Independent Schools Must Be Prepared To Respond Strategically To The Current Economic Crisis

David Wolowitz headshot
David Wolowitz
Senior Director, Education Law Group
Published: McLane.com
April 22, 2020

Public health experts have emphasized the difficulty of planning for the reopening of schools in the fall.  In addition to the uncertainty about when it will be safe to do so from a public health standpoint, the state of the economy will likely influence the ability of parents to meet tuition payments at independent schools.  Tuition is likely the most significant discretionary expense for most families.  The more severe the economic downturn, the more likely it is that parents will be under pressure to cut such expenses.

Consequently, the more severe the economic downturn, the more enrollment and revenue may fall, causing great distress—and possible closing—for some schools. For many others, the new economic reality may require significant adjustments to their operations.

No administration can, or should, face this crisis alone. Administrators need all the support they can get.  Boards should join them in addressing this unprecedented crisis. This will require  boards and administrators to work collaboratively.

In crisis situations, board members and administrators should focus on their different roles.  The Board provides oversight of the school while the administration manages the school, implementing strategic directives from the board to carry out the school’s mission and vision. The Board conducts oversight through inquiry, gathering data to review performance and to develop strategies, which are then implemented by the administration.  The Board also has fiduciary obligations, among others, the duty of care, which includes protecting the financial stability of the school. Keeping these distinctions in mind will help to minimize the blurring of roles, which is inevitable to some extent, especially in a crisis.

Crises also require that mechanisms for collaboration. The administration likely already has a crisis response team in place. That team has been focusing on managing the shift to remote learning along with all of the other management issues that have arisen. Managing the school in a crisis is a significant challenge for administrators, in addition to their regular full-time administrative jobs. As a result, it is critical that the Board maintain close contact with the administration during the crisis.

To survive this severe economic downturn, schools must not only maintain the day-to-day operations of the school, but must also develop strategies to address the economic downturn on an urgent basis. This is an area where the Board can provide assistance. It is recommended that the Board form a crisis response team to focus on strategy and long-term planning to maintain the financial viability of the school. The crisis response team should work collaboratively to develop and address key strategies, especially a determination of the steps the school will be required to take in the event of a substantial drop in enrollment.

Finally, to succeed, strategic planning will need to have a clear focus. Surviving this economic crisis will require independent schools to protect the core elements necessary to the successful operation of the school, namely students and employees. Schools need both groups to survive.

Protecting the core will require a combination of effective strategic planning and communications. In this economic downturn, independent schools are at a disadvantage to public schools because of cost, yet have a potential advantage because of their flexibility. Public schools must reopen and operate pursuant to schedules and regulations set by school districts and public authorities.  Independent schools can be more careful and more creative. Parents, of course, want a good education for the children. But, especially now, what parents value the most is keeping their children as safe as possible.

Independent schools can demonstrate their added value by focusing on strategies emphasizing safety. They should therefore work closely with qualified public health experts when planning  reopening strategies. Communicating these strategies to key constituents will also be critical to demonstrating the value of the school. Families and employees will need reassurance that it is safe to return to school. Creative strategic planning and effective communications will be essential in helping to protect your core in this downturn so that your school will survive and thrive in the future when this economic downturn is over.