be paid for at some point. If history tells us anything, our education system will certainly bear the brunt, along with our health and public sectors. Don’t count on much tax relief either coming our way for the next decade or three.

If all this is not cause enough for concern for the sector (CONVID-19 aside), the number of students attending private schools in Australia has been weakening for the last six years, and is expected to fall even more significantly over the next decade, according to Australian Government projections, as more parents choose the public schooling system. 

Enrolments that were historically growing at a rate of 20,000+ a year are projected to slow to only 3,000 by 2026, according to the 2019 projections, presenting a huge marketing and development challenge to the nation's private schools. I fear the current health pandemic will only serve to increase the slide - and more quickly. 

The Catholic education system (incidentally the one I was educated within), has also been forced to confront its own mortality in recent years, with forced closures and mergers of a number of schools, as demographic changes, financial pressures on families and child abuse scandals impact. The Catholic primary school system is especially feeling the pinch.

Faith-based schools are especially vulnerable in the current economic climate, as society continues to turn away from traditional Christian religions.

Let me also highlight a few more red flags from the Australian Bureau of Statistics (ABS) that don’t make great reading for the future of many private schools - particularly those that are faith-based.

• Since 2014 Catholic enrolments have declined every year with just 0.4% growth for independents
• Australians identifying as Christian in our census data has fallen by a massive 36% since 1966
• The number of children per family has halved from 3.6 to 1.8 since 1960

In order to survive, private schools will have to get more proactive and creative in their marketing and development programs if they are to survive and insulate themselves from the future external funding pressures that are now upon us.

The ‘build it and they will come’ marketing approach that has permeated throughout much of the private school sector for decades is now over. This has been replaced by increasing competition from non-traditional sources, and decreasing alignment (if not outright scepticism) towards Christian-based education making attracting new enrolments more difficult. 

More targeted and immersive marketing will be required to attract greater enrolments and support. Schools will need to reach out more strategically, meaningfully and consistently than ever before to their alumni, donors, volunteers and industry partners in order to foster long term relationship building, to attract financial support for scholarship and capital works programs. 

Old accepted approaches to development are being challenged too. Schools must now seek to add greater value to their communities outside of traditional education models.

For example, many schools still proudly point to their old warhorses - the ten year reunion program as being strategic, rolled out year after year in the forlorn hope that these events will attract financial support. Others schools too, still view sending out magazines that are filled with internal-based news to their alumni once a year, as five-star relationship-building manna from heaven. 

Is your community engagement program really engaging your intended target audience?

It is clear from the statistics, that the engagement methods used in the past by schools, are no longer cutting it in Australia.

It is time for schools in the private sector to truly and consistently invest in the business of prolonged and meaningful relationship-building to attract the kind of financial and in-kind support they will require to survive into the future. To learn to give back first, and over sustained periods, before seeking to ask and receive.

The private system will also need to consider other ‘outside the box’ solutions to the coming financial tsunami.

Is it time for private schools to lobby the federal government for a tertiary-education style loans scheme for deserving students? 

Do the systemic and independent Catholic systems merge?

Do changing demographics dictate moving away from ageing and costly-to-maintain traditional campus facilities, to new greenfields sites in developing population areas? 

Do single-sex schools convert to co-ed? Is it easier to face economic reality and just close the doors entirely? Is blended learning to help defray costs the new norm?

These and indeed many other vital questions, will need to be addressed by private schools in Australia.

What I do know is the private schools that have invested consistently in their development and marketing programs over the years, are already well ahead of the financial curve, and will proactively thrive when confronted with the economic challenges that lay ahead.

For the schools that have not adequately invested in their development programs, it is not too late to start - however the hard work must start now, or their economic abyss awaits.

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