Money management

Steve Wright examines some of the key financial challenges facing the independent school sector

Posted by Hannah Oakman | December 28, 2016 | Law, finance, HR

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• #finance
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• #bursaries
• #brexit
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• #sustainability
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• #academies
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Whether it be the pressures of maintaining an impactful bursaries scheme during a recession, the uncertainty caused by Brexit, or the likely competition from the growth of academies and potential return of grammar schools, independent schools are facing a few financial challenges on the horizon. So how is the sector managing, and indeed planning ahead, for future prosperity and social engagement in this complex climate? 

Samantha Price is Headmistress at Benenden School and Chair of the Girls’ Schools Association Boarding Committee and reveals: “Fees, operational costs and the unknown impact of Brexit are the undoubted main pressures on the sector at present. Many independent schools are also focusing hard on ensuring they have sufficient resources to fund bursary schemes and to develop their facilities – both of which are integral attributes of independent education, and which underpin our ethos at Benenden.”

At St Mary’s School, Cambridge, a number of related challenges are clustered around the issue of maintaining relationships with – and where possible, funding from – former pupils. 

“We face a number of challenges, predominantly incomplete and ‘bad’ alumnae data, together with a lack of historic contact with alumnae as a result of a ‘lost generation’ from the 1970s – an issue faced by many girls’ schools,” says Julie Hogg, St Mary’s Head of Development and Fundraising. “Moreover, many of our alumnae went into the caring professions and do not have the capacity to donate significantly during their lifetime. Likewise, many parents feel that they already struggle to pay the school fees, so question why they should give further funds. Outside challenges include Cambridge’s very ‘hot’ property market, which stretches many family finances and reduces the propensity to give. The increasing cost of a university education and competition from, for example, the University of Cambridge’s alumni fundraising is also a factor, as many of our parents are themselves university alumni. However, these challenges will be met head-on, and our long-term strategy is to develop partnerships with outside organisations, including the University and local businesses.”

Given these pressing financial concerns and the crucial need for schools to ensure their long-term sustainability, it should come as no surprise that an increasing number of schools are creating a dedicated Development Office to consolidate relationships and funding strands.

Benenden’s Development Office has responsibility for fundraising, marketing and communications, parent events and alumni relations. “We are part-way through a significant capital building programme, so fundraising is currently a particular focus, while our marketing and communications function is constantly adapting to ensure it is best serving the needs of current and prospective families,” Samantha Price explains.

Elsewhere, St Mary’s Cambridge established its Development Office in 2014. “Its current primary objectives,” explains Julie Hogg, “are to establish, among alumnae and parents alike, a lifelong engagement and culture of giving, based upon a foundation of building and retaining long-term relationships via careful stewardship.”

Bedford Girls’ School also has its own dedicated Development Office, although the school is not currently fundraising. “We underwent a merger six years ago, with the result that we inherited two very diverse systems for managing alumnae and fundraising activities,” describes Jo MacKenzie, Bedford’s Headmistress. “Our current focus is on bringing these together to create a coherent Alumnae Association which encompasses all of our old girls, and reconnects with friends and the wider community. Our focus has been on rebuilding friendships and trust, rather than direct fundraising.”

As such, Bedford is currently funding its current redevelopment projects through careful management of school finances, rather than fundraising drives per se. “Over the last couple of years we have redeveloped our Junior School and Sixth Form House, developed dedicated lacrosse facilities including a new club house and six new pitches, and invested in integrating one-to-one use of iPad technology throughout the school,” Jo Mackenzie explains.

Fundraising is, however, a key component in many schools’ public-facing activities. Benenden’s Centenary Vision aims to create new facilities in support of the school’s innovative curriculum, in time for its centenary in 2023. “We have just successfully met our target to raise £3m in two and a half years, which will go towards an all-weather sports pitch and pavilion and a crescent of staff housing,” says Samantha Price. “We are now focused on raising a further £5m over the next three years, to develop a new School Hall and Music School.” 

