For private schools a change would do you good

By Alastair Lee – Director of AlumGrow Consultancy and creator of DevelopmentPro.

In the 1990’s one of my favourite music performers was US musician Sheryl Crow, and one of her hits from that era was “A Change Would Do You Good” – after listening to this recently on iTunes, I couldn’t help but think that our private schools would do well to seek inspiration from the song.

Events of this year have challenged our private school sector in Australia like never before – particularly schools in Victoria and NSW. COVID-19 has left many forced to make some tough decisions like terminating ‘non-essential’ teaching and administrative staff, shutting campuses and even considering mergers and closures.

According to the latest data released by the Australian Curriculum Assessment and Reporting Authority (ACARA), there are some 3,492 private schools in the country, educating 1.34 million students (or 40% of Australia’s total student population), and employing more than 157,200 staff. Millions of dollars also flow into the country through international students and boarders.

However, as a result of COVID, our private school system is facing the greatest financial challenge in its history as the economic recession in Australia impacts jobs, wages growth and business survival – with the on-flow effects hitting the bottom lines of most private schools hard. 

With enrolments predicted to drop by more than 10 percent in the coming year (30 per cent for international students thanks to international travel restrictions) and school investment returns dipping by more than 40 percent, it is clear that our private schools need to urgently reassess their operating approaches and adapt quickly to this developing situation. 

Even before the pandemic hit, our private school system was at a crossroads, with some significant red flags apparent in ACARA’s and Australian Bureau of Statistics (ABS) latest data sets and Federal Government modelling. For example some of these alarming stats include:

• Since 2014 Catholic enrolments (primary and secondary) have declined every year by a total of 1 percent.
• The independent school sector has experienced a negligible growth rate of just 0.5 percent over the same period.
• Government school enrolments have grown by 1.4 per cent

More generally:

• Australians identifying as Christian has fallen by 36% and Catholic by 4% since 1966.
• The average number of kids per family has now halved from 3.6 to 1.8 since 1960 and with birth rates continuing to fall.
• Private school enrolments (historically growing at a rate of 20,000+ a year) are projected by the Government to slow to only 3,000 by 2026.

Add in to this mix the continuing erosion of public confidence in a system that has in recent years been beset by abuse scandals and adverse Royal Commission findings and various other public relations missteps – and suddenly the future picture is starting to look very gloomy. I fear COVID will only worsen the predicted decreases in enrolments and the financial crisis facing the sector. 

So what are some long term viable solutions for our private education system to help it survive these current challenges and hopefully grow into the future?

With so many private schools predicting (and already in) dire financial strife many will need to make some fundamental changes to the way they operate in order to become more self-reliant.

However, what should some of these changes include? Well, here is what I am calling my Australian Private School Changing Fundamentals Plan that the sector may wish to consider further.

Invest in advancement to insulate against rainy days

A quick scan of private school websites across the country can tell you many things. As a long term education advancement and marketing professional, I continually undertake research on schools in the sector, speaking to advancement practitioners across the globe to discuss their program challenges, successes and failures.

One of the things I am constantly dismayed with from my discussions with many Australian schools, is the lack of significant investment in alumni relations and fundraising. 

Many schools have what I consider sub-standard programs that are not strategically aligned with the overall business goals of their schools - nor achieving any real sustained success in terms of ROI.

Many private schools unbelievably have no advancement programs at all, or still operate under an archaic belief that an alumni reunion program, annual magazine and maybe an annual appeal letter to supporters makes for great long-term relationship-building and ROI. Very few schools have advancement programs that are truly strategic, fit for purpose and achieving meaningful long-term ROI – at least in my opinion. My question is why? 

Advancement is not a new thing – it has been around since humans were humans. Why is there a continual reluctance by private education institutions in this country to invest in advancement? Why are the benefits of advancement still so misunderstood and even ignored by school leaders? Why are advancement resources the first to be cut when a school is looking to make budget savings? 

Private schools across the country must surely now start to take a more consistent, patient and long term view in regard to their resourcing of, and investment in their advancement programs – surely current events underline the importance of flourishing programs and how they can insulate all schools from a rainy day. 

For too long, private schools around the country have not paid enough strategic attention to the immense benefits that highly effective advancement programs can provide. One need only look to the multi-billion dollar advancement industry in the US education system to realise the benefits that flow from sustained, meaningful and consistent engagement with alumni, donors and corporate supporters. 

A well-resourced and professional advancement department can also help achieve many vital strategic imperatives for schools including - scholarship endowments, infrastructure development, cutting-edge program offerings and volunteerism. All of these things help reduce operational costs for schools, not-to-mention help open doors to industry and community leaders to benefit them. 

However advancement is also a long-term game, and often one that our private schools (and indeed universities) historically have never had the patience or impetus to implement, and so this has led to spasmodic program investment and interest.

Hopefully this pandemic will help bring more private schools to the firm realisation that a consistently well-resourced advancement units can provide so many benefits and importantly - secure their long term financial future.

Build stronger partnerships with universities

I strongly expect in coming years, that universities will seek to forge much closer ties with their private school cousins as they seek to increase and solidify their domestic student market shares. 

A mutually beneficial partnership model I believe, should be embraced by the private school sector wholeheartedly - due to the many exciting benefits it can bring.

For example, in an inspired Australian-first, Ivanhoe Grammar has recently partnered with La Trobe University in Melbourne, for a program that sees Year 9 students (in a purpose-built campus facilities) provided with a year-long university-based experience. Students also have access to other La Trobe facilities and university academics contribute to students’ studies through joint educational programs.

