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Monday, January 26, 2009

The Catholic School Crisis

Hat Tip: A reader of this blog who is free to self-identify
Please excuse any mistakes or unclear writing. I threw this together between today's many tasks.

The NY Times published an article "For Catholic Schools, Crisis and Catharsis" last week regarding the enrollment and financial issues Catholic schools are facing.

The article identifies the following issues with the way Catholic schools are/have been run which has brought the schools to their present day crisis:
  • Shortage of inexpensive labor. Schools used to be run by priests/nuns supported by the church. Today's lay staff receives compensation and pension benefits.
  • Relaxation of religious obligations which used to include sending children to church run schools to be a member in good standing.
  • A change in demographics from well compensated parishioners to pews filled with the working poor.
  • Rising tuition .
  • Parents accuse schools of being slow to react to societal change and unwilling to admit problems.
  • Priests are not well qualified to run schools (Note this quote: "There is not a single seminary in the United States offering courses in finance, marketing, business management or long-term planning,” said Richard J. Burke, president of Catholic School Management,).
I specifically highlighted some of these issues because I think the same can be said of many Orthodox schools. In regards to labor: as more women turn to higher paying professions, attracting staff becomes more expensive. Some Modern Orthodox schools are trying to bring their level of compensation in line with public schools, which is obviously a very difficult thing to do. In regards to demographics I think it is fair to say that we have our own growing population of "working poor," either young parents who are not yet working/in a career path while enrolling children in school, young parents who simply don't have the resources expected due to high debt loads, etc. Like the Catholic schools, I don't believe that a master's in education and/or semicha requires a practical business management education.

While our schools are growing, I see some of the issues hurting Catholic schools to be very similar. This is the money quote in the article: "It was taken for granted for a long time that Catholic schools would always be there,” said Dr. Karen M. Ristau, president of the National Catholic Educational Association, a lobbying group. “People are beginning to realize that this is a false assumption.”Basically the Catholic Church enjoyed its success and stagnated its development believing that of course they would always be around. But, competition developed in the form of charter schools. Parents struggled to pay already low tuition, sometimes as low as a few thousand a year. And, now there is a realization that business as usual isn't going to cut it.

Different locales are trying different solutions. It should be interesting to see how some of these solutions fare in the long run. I don't know what ideas if any could be borrowed successfully. But, I'm not really sure that the community as a whole is really ready for change anyways.

17 comments:

JS said...

But, I'm not really sure that the community as a whole is really ready for change anyways

Completely agree. All I see is a lot of complaining and no action. Everyone wants a bailout either in the form of rich donors to set up a SuperFund or vouchers, etc. Everyone makes threats they'll pull their kids out to send the yeshivas a message or enroll their kids in public school en masse to send the public schools a message.

In the end, it's a lot of hot air. It seems very few, if any, are willing to take the first step. Furthermore, the ones least likely to want any change and least likely to take any action are the ones already receiving the scholarships and tuition reductions. Only when the ones paying in full and the other donors leave will the rug be pulled out from under everyone. The letter writer who makes $61K and is being asked to pay more, while he complains publicly, doesn't seem to be doing anything about it. And so the cycle continues with more and more people taking more and more from the "haves" (or perceived as "haves") to give to the "have nots." And like the letter writer hints, religious coercion is used to keep the system in place.

As someone who doesn't have kids yet, but would likely be denied a scholarship when we do, I've already had enough of this grossly unfair system which punishes the hard-working and those who try to advance their careers and raise their salaries. As I indicated on the previous thread, if this charter school gets started I'll have my application ready. I refuse to bust my butt and give up the things we want (living debt free, having my wife stay home with our children if she chooses, saving for retirement and college, having a nicer house, etc) to pay for everyone else's child to go to yeshiva. And I refuse to believe the nonsense that my child will go off the derech and fall off the frumkeit map simply because we refuse to be sheep.

tesyaa said...

