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Tuesday, September 08, 2009

Let's Take Some Important Notes:
How NOT to run a Business or 501(c)3

Hat Tip: Thinking. Thank you!

The principal of Bais Yaakov of Boro Park allowed himself to be interviewed regarding the potential closure of this very large school. I do believe the school is slated to open, but there is little doubt that whatever emergency funds were collected will only provide a temporary bandaid. I don't think the interview was a good move from a PR standpoint, and I imagine that many of the board members who are in charge of fundraising are tearing their hair out.

I am posting the link because I think there is a lot to take away from the interview. Those of us who serve on shul boards, school boards, mikvah boards, and any other high cost operation's board should read carefully, take note, and be ready to explain to their fellow board members why business as usually simply does NOT make sense. And, of course, when you actually do go to vote, you need to be willing to oppose the majority even if it means that bad looks come your way and you gain a reputation as a naysayer, pessimist, and/or bad guy.

Here are the key lessons. The italicized print in orange are quotes from the article.

1. An organization's job is not to employ people, but to ensure that the organization is a "going concern" so it can continue to serve the needs of the kehillah down the line. "But until this year - even though enrollment went down by some 400 students - we did not reduce any classes, as we thought that smaller classes could mean more individual attention for the children."

2. You can't take care of the needs of the kehillah or the needs of an individuals until you have ensured that your needs are taken care of. "Any menahel who had difficulty with a child would say, 'Please go to Bais Yaakov of Boro Park. Rabbi [E] will find a program for you where you can excel.' This all contributed to the financial crisis we now are in."

3. Staffing costs are the MOST important costs to control. Over staffing spells death to a budget. "Total staff in Bais Yaakov is slightly over 400 [for 2100 students]. The majority are teachers, but you also have professionals, social workers, para-professionals, librarians, and assistant teachers." Note that the staff to student ratio at BYOBP is 1:5.25. This is extremely low. Even when there were 2500 students the ratio was low at 1:6.25. Granted, much of the staff is likely part time, and there is no central administration so the school maintains its own janitorial staff and business office, but I can't get over the low, low ratio, nor can I relate to that ratio given that I never attended a class with less than 20 students growing up.

4. Cash is king and revenue is key. Don't build on promises, nor is it wise to take on additional staff without revenue to cover such staff because letting go of staff is simply a nightmare. "Also, we built a new building, for which we got a lot of pledges from people, but we didn’t get the expected donations from them ." And "We put up a state-of-the-art building in one year, but were then saddled with huge debts."

5. Plan as if the seven bad years are coming (because they always do come). "For the first time we are making some cuts. Some of the programs we have been giving, we can’t give anymore. We’ll have to do some cutting on the computer program. The resource room will be primarily cut out, except for those students subsidized by the government. We are starting to consolidate some classes. Until now we have tried to have smaller classes, trying to provide more individualized attention. We’re going to have to change that, until we get out of this crisis. "


LeahGG said...

1:5.25 is astounding! I wonder what the ratios are for a "prep school" like Frisch.

In my day, there were ~500 students and 72 staff members (just counted in the yearbook) including the school nurses, maintenance staff, administrative staff, etc. 1:7

Thinking said...


I sent you that link.

2 Points:

1) Rule #6. Show a clear understanding of the numbers. "I'm convinced that if we could raise, let's say (let's say?!?!?!), $4 million, we would be able to coast along without bothering anybody for the next 60 years"

2) In a lot of chareidi schools there is a high staff/student ratio as many parents work in the school in lieu of paying any or partial tuition. This is a terrible practice. The excess staff are not critical to the success of the school yet are kept because the school assumes they would not get any tuition anyway.

ProfK said...

The idea of parents working in a school in lieu of tuition is actually a good idea, but they should not be excess staff; they should replace staff that would otherwise get paid. And their "freebie" tuition should be keyed in actual dollars and cents to what their children's tuition would be. If a hired secretary gets, just for arguments sake, $20K a year, and a parent replaces that secretary to work off tuition, but has 5 kids in the school for let's say $40K, the parents would still owe the school $20K in tuition payments. To do it otherwise would be to lose money.

