Scholarships: financial drain or recruitment boost?
School managers need to have their eye on the long-term sustainability of scholarship offerings, writes Lucy Barnwell
Anyone who knows me well will know I never want to give money away just because people ask for it or to reach targets. I believe in fairness and ensuring that scholarships are given for the right reasons because – as I have said on many an occasion – no one wants run their finances into the ground and face closure because they are dishing out such large scholarships.
Scholarships are not a financial drain (although for many discounting all the time is not a good business model) but are a source of recruitment support. However, you have to be careful, because the process should always be seen to be fair and scholarships should be being given to worthy candidates who would really benefit from the educational offering. They should not be there to make up numbers or to get them over the line – that does not show the sales team doing a great job if they have to resort to this. And do not forget, parents talk.
"Scholarships need to support strategic recruitment for the long-term benefit of the school."
Schools are slowly waking up and realising that it’s all very well giving out loads of scholarships to compete and grow numbers, but there is no point giving these out unless you are using them to really enhance your school in the long term and the key areas you want to see grow. They need to be part of a recruitment strategy to ensure that they are not a financial drain but support strategic recruitment for the long-term benefit of the school.
People always say to me that it’s better to have 50 per cent of something than 100 per cent of nothing. But, it’s rarely 50 per cent of something when you add costs for schooling, commission to agents in many cases, VAT and then return VAT on top. It’s all very well bringing in five new pupils with 100 per cent scholarships because they received 9 A*s / 9s at GCSE, but if this means your business studies class becomes oversubscribed and then you have to hire a further member of staff to ensure the pupil experience and deliver on your promises, it’s not so cost effective.
This gives rise to a new debate I have been having with some colleagues in other schools about what we should be reporting on going forward to take account of scholarships and remissions. There are two options: numbers or revenue?
"We have to start to put a price and a value on our amazing products and learn to negotiate a bit."
For years, governors have been focused on the numbers for September and of course, marketing and admissions staff have responded by getting the numbers in through scholarships. This, alongside working hard to diversify through extensive recruitment trips and exhibitions and ever more creative ways to recruit.
Why else do you think you have to offer 50 per cent scholarships to certain pupils in certain countries? Because that is what they are used to. They now want more (well if it was upped to 50 per cent before why not 60 per cent now?). So where will it end for schools who are also businesses (it is just like where agent’s commission is heading). We have to start to put a price and a value on our amazing products and learn to negotiate a bit, whilst being fair and ensure you are focused on your strategic objectives for the school.
So what is the solution? Focus on numbers and revenue. Marketing and admissions staff should be reporting on each pupil’s fee income and then dividing this by the number of pupils recruited to see whether you are meeting that percentage target by showing the actual termly fee income per pupil. Additionally you can use your September target and multiply it by the fee income you want to generate per child (probably split this by day and boarding fees and as a rough average) then multiply this by the target number to get your target revenue.
"Marketing and admissions staff are guardians of our schools' sustainability."
I would also show your governors this split by region as well to see where the weak links are for scholarships and show the governors where the money really is coming from and where to invest more of your marketing budget. Because the numbers may look good, but in the end, staff are paid by fee income, what those numbers bring in.
I am very keen to point out that as marketing and admissions staff we are guardians of our schools sustainability, It’s not just about the targets now, we should be growing our schools with an eye to the long term and sustainability.
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