Day Schools Saving Millions In New Efficiency Effort

Scholarship coffers could increase as a result of ‘benchmarking,’ but tuition cuts not expected.

01/10/12
Associate Editor
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In response to a crisis of affordability sweeping through the day school world, a new effort to have schools practice greater efficiency has resulted in savings of tens of millions of dollars for nearly 40 Jewish day schools across the nation.

But while the new “benchmarking” process spearheaded by Yeshiva University’s Institute for University-School Partnership is expected to free up funds for scholarships, don’t expect to see dramatic drops in tuition itself.

Rather, the “foundational” goal of benchmarking, according to Harry Bloom, the YU School Partnership’s director of planning and performance improvement, is not tuition reduction per se, but “making schools sustainable while delivering quality education” and making day schools “accessible to the entire Jewish community, including to the middle income families who often are hard pressed and not always well served by current financial aid processes.”

While common in the corporate world, benchmarking — a process in which institutions measure their performance against that of their peers, in order to identify cost-saving and revenue-enhancing opportunities — is a new arrival in the Jewish day school world, whose myriad financial challenges include a “tuition crisis.”

Eight Bergen County schools have gone through a round of benchmarking under the guidance of YU, and according to Samuel Moed, chairman of Jewish Education for Generations in Northern New Jersey, the process has already saved a combined $2.5 million.

Currently working with 30 additional schools (Orthodox, Conservative and pluralistic) in Philadelphia, Baltimore, Chicago and Cleveland. The YU School Partnership and the Avi Chai Foundation, the project’s lead funder, hope ultimately to bring benchmarking to at least 200 day schools in 30 communities, including ones in New York City and its suburbs.

Bloom estimates that benchmarking and the strategic planning that follows is on track to achieve combined savings of at least $22.5 million — approximately 10 percent of operating budgets — over three years in the five communities in which it is being implemented so far.

Proponents say the process not only helps schools operate more efficiently and sustainably — making more money available for scholarships and educational improvements — but also encourages collaboration among schools that once largely saw each other as competitors.

For skeptics, however, it’s too little, too late for a field facing major financial challenges, akin to rearranging deck chairs on the Titanic.

Indeed, the emergence this year of three brand-new, low-tuition Jewish day schools and a growing willingness among day school families to explore public schools and Hebrew charter schools, indicates a demand for more dramatic solutions.

Gershon Distenfeld, who is on the board of JEFG, recently wrote in the New Jersey Jewish Standard that while he continues to see benchmarking and fundraising as critical, “at the same time, I’ve become convinced that we must take bold steps now to alleviate the tremendous financial burden placed on the overwhelming majority of day school families.”

Explaining his decision to help launch the new low-tuition Yeshivat He’Atid, Distenfeld wrote, “Incremental changes are important and can lead to transformation over time, but the clock is ticking and it is time for a major initiative that will transform day-school education, while setting it on a sustainable path for future generations.”

Bloom and other benchmarking proponents are quick to acknowledge that the process is hardly a “magic bullet” for the enormous challenges to day schools’ fiscal sustainability, chief among them the “explosive nature of demand for financial aid.”

In the executive summary of a report recently issued about its findings from the effort so far, Bloom noted that benchmarking “is certainly not the total solution” and must be combined with “longer term solutions” like “endowment building, communal middle-income tuition subvention programs and increased government support for day schools.”

While not the full solution, benchmarking — combined with consultants the YU School Partnership provides (the Avi Chai Foundation pays half the consulting expenses, and the local community pays the other half) to help the schools plan and implement changes — is a “valid starting point because it develops hard data about where opportunities are for schools and the community at large,” Bloom said.

How does it work?

Schools provide the YU School Partnership with a wide array of financial and statistical data — spanning tuition, scholarship details, staff compensation, maintenance and capital expenses, enrollment numbers, faculty-student ratios and fundraising revenues. The YU School Partnership analyzes the data from all participating schools in the community then, while keeping the findings confidential, develops a report for each school detailing how it stacks up against the communal average.

One major difference across the schools that was revealed through the benchmarking, Bloom said, has been in how schools define job responsibilities and determine appropriate compensation for their employees.

