So what does it cost us to run a small school of 55-65 students with class sizes of 12-16 and a teacher\student ratio of about 1:10?  In 2013-14, it cost Island Pacific School about $16,500 per student to do what we do. We cover these costs as follows:

School Fees                          12,500                    (5% allocated to financial aid)

Ministry Grant                      2,700                    (British Columbia Ministry of Education)

Fund Raising                        1,000                    (Gala Fund Raiser; Golf Tournament, etc.)

Other Grants                              300                   (Special Education Support, etc.)

Total (Per Capita)                16,500

The first thing you should know is that it took us eighteen years to get our school fees up to a level that will allow us to pay teachers a reasonable salary and to ensure that the school will be sustainable.

We started the school in 1995 more as an affair of the heart than as a viable financial venture.  Our initial fees were $3750 and we paid ourselves next to nothing.

While I do not regret for a moment having started on such thin ice,  (indeed I doubt we could have started otherwise), I have come to understand that a school needs to get its financial fundamentals right in order to deliver on what it professes to do and, most importantly, in order to have a chance to continue delivering well into the future.

While it might have been defensible to charge low fees at the very beginning to get the project up and running, that justification evaporates fairly quickly. Families who commit themselves to schools do so for one-year increments at least and, more likely, because they want and expect a school to cover a significant chapter of their child’s educational lives.

I remember hearing of an independent school in British Columbia that shut down during Spring Break. This struck me as a monumental betrayal to the families. While there may have been “good financial reasons” for pulling the plug when they did, I see instead gross financial irresponsibility at having arrived at a place where such a decision had to be made at such a time. What I have come to realize, sometimes painfully, is that school fees need to be set at a level that will not put undue pressure on other revenue streams (e.g. fund raising) and that will ensure the long-term viability of the school.

When we accept fees from a family now, we commit to being able to offer the program for the year, to be sure, but we also implicitly commit to manage our financial affairs so as to enable that family to participate in the full four-year program.  This requires, among other things, building up a reserve fund to get the school through periods of fluctuating enrolments.

One of the key “financial fundamentals” that IPS has maintained right from the beginning, by the way, has been a built-in bursary or financial aid program.  What I mean by this is that we have historically allocated anywhere from 5-10% of our tuition fee revenue into bursaries. If we have $650,000 of student fees, in other words, then anywhere from $32,500-$65,000 will be earmarked for financial aid. This has been a philosophical cornerstone of the school ever since it started, i.e. that there be some mechanism to ensure the broadest possible access to the school.  Our maximum bursary is 50% of the tuition fees, with partial bursaries also paid out.

A second piece of the structure that we have just recently added is a staff grid. This is a pay scale that increases by a definable amount every year. While it is true that we can never pay our teachers enough—i.e. in relation to the significant contribution they make to the lives of our students—we nonetheless wanted to introduce this measure as a symbolic recognition, at least, of our teachers’ central importance to the work of the school, and as a mechanism of financial predictability.  The only sustainable way to fund these planned increases, (and cost of living increases), is through graduated tuition fee increases.  Our practice, over the recent past, has been to increase our fees by $500\year (or $42\month). The current model assumes that this will continue.

What is remarkable, and perhaps instructive, about the IPS financial situation is that, after many years and lots of fine-tuning, we have finally arrived at a financial model that is sustainable for small class sizes and a small school.  While the accepted wisdom is that small schools can’t work financially because, well, they are too small, we are showing that this need not necessarily be the case. Like all independent schools, we will continue to have our challenges: we need to raise about $60,000\year through fund-raising, grants and donations, and we need to ensure that we enroll between 55-65 students every year at the school. But these are manageable challenges in the context of what we actually offer our students: an intimate, small-school education that is transformative in its effect. Small is not only beautiful, as E.F. Schumacher once claimed, it is also financially manageable.

Perhaps the time has come to rethink school math.