Here are the thoughts of someone who is no longer "young" (i.e., we're not a "young couple"), but won't be out of the tuition parsha anytime soon:

Things I might have done differently:

1) Skipped my stint as a stay at home mother. Even though I was unusually fortunate to make my way back into the workplace, I've still lost a lot of years of salary increases, seniority, etc.

2) The result of 1) might have meant having fewer kids, even though we would have more $$ to support them. I found each newborn to be a lot of work, and I don't think I could have managed to have 6 kids while working full time or even part time. This outcome would be really unfortunate.

3) Obviously, saved a lot more, looked more critically at every purchase, etc. This is also a lot of work and not easy to do, especially since we weren't living the high life anyway.

Here are things that will not work:

a) vouchers - give up the fight that you'll never win and use your energy more constructively

b) homeschooling - I have hired rebbes for 2 boys I have in public school. The cost, even for 3-4 sessions per week, comes to about the same as full tuition for EACH. There may be a way to do this cheaper, but not much

So in the long run, the Englewood situation sounds not perfect, but a very decent alternative.

You are right, the community is not ready for change, but change may be coming regardless. There will be a lot of pain for a lot of people.

Thinking said...

SL-

This article nails the issues our schools currently have right on the head. Mismanagement has lead to our current state of affairs. I have said this before and will say it again, there is no reason why $5K per student + 25% of budget raised through fundraising (dinner etc) should not be enough to run a school.
Breakdown per yeshiva elementary school class:
$5K x 25 students = $125K + 25% = $156K revenue.
(Salaries below are actual, I have worked in several yeshivas (both MO and black hat) over the past 10 years)
Rabbi = $60K
Teacher (3 hours) = $25K
Assistant = $10-15k
Salaries = $100K
$56K = Everything else. You need to figure out how to run "everything else" on $56K. Schools need to create budgets based on revenue, not based on costs, that is a simple management principle that many of the yeshiva administrators seem not to know about.
Now that costs have ballooned out of control yshivas are hesitant to do anything because it would involve cost cutting, layoffs (including higher up positions) and cutting services.

The few schools, that I know of, that have employed these management principles have been able to stabilize there financial situations and bring tuition increases under control. In most cases they have brought it external MBA's and CPA's and added them to the staff to help with the turnaround. Fortunately, my children belong to 2 such schools BH!!

JLan said...

Thinking: you miss a few things in your calculation. For example, schools are still required to pay their portion of FICA, most "modern" schools, at least, provide some sort of health benefit, possibly some sort of pension benefit, and often some sort of tuition remission. It's not $56k that's left over, it's much less.

tesyaa said...

JLan, I would be shocked if there were pension benefits, but the tuition remission is probably a big part of the $56K, overall.

Mike S. said...

Thinking: You generally need to bring in something like 3 times the teachers' pay.

You need to cover:

payroll taxes and unemployment insurance (a legal requirement)

some contribution to health insurance and pension ( a moral one, and needed to recruit good staff)

Salaries (and taxes and benefits) for the nonclassroom staff: janitor, secretaries, administrator, nurse (often legally required), bookkeeping and accounting.

Upkeep of the building (and a mortgage if you didn't get the building donated)

heat, electricity, phone and water

insurance (both liability and on the building)

School supplies and books.

Specialists (support for kids with special needs, gym and art teachers if you are going to have them, etc.)

If you want a maximum of 25 kids/class you will probably average somewhere around 20, since the kids won't divide evenly among grades.


There can be some efficiencies realized by making sure the school is big enough to fully use all the overhead items.

You probably need $300K to run the classroom, not $150K. If you raise funds for 20% of the total budget, as you assume, you need tuition income of just under $12K/per student. My kids' school publishes the budget--they collect roughly 2/3 of the nominal tuition on average; at that rate they would need to have a nominal tuition of $18K. In fact, they get more than 20% of the budget from fund raising, and charge around $16K. I can find some expenses they could probably do without (although other parents would disagree with some of my choices, as I would disagree with some of theirs) but there is no way they could get down to anything resembling $5K

Lion of Zion said...