“You’d be surprised to look across schools that there are significant differences of 15, 20 percent or more, even within one community, even within one denomination of what a full-time employee is,” Bloom said. “And that difference can make a major difference in terms of productivity. We can now say to a school, you’re paying this much for this equivalent unit of work and that compares to your peer paying another amount for an equivalent unit.”

A number of schools are now exploring “distributed leadership” — having veteran teachers assume some administrative roles, which provides “an efficiency” for the school and also “makes those teachers’ jobs more interesting and fulfilling.”

Another area where school spending differs dramatically: purchased goods, services and maintenance.

“Even among schools that share the same geography, same size, same educational philosophy, those differences could be as much as $1,500 per student,” Bloom said. “The surprise was how big those differences were and how receptive schools were to act on that information.”

Bloom’s report, based on work so far with almost 40 schools of various denominations and sizes, identifies the largest areas where benchmarking has exposed opportunities for saving money or increasing revenues. In order of magnitude, they include: filling classes to capacity; improving annual fundraising performance; “more effective utilization and supervision of teaching assistants, professional development and incorporation of online learning” to reduce faculty and staffing expenses; ensuring that tuition is aligned to expenses and ability of subgroups to pay; opportunities to outsource or automate non-education-related tasks; facility rental, summer camp and after-school programs operation, foundation grants and endowments; energy conservation and joint purchasing savings; encouraging senior teachers to accept administrative tasks.

After sharing the benchmarking analysis with a school, the YU School Partnership provides it with consultants who help plan, implement and evaluate changes as a result.

“For a school, it’s a scary prospect to change their ways, and when we can bring in real expertise, that gives them the confidence to create a game plan,” Bloom said.

One thing that has not yet changed much as a result of benchmarking, however, is tuition.

Yavneh Academy, a benchmarking participant in Paramus, N.J., recently decreased tuition by $100 — a small percentage of the more than $14,000 that full-paying students spend each year in tuition and fees, but a symbolic reversal for a school that is believed to have never before lowered tuition. However, when asked if any other schools have lowered fees as a result of benchmarking, Bloom emphasized that tuition reduction, while “valid in some cases” is “not an end goal.”

“In some cases across-the-board tuition reduction subtracts valuable resources from those who can afford to pay and thereby can undermine the goals of sustainability,  quality and accessibility,” he said.

So far, schools have made a variety of changes as a result of benchmarking. Inspired by the opportunities in outsourcing services and buying collaboratively, Bergen County’s JEFG and the local Jewish federation recently hosted a conference to explore ways all local Jewish organizations — not just the day schools — can hire and purchase together to bring down collective expenses.

For Yavneh, benchmarking has spurred a closer look at class sizes and encouraged the school to step up the responsibilities and training for its assistant teachers, Rabbi Jonathan Knapp, the principal, told The Jewish Week. The school is also exploring “technology initiatives” that allow it to “simultaneously enhance education while reducing overhead costs,” he said.

In addition to focusing on areas for savings, benchmarking highlights opportunities for increasing revenues, particularly through improved fundraising efforts.

“One school had been relying on its annual dinner for fundraising,” Bloom said. “We said, here’s how your fundraising is performing compared to your peers, so they set up a giving society and within a few months had made 16-18 asks for $12,000 from people they’d never approached in this manner before and got almost 100 percent acceptances.”

Benchmarking gave Yavneh the “momentum” to revamp and increase fundraising, Rabbi Knapp said.

“While we’re still hosting a few very significant and successful events, our focus has shifted and become more annual campaign-focused,” he said.

Mark Neustadt, the vice chair of the board of Krieger Schechter Day School, a Conservative k-8 school in Baltimore that — along with eight other Baltimore day schools — has been participating in the benchmarking process for six months, said he was initially wary of the amount of time it would require.

But he has been won over.

“I find it enormously valuable,” he said, adding that it is particularly helpful to get “clear data about what schools in your own market are doing.”

While it is “too early” for “concrete results,” Neustadt said his school is exploring improvements in the areas of spending on support functions, such as back-office/administrative work and building maintenance; salary structures and student recruitment, particularly critical since enrollment has dropped dramatically in recent years, from 450 to 350 students.

“Once we started working with these guys and figured out how we can make use of them I’m a huge fan,” Neustadt said. “They’re really good at meeting us where we are and providing information that’s relevant to our situation.” 

Last Update:

01/11/2012 - 12:19

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