SephardiLady said...

Thinking, I made the correction. Thanks! I agree with your rules also. And $4 mil will likely only save them for this year. Big donors don't like sending their money down black holes. This interview was not flattering.

Anonymous said...

My local paper recently ran a list of faculty to student ratios for about 160 school districts in one-half of the state. The FTE ratios ranged from 1:12.5 to about 1:16.5. I believe, but am not certain, that the faculty numbers included teachers, teaching aids and others who teach students like special ed one on one teachers, but not non-teaching staff like administrators and secretaries. What was interesting was that lower ratios did not mean better academic performance, at least as measured by standardized tests. Instead, big surprise, the better test scores seemed to correlate more with the household income in the district (which might in turn reflect better educated parents, more enrichment at home, and more two parent families).

Anonymous said...

In the interview, the principal says there are 2100 students and about 100 classes, which means class size is about 21 students. That's not so bad. What I don't understand is how you go from 100 classes with presumably 1 teacher per class and maybe an aide for the kindergartners to a staff of 400. Even if some of the teachers and other staff are part-time, the staff numbers seem rather high.

Ateres said...

I do not know anyone at BYOBP so these staff numbers are estimates

There are probably two teachers per class in elementary, one for kodesh and one for secular. For high school there are probably more since there are individual teachers for each core subject (math, English, etc.)and electives (art, computers, PE, etc.).

Therefore, assuming that there are approximately seven parallel classes per grade (100/14 grades, including kindergarten and Pre 1-a), the teaching staff would to be as follows:

Kindergarten and Pre 1-a: 3 teachers per class (one kodesh, one chol, and one assistant) - 21 staff members

First through Eighth grade - Two teachers per class = 112, plus a few elective teachers (gym, art, etc.)

High School - I'm assuming 112 part time teachers accross four grades here to allow the a greater variety of levels and subjects as would be expected for a school that size.

Right now we are up to 245 Employees.

Administrators - A school that size would probably need at least three for high school, three for elementary, and one for preschool - So lets make that seven

Secretaries, etc. - For a school that size, I would guess that there would be five for elementary and five for high school - another ten

Janitorial Staff - Lets say six

Fundraisers - two?

Nurse, Social workers - three

Now we are up to 273. If they have a large special ed. program the 400 number is logical. Otherwise it seems way to high.

However, based on my numbers they could drop about 50 staff members if they could drop two parallel classes by combining them. That certainly seems like something they should do.

LeahGG said...

The diff between public school and Jewish school is that it's reasonable to have about twice as much teaching staff as most of the teaching staff works half a day (although I think this is one of the big probs - the morning Jewish, afternoon secular insistence as opposed to having teachers work all day and having rotation - it's a very easy way to increase teacher salaries and lower the amount that goes towards paying for teachers at the same time - employing fewer teachers at higher salaries is simply a better business decision - because of benefits packages and such)

Jeffrey said...

I have relatives who previously taught at BYOB. They were frum girls who came back from one year of seminary in Israel. The salaries paid to these teachers were pitiful---something like $200 per week (I don't think there were any benefits). I don't either know how much the more senior teachers received. In any case, you can be assured that teachers aren't getting wealthy working there. I'm sure they have too many teachers, but not wealthy teachers.

But please, let's not get smug and say to the yeshiva world that this is what happens when you have a system that doesn't encourage working and takes students into school without any regard of ability to pay. The MO world has its own set of severe problems. It's not so far fetched to expect to see a MO school run into severe financial distress (if it hasn't happened already) because too many parents have lots jobs.

Don't forget: we're in this together.

Anonymous said...

It's ridiculous to have two sets of teaching staff. The classes should rotate so that some get secular in the morning and religious studies in the afternoon and vice versa. That way the teachers teach all day and the faculty size is reduced. Yes, the salaries will go up, but they won't double and the benefit and faculty overhead costs won't double on a per capita basis. Alternatively, the Kodesh teachers should go back to school and get certified to teach math, science, english, american history, etc. so they can teach all day.

Anonymous said...