SL:

as opposed to some who would like to see jewish schools become more intergrated:
http://www.nypost.com/seven/01262009/news/regionalnews/10_ny_catholic_high_schools_told_to_go_i_152046.htm

MARK:

"My kids' school publishes the budget"

wow

Thinking said...

Mike S-

As I said, I have worked for a number of schools in the greater NY area.
Most yeshivas:
-Do not have a pension program,
-Pay partial health benefits for a very small portion of the staff,
-Should not have secretaries (maybe 1 at most) I work for a multimillion dollar company with hundreds of employees, we have one receptionist, that's it!)
-Should probably be outsourcing much of their accounting work, janatorial services etc.
-Should have a nurse, books and all other special services paid for by the state.

If the school is publishing their budget, are they publishing just revenue and expenses or all line items included? You would be very surprised if you saw just how much some of the line items cost, especially the ones that can be avoided.

Mike S. said...

Thinking:

1) Whether they outsource the non-educational work or have staff do it, those people have to get paid. Outsourcing is likely to be advantageous only if the school is small enough that they need less than a full time employee for any of these functions. if you aren't sharing the staff with some other customer you are just adding the outsourcing firms's overhead and profit to the cost. If you are outsourcing because the outsourcing firm pays the workers less than you could do with a clear conscience, you are a hypocrite who is abusing your workers.

2) If you don't have secretaries, you are paying someone else to do secretarial work. Most likely at a higher salary. If I proposed laying off my secretaries to save money, my boss would rightly fire me for stupidity; getting my engineers to do the clerical would increase the cost, and likely result in good engineers leaving.

3) If you aren't chipping in for pension and health care I don't think you are treating the staff right. And in my experience it often means you are really negotiating a pension with the staff when they retire, rather than doing something in advance which is much easier and financially advantageous for all concerned. A school that demands the staff make all the sacrifices so the parents don't have to is not one I would want teaching my kids.

4) If the state covers some expenses (they don't where I live) than of course the expense to the parents can be reduced proportionately.

Mike S. said...

I would add that if a school is too small to need a full time bookkeeper or janitor, it should probably merge with some other small school, unless it is the only one in the area.

Mike S. said...

I would add that if a school is too small to need a full time bookkeeper or janitor, it should probably merge with some other small school, unless it is the only one in the area.

tesyaa said...

Every school has excess workers, especially secretaties, whether to give one of the rebbe's wife extra work, to keep an employee who has been there forever, or some such reason. When a new principal took over at one of our schools, she decreed that the secretaries would no longer call home if a kid forgot a lunch. She said it was too disruptive to the office staff. I'm sorry, but isn't that part of the job??

Thinking said...

Mike-

I am not telling you what should be done, I am telling you how it is currently being mishandled.

1) If you are not the expert at it outsource it. I currently outsource 1/3 of my budget. Not because I can't do it or my staff can't do it, it's because someone can do it better for cheaper. There are many things that yeshivas should and could outsource. They don;t because as tesyaa wrote, they want to provide an additional staff member with a salary.

2) Technology: Outlook, Gmail, Voicemail, cel phones, blackberry's etc. have made the role of secretary's extinct. As I wrote before the CEO of my current company with hundreds of staff members has no secretary. Neither do SVP's , the CFO or anyone else. Retraining staff on how to use technology helped my last company (650 ppl) avoid all but 2 executive asst's. Again it is about providing a salary, not a service.

3)The reality is most yeshivas are not providing benefits to most of the staff, so they can't ask for it to be covered in a budget.

4)NY state covers many items like, nurses, social workers, books etc.

I am a firm believer that I should have to pay for what I am getting. The issue is not about cost, it's about transparency into the process and decision making. It's time for a change.

JLan said...

"2) Technology: Outlook, Gmail, Voicemail, cel phones, blackberry's etc. have made the role of secretary's extinct. As I wrote before the CEO of my current company with hundreds of staff members has no secretary. Neither do SVP's , the CFO or anyone else. Retraining staff on how to use technology helped my last company (650 ppl) avoid all but 2 executive asst's. Again it is about providing a salary, not a service."

