Say “Goodbye” to Discounts

Raise your hand if you give 2nd and 3rd child discounts, family discounts, or for Catholic schools, discounted rates for Catholic students, or, for Christian schools, discounts for families that are members of supporting congregations.

That’s what I thought – that’s most of you.

Stop it.

How many of your believe that life is precious and should always be protected? That’s good. While the law may not support that belief, we believe that it’s right and just. In the same way, discounts hurt your school in three ways: it’s discriminatory, it devalues your school, and it robs you of necessary income.

The last of those is an easy thing to grasp – since you’re collecting less money for each successive student.

If you have Catholic & Non-Catholic tuition rates, that’s discrimination, and it’s wrong. This is where everyone will say, “Yes, but the parishioners support the school by their contributions.” If that’s the case, then you’re subsidizing your tuition, which will, in time, spell death for your school. Don’t believe that? Then why have schools been closing? It used to be that 100 children was the “magic number.” If enrollment dropped below that number, the school was on dangerous ground. Today, schools with 150-200 students are closing because subsidized tuitions cannot support the expenses of the school.

Now – think of the word, “discount,” and the last thing you purchased at a discount. Perhaps it was a vehicle. Maybe it was at a discount store. It might not have been the thing you really wanted, but it would serve the purpose you needed it for. Then again, you couldn’t believe the deal you received, and were anxious to tell your friends about it.

Now apply this mentality to your school. Is your school’s education worth less that the other schools in your area? Do you want parents to spread the word about the “great deal” they got and the low tuition they’re paying? Is your school’s educational environment so “average” that no one wants to pay full price for it?

If the answer to those questions is “NO!” then stop discounting – NOW!

If your school provides a quality faith-based education, with demonstrable academic excellence, a safe and caring community, and an authentic focus on faith identity infused within the curriculum, then why are you “discounting” the experience?

Instead, use the word “incentive.” The effect is the same, but the mentality is completely different. Discounts get rid of old stock, inferior product, or material the provider doesn’t want anymore. Incentives encourage customers to try the product, or use more a service. People like incentives – they get more for their money. If you have two children, then the first pays full price, and as an incentive, the second child is enrolled at 80% tuition.

The parent pays the same amount as they would with a 20% discount for the second student, but the mindset is a positive one.

“Discount” cheapens the best educational environment for today’s children. Parents want discounts, but, as we all know (to quote those modern day philosophers, The Rolling Stones): “You can’t always get what you want. But if you try sometimes, you just might find you get what you need.”

And that’s where “Need-Based Aid” comes in. If you’re still using a pool of funds to “subsidize” the cost of education at your school, turn that pool of funds into one that provides need-based aid. Here’s why.

If the cost of educating each student at your school (total expenses divided by number of students) is, say, $5,000, yet your tuition for each student is $2,500, that means that tuition is subsidized by $2,500 by some entity (usually the parish in the case of a Catholic school). If there are 300 students in the school, that’s $750,000.

Now consider this – if the parish contributes that amount to the school, $750,000 divided by 52 weeks equals $14,423 per week. There are many parishes that don’t bring in that amount in the weekly Sunday offering.

But let’s say that it does, and can afford to support the school at this level. Are there families in the school that can afford to pay the full $5,000 of tuition? Are there families that cannot afford the $2,500 the school is currently charging for tuition? If you answered “yes” to both questions, then subsidizing your tuition is giving a “discount” to families that don’t need it, while still pricing your tuition out of reach of those who may desire the educational environment your school provides for their children.

Is this “fair” to those who will be charged the full cost of education? Let’s see what Scripture says:

Our desire is not that others might be relieved while you are hard pressed, but that there may be equality. At the present time, your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality, as it is written: “He who gathered much did not have too much, and he who gathered little did not have too little.” 2 Corinthians 8:13-15

If you’re the leader of a Catholic school and would like more details on how you can implement such a program at your school (hint: it’s all about communication and developing a great case statement), come visit the FACTS booth at NCEA in Pittsburgh April 22 through 24th.  I look forward to seeing you there!

© Michael V. Ziemski, SchoolAdvancement, 2009-2014 (Original Publication Date: 20090406)