By Darren Thompson & Richard Koon
Across the country, churches are answering the call to start a private Christian School — but they’re unsure about how to navigate the process.
Does this sound like your church?
In this second installment of our three-part “Financial Management for Christian Schools” series, we’ll discuss next steps, as well as some significant questions your team should consider before moving forward.
In our first article, we engaged Robert “Bo” Gutzwiller, Superintendent of Foothill Christian Schools in Glendora, Calif., and international executive board member for the Association of Christian Schools (ACSI) and Western Association of Schools and Colleges. He shared insights from a successful industry executive about the questions churches should answer before starting this new ministry.
If your team has spent significant time in prayer and completed internal and external assessments (as we outlined in our first article), you might be asking yourself … what’s next?
Planning: Before launching any new ministry, your leadership team needs to invest significant time into developing a strategic plan. One result of your planning might be that your facilities have the capacity, but the staffing and expertise are not available. If so, you might consider an option that allows you to fully use your church campus, limits the risk and expense, but still fulfills the vision and exposes the community to your ministry. We see a growing trend of independent Christian Schools who are looking to partner with churches that can accommodate their school operations.
Recently, ACSI commissioned Barna Group to conduct a research project on the state of private Christian schools. Gutzwiller was a key contributor to the report and revealed that — due to increased scrutiny — independent Christian schools might be well served to consider partnering with a church ministry to provide better protection for their religious liberty.
Gutzwiller went on to say that if the mission of the Christian School is being fulfilled, one key benefactor is the church. ACSI President Dan Egeler added that bringing in companion ministries can allow the church to reach outside its walls and more effectively fulfill the mission.
Competition: It will be important for your church to understand the local market and economic factors that might influence the growth, profitability and success of the school. Options for education continue to expand as public charter and magnet schools offer viable alternatives to traditional public school. In addition, homeschooling options continue to expand as internet based resources grow and make this a feasible option for more families.
Local economic factors also play a role in the type of ministry your church decides to offer. In rural areas, the cost of private school is shown to be more of a deterrent. Tailoring the type of ministry to your community will allow your school or daycare to meet the specific needs of families in your area.
Cost: Like most start-up ministries, schools require an investment of time and money. It’s likely that your church will need to provide financial support to the ministry for several years, depending upon your cost structure and growth projections. As you look at growth and break-even analysis for your school, it’s important to consider that more than 80 percent of private Christian Schools have less than 150 students. According to the Barna research report, parents choose private Christian Schools because they’re seeking a safe environment that will focus on character development, while also providing a quality education. However, cost was the No. 1 answer when parents were asked why they did not choose a private Christian School. The research revealed that if cost were not a factor, 38 percent of parents would prefer to send their children to a private Christian school.
Keeping costs down and tuition affordable is a constant challenge, as schools tend to have higher expense ratios than a church or other ministry. Successful schools are able to generate revenue from other sources, as tuition and fees might not be enough to cover all operational expenses.
In our next article, we’ll discuss some of the common pitfalls and missed opportunities from a lender’s perspective.
Darren Thompson is VP / Credit Services for America’s Christian Credit Union in Glendora, Calif.
Richard Koon is VP / Ministry Lending for America’s Christian Credit Union.