That's a problematic thing to look at, though, when it comes to a school, which likely has a lot of confidential records. At the very least, filing of IEPs, maintaining organization of Regents information, etc, would be most efficiently done by a secretary. Also, as some have mentioned upthread, there are a number of things for which parents should be contacted which are a poor use of time from either administrators or classroom teachers.

"3)The reality is most yeshivas are not providing benefits to most of the staff, so they can't ask for it to be covered in a budget."

This says more about the lack of other job potential among yeshiva staff than it does about what yeshivas should be doing. I teach in a day school, I get health and pension, and, not coincidentally, I also teach at a school of professional teachers, who could at any time jump ship to public schools.

"4)NY state covers many items like, nurses, social workers, books etc."

We've gone over this before here. NY state does cover those on the books, but most schools don't provide a non-religious space for nurses, social workers, etc. Your hypothetical yeshiva can do so, but be aware that most yeshivas do not have those expenses covered because they do not provide a nonreligious space.

Lion of Zion said...

TESYAA:

"Every school has excess workers . . ."

it's not specifically a school problem, but rather a problem that is endemic to the non-profit world in general (this includes government)

THINKING:

"NY state covers many items like, nurses, social workers, books etc."

the school nurse has been mentioned a few times here and elsewhere. does anyone have more information about this? my wife and i both had school nurses in school and i was shocked to find out that my son's school does not have one. (they claim they can rely on hatzala, which is so ridiculous.) i would like to suggest that they apply for state funding for a nurse, but i need more information first (so they can't shoot it down from the start because of my ignorance about the matter.)

so does anyone know where i can get more information about this?

JLAN:

"We've gone over this before here . . . most schools don't provide a non-religious space for nurses"

i'm not sure what this means. a school nurse has her own office anyway. the school would davka have to go out of its way to make it a *religious* space.

and when my wife and i went to school (flatbush and shulamith) we both had school nurses. i know this was a little while ago, but i'm pretty sure there are still schools with nurses (or are they not publicly funded?).

Lion of Zion said...

i'm not a good google searcher. this is what i came up with on nurses:
http://www.nysun.com/new-york/city-adds-funds-for-catholic-jewish-schools/35680/

Mike S. said...

Thinking:

Regarding the nurse, etc., that is fine if you live in NY State; other states don't do that.

Regarding replacing secretaries with technology, it can be done, but it shifts the secretarial work somewhere else, either to the customer (like voicemail) or to other staff, who are generally paid more. Where I work we have used technology to reduce the number of secretaries some, but at least for us, getting rid of them would be stupid. Sure, my engineers are quite capable of entering purchase reqs., arranging travel, and entering vouchers etc. However, if they are doing these things they are not spending that time doing the engineering they get paid to do; since they both get paid more than the secretaries and prefer engineering to clerical work, my personnel and recruiting costs would both rise if I got rid of the secretaries. I am not as familiar with the office workload at a school, but when I am in the office of my children's schools the secretaries seem to be doing productive work; I would prefer the principal spend his time supervising the instructional staff, not polishing correspondence or doing the filing.

3) Outsourcing some specialized functions can make sense, letting one tap into economies of scale not otherwise available or employ specialized expertise you couldn't keep busy full time. If you are outsourcing the janitor, however, the only way you are saving money is by having the outsourcing firm pay the janitor less than you would, and by enough for the principals of the outsourcing firm to make a handsome living. If you think that is OK, to be frank, I don't wan't you in charge of my kids' education.

My children's school provide benefits to the teachers; I don't think I would like to have my children educated in a place where the teachers were not properly compensated. One school I did send my kids to provided free on-site daycare and tuition to the children of the staff, and so mostly attracted teachers' whose spouses had jobs providing health care. That's OK, and the teachers liked it because they got different benefits instead of duplicate ones, but it still cost the school money.