In Queensland too, James Cook University in Cairns has recently unveiled plans to open Newman Catholic College on campus in 2022 – this will be the first Catholic school ever to be located on an Australian university campus. One can only imagine the benefits this will bring to both institutions.

By looking to forge these stronger collaborations with the university sector, these private schools (yes by taking a risk) now stand to reap some significant long term benefits including:

• Promoting and inspiring increased tertiary education participation among their students
• Preparing their students more thoroughly for life after school and for tertiary study
• Providing opportunities for students to learn and participate in university research projects and rub shoulders with some of the brightest academic minds in the country - certainly inspiring stuff!
• Improved learning environments and facilities
• Giving greater ‘value for money’ to their students within their education offering
• Providing a distinct market advantage and point of difference over competitors
• Enhancing school branding – these schools can now legitimately claim they are market leaders in the sector

More private schools would do well to follow these leads – and I believe many more will in the years to come. My one piece of advice to schools is - don't get left behind!

Seek legitimate points of market difference

Today’s education buyers are much better informed and savvy when it comes to investing in a private school education for their children – simple market research will demonstrate this to any school. 

The education market has become so much more competitive and over-crowded, and so private schools simply must develop clearer legitimate points of market differentiation to stand out among competitors and attract more enrolments.

Schools who claim that their pastoral care, faith bases, competitive pricing, extra-curricular and study offerings are major points of difference are truly kidding themselves. Let’s face it - all schools (even in the public system) claim these things as their points of difference, when in reality they are stock standard in todays education world. 

However what is the icing on top at your school? What legitimately makes your offer better than the others? What are your proof points? How do you then sell this?

Well I can tell you from many years’ experience, that customers want much more than just basic stock standard and now just expect offerings like great pastoral care or great sports programs. Nowadays parents and students want more - they want ‘bang for buck’.

Like the partnerships models highlighted above, private schools that are prepared to take calculated and well-researched risks with their market positioning (like Ivanhoe and Newman) stand to win big in the longer term by taking paths less travelled. 

Create a Private Schools Student Loan Scheme

If the predicted private school enrolment drain by the Federal Government is on the money, then I believe schools (particularly those at most risk and with high international cohorts) should be lobbying hard for our Governments to introduce a family means-tested student loans scheme (capped at a certain percentage of tuition) to help stem the bleeding and probably as part of a wider-reaching aid package for the sector.

My plan would enable eligible families and schools (without any other recourse e.g. scholarships and bursaries) to still obtain a quality private school education for their child and pay tuition fees back through the tax system over time and with interest. Like the university system, the school would still receive their fees in full from the government year on year.

This would then allow private schools who are struggling, to maintain and even grow their enrolment numbers and revenue without seeing families who can’t afford it, walk out the door - and then have to spend even more money in marketing to try and replace them, compounding their financial problems.

Government statistics also clearly show that improved graduate outcomes flow from private sector education – so this keeps our pollies happy in the process.

Surely a win, win, win! 

Cap international student loads

Over-reliance on international students has placed many private schools – particularly those that cater for boarders, in extreme financial peril thanks to COVID-19 border lockdowns. Many of our universities are also confronting the same issue.

The last two decades have seen many schools and universities take the highly risky strategy of increasing their international student loads whilst not having any financial safety net or strategies to support themselves should the market nosedive e.g. like ensuring they have a future fund to cater for economic downturns that will inevitably always occur.

Private schools ultimately need to get back to what they were created for in the first place - educating domestic students first and foremost and then secondly the world. Schools with large international cohorts simply must embrace a financial model whereby domestic students pay all the bills and internationals are really just financial buffering. 

I believe that our State and Federal Governments should mandate for caps on international enrolments, backed by advancement led strategies and investment by all private schools to ultimately protect schools from themselves. 

Consolidate, merge and realign

Australia simply has too many 'like' private schools in the wrong regions and I fear for the future of many – particularly those in the faith-based sector. 

For example, since 2014 Catholic schools have experienced decreasing enrolments and have been losing market share for reasons such as pricing, declining societal alignment with religion, ageing facilities, abuse scandals, moving traditional markets and religious orders dying out. 

The Catholic Church in Australia has some significant concerns that it needs to address with its education system – none the least of which is abolishing its two-tiered pricing system of systemic and independent schools. This system effectively is set up to compete against itself, which in the current economic climate is financial madness.

I think many other faith-based schools will need to consider moving away from traditional offerings, structures and campus sites. Measures that will need careful consideration by schools include:

• Moving their operations and campuses to new frontiers in predicted population growth corridors
• Merging with other like schools in their regions
• Moving to co-educational models
• Merging unaligned primary and secondary schools together and adding in ELC’s
• Aligning with universities e.g. JCU and Newman College model
• Investing more heavily and strategically in private transport options e.g. providing buses to population growth areas to attract enrolments

Unless some private schools are prepared to make some of these significant calls on the way they operate, many simply will not survive much longer and to me that would be a great pity.

Conclusion

A robust and flourishing private education system lies at the very heart of a great and prosperous Australian society. As the figures indicate, the sector is one of our vital foundation pillars for strong future economic growth in Australia. Ultimately we need the private school sector to return to good health and quickly.

So maybe, just maybe, Ms Crow was on to something all those years ago with her hit song - perhaps our private educators would do well to make some overdue changes - as it would do them good.

Alastair Lee is an international award-winning senior leader in the Australian education industry, and has held many key leadership positions over the last two decades in marketing and advancement in the university and private school sectors.

He is the Founding Director of AlumGrow Consultancy - a Melbourne-based firm specialising in enrolment marketing research, brand development and advancement strategy.

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