Jeffrey: It's not about smugness. It's about the fact that some fundamental changes need to be made for long-term survival. No one is being smug or looking for anyone to fail. As far as the "teachers" earning 200/week, I suspect that these young women are largely working with preschoolers or maybe kindergartners or perhaps as aides with slightly older students. It's hard to imagine that they were working as teachers. While these may be very bright young women, at 19 years old with no higher education or specialized training and experience, you can't expect to earn much more than minimum wage.

Jeffrey said...

To Anonymous 3:14

My cousins who were earning $200 per week (no exaggeration here) were girls who came back from one year of seminary is Israel. This practice is commonplace in Boro Park. They really didn't have much else in terms of marketable skills, but still $200 per week is bubkus.
There's no question the BYOB has not made fundamental changes essential to its very existence. But I don't think that most MO schools have done so either. Maybe your average MO school isn't nearly in the level of distress of BYOB. But your average MO grade school isn't going to be around indefinitely if it now charges $15,000 for kindergarden and it keeps raising the tuition on yearly basis.

jewpublic club said...

I am a part time History teacher in a yeshiva, I like your comments and agree with them. Generally it pays to know that not entire Frum community lost its' brains. So what can I add to this post? (I'll try simple street level language to say it like it is.)
One more thing: state-of-the-art mania, that somehow was instilled in our brains. Yeah, like fancy computerized slide show is better than non-computerized. OK lets examine it - students looking at slides generated out of computer and it is somehow better than looking at the same slides generated manually by teachers - get it?
If your brain still says that state of the art equipment will improve student performance, please examine it. The only thing it will improve is - an extra figure in your school costs that parents (WHO ARE DEMANDING THIS NONSENSE!!!) will have to suffer through.
I myself was in this dream until our principal decided that our salaries increase will have to wait as well as our computer and resource room will have to go, than he decided it is not Frum enough for students to watch educational Goyishe videos.
I new had better make History more interesting and creative by... having students using their good old ball pens and pencils, yes we drew maps and battle sights by ourselves. Guess what my students knew more dates and had a better knowledge not only in recent political maps but even ancient and medieval - they had to trace it, then draw by themselves!
I began to describe the events to make them as imaginative as possible, well may be I did not do a perfect job in it, but most students told me that they did like history subject better by the end of the year. The school cut their costs by not spending so much on "art projects", the next year I got the raise without increasing burden on parents or school costs.
And one more thing I understood - some of those machines make our students stupid.
Imagine if we had calculator that told automatic answers to all math problems, would students even know how to use their brain? You decide.

Anonymous said...

Jeffrey: I remain confused why you think this is a yeshivish or chaddidish v. MO issue. No one is saying the MO schools don't also have problems. I am confused why you are so defensive.

As for your cousins, I agree that $200/week is very low (you didn't say if its a full 40 hour week), but even without an education, they could make a lot more if they were willing to work in other jobs. For example cleaning ladies can make 20/hour a nurse's aid at a nurshing home (there always are openings) can make 20K/year with benefits, but however you cut it, their earning power at 19 is limited. But I digress. I don't think schools should make their budgets on the backs of staff and the pay should be commensurate with the education, training and experience that the position requires, tempered by supply and demand. Limiting the non-teaching staff and using as many full-time staff as possible, coupled with larger class sizes and more stringent tuition requirements (i.e. minimum tuitions) may be necessary.

ProfK said...

Anonymous 3:08,
The salaries won't double if teachers work both an afternoon and morning schedule?! I taught such a schedule at a local day school and you had better believe that the salary doubled--what incentive could there possible be to teach the double session otherwise? But then this school used only licenced instructors for the English areas, all with an MA.

It's not benefits for all those BYOB teachers that are breaking the bank--teaching staff gets no benefits, not health, not 403B--nada. Upper level administrators may vote themselves such benefits. If you are talking RW schools (and yes some of the day schools as well) don't count in benefits for teaching staff as an expense for the school as these schools don't provide them. Perhaps the only benefit ever provided, and even that is being cut down and cut out, was offering free/highly reduced tuition for these teachers' kids.

SephardiLady said...

And free tuition is a HUGE benefit.

conservative scifi said...