At St Mary’s Cambridge, fundraising activities include developing an online, worldwide alumnae networking system, and introducing a school fund focused on building an endowment fund for the school’s Sister Christopher Bursary Fund. “We are also continuing to develop an events-led fundraising programme, which will be defined by providing high-quality experiences that add value to the St Mary’s experience for parents and students, and to reinforce our alumnae and supporter relationships,” explains Julie Hogg.

Bursaries and scholarships are another key issue. 

In today’s pressured financial climate, are schools able to be as generous and accessible as ever with these? 

And is a time foreseen when either the amounts or numbers of bursaries and scholarships might have to be reduced? 

Not, at any rate, at Benenden, which is expanding its bursary scheme as part of the Centenary Vision. “Our Trust Award Scheme has been built up over many years in order to support girls who otherwise would not be able to consider a Benenden education,” Samantha Price adds. “Currently more than a quarter of girls at Benenden receive some form of fee reduction, and our aspiration is to build up a significant endowment so that we can offer a Benenden education to a greater number of girls. This is a principal aspiration of most Heads that I speak with: we would all like to offer more bursaries and scholarships, and are working hard to achieve this.”

Bedford Girls’ School, meanwhile, is part of The Harpur Trust, one of the UK’s oldest and most established charitable institutions. “Central to the ethos of all of member schools is the provision of academic bursaries for high-achieving students from less advantaged backgrounds,” Jo MacKenzie explains. 

“We are able to offer a number of Senior School bursaries to both internal and external applicants, although the number varies yearly dependent on the level of assistance required. These are highly competitive – but to many recipients, life-changing. We have no intention of reducing funding for bursaries: however, the number offered each year varies, dependent upon the levels of assistance required by individual families.”

St Mary’s currently offers means-tested bursaries and scholarships, awarded on a meritocratic basis. 

“Our bursary awards are assessed annually, whilst scholarships are awarded in Year 7, Year 9 and the Lower Sixth only,” explains Dr Claire Hodgskiss, St Mary’s Scholars’ Officer. “Over the last three years we have seen our budget for both increase, and we don’t expect to have to decrease funding for either. However, the rate of applications for bursaries now exceeds what we are able to provide, with a larger proportion of full bursaries (rather than a percentage of fees) also being applied for.” 

The key question for Claire Hodgskiss and her colleagues has been whether to support a smaller number of students through full bursaries, or a larger number through partial bursaries. “Our school’s remarkable foundress Mary Ward (1585–1645) dedicated her life to providing educational opportunities for girls and opening up new opportunities for women. To that end we are starting to become more involved with third-party organisations which help to identify talented individuals, for whom independent education would be a life-changing opportunity. This year sees our involvement with both the Springboard Bursary Foundation and HMC Central and Eastern Projects, which both support students who would not otherwise be able to afford an independent education. Going forward, we hope to work with a wider variety of student-placing charities who are looking to independent schools as a means to increase social mobility.”

The growth of academies, and the potential return of grammar schools, are two other ongoing scenarios to which schools must adapt. “Every organisation has to constantly look to the future,” Samantha Price acknowledges. “Benenden is currently thriving, but we have to work hard to ensure that this continues. We are about to carry out a significant piece of market research to ensure a robust strategy going forward – and the ability to plan and adapt as necessary.”

“We recognise that in order to thrive we must provide an outstanding, forward-thinking education, with a wider range of opportunities, than our grammar school counterparts,” Jo MacKenzie reflects. “Our aim is to ensure that our students leave Bedford with the skills and aptitude to be successful in their world. We need to do this while ensuring that we provide value for money for our families, and that they are fully aware of our strategy and vision. A relevant education provides more than just academic results. Through the prudent management of our finances, we are able to ensure that we invest in both our educational offering and our facilities, so as to continue to be at the forefront of education.”