Just for comparison purposes:

At my local day school (supposedly the largest community day school(i.e., inclusive of reform, conservative and a few orthodox kids), there seem to be about 240 staff total for about 1400 students in grades K-12 (13 total grades). This number includes counselors, administrators, secretaries, security and maybe some other staff.

However, unlike at the Bais Yaakov, the teachers do get benefits, 403(b), paid on time, etc., but they alternate days where the Judaic teacher is first relative to the Secular teacher, so that teachers can work in two different classes (and many, but not all, do so). The tuition has been rising rapidly, now around 20K, supposedly so that teachers could be paid equivalently to the salaries of the local public school, but I do notice that the headmaster gets a salary of around 400K (based upon charity navigator). This year the school lost about 100 students (from 1500 last year), due to the recession and chose to let go of about 20 teachers (but did not appear to reduce the headmaster's salary).

SephardiLady said...

The headmaster likely has a multi-year contract. Personally, from my own experience on financial committees, I really dislike these contracts.

I know of another school that had to pay out a huge amount of money to get rid of a headmaster. Just terrible.

Mike S. said...

Staff numbers are deceiving if they are not expressed as full-time equivalents (FTE). A school with 400 half-time staff members is not overstaffed compared with one that has 250 full-time staff. Just counting up the staff phone book is misleading. Especially if a fair fraction of the staff in the book are parents working a handful of hours a week in return for some tuition reduction.

Since the numbers being thrown around in both the article and comments don't seem to be FTE, they are not very meaningful.

conservative scifi said...

Mike S.,

I think it is even more confusing than that because even comparing FTEs would not give a clear result. If one school contracts out janitorial services and one does not, or security services (or doesn't have security), or other operations, then these positions would not show up as FTEs. (The community day school, according to their 990, contracts both security and maintenance, so these do not show up in the FTE count).

Further, a school that is heavy with low paid aides may have less trouble than a school with slightly less staff, all of whom are highly compensated teachers or counselors.

So I agree with your point, the precise numbers are not meaningful. I do think that it is interesting to look at the 990 to see the budget and number of students on tuition assistance

SephardiLady said...

The notes I've taken on this blog show that most schools of the BYOBP have 3/4's of the student body on some sort of discount. I believe the article stated that there are some students who attend completely free. In our own girls school, I am told there are students that not only attend free, but whose uniforms are provided too.

It is simply untenable. And I know it is considered in bad taste to say this, but the families with lesser means tend to have more children on average.

david dollar said...

SL, I keep reading your blog, and never seem to hear it straight: do you think Orthodox Jews should stop having so many kids? I won't be offended either way (I've got 4 and things are already tight, and I do wonder if we can "afford" more kids - not that we were in a great position to have #3 and #4 either)...but I would like to know where you stand.

SephardiLady said...

david dollar: I don't know. I think above average size families, large, and larger families are important to the kehillah. Not everyone should have a large family and finances is only one reason.

I will think about the question and maybe make it a separate post.

david dollar said...

OK, I hear you. I see many families with many kids - sometimes 5-6, not only the ones with 8-9, who have a tough time because they can't afford and don't get the cleaning help they do truly need (think how much laundry 8 kids make, including a baby who spits up and another who wets the sheets), who are very stressed because they can't afford take-out pizza and a vacation...and they also seem to sometime save money by skipping what might really be essentials, like buying their kids vitamins, taking all the kids to the dentist regularly, etc. The question is, can anyone who is not rich manage on high middle class salaries if they are frum and have so many kids? How? I agree we all need to save more, and work hard at being frugal, but from an economic standpoint, it makes little sense to have more than 3-4 kids...I know many families who are maxing out their resources, not because they are spending too much on silly things, but because they have a lot of kids...many families have as a game plan to spend it all now, then retire on the inheritance from their parents. But then what will the next generation do? It just takes so much money to have kids, a wife can't work full-time year after year while she is pregnant and nursing over and again, it just isn't humanly possible. I don't know any women who work full-time and have babies every year or two for fifteen years running...I look forward to your post, SL.

SephardiLady said...

Glad you are looking forward. I'm a bit intimidated. :)