A founding business officer of NBOA with 51 years of experience, Jim Pugh shares wisdom he has collected in his decades of service to independent schools. This is the 12th and final article in the Business Office Basics series. The series thus far includes: entry interviews when you start at a new school; trustee orientation in terms of school finance; financial reporting strategies; department budget request forms; preparing the operating budget for the board; achieving financial equilibrium; the annual capital budget; the investment committee report; the audit (part I and part II); using a long-range financial model.
Information will not help an organization unless it is communicated effectively. A dashboard, that is, a select collection of key data graphics and visualizations, can serve a school well.
These two Excel files are updated versions of The Trustee Dashboard – Day Schools and The Trustee Dashboard – Boarding Schools, which I created 12 years ago. These have been used by hundreds of schools over the years. (See sidebar at the end of this article for the full story of their development).
The topics include: budget & capital, operating cash, admissions, enrollment, endowment, reserves & debt, student attrition, tuition and fees, financial aid, faculty, staffing, and the board. The workbooks include Excel tips for modifying data tables and charts. They also include instructions to update the dashboard for a new school year.
These two files are not intended to be “plug and play.” They offer a wide sample of charts that show the visual display of quantitative information. By no means do they exhaust all of the possible charts that can be presented to the board. There could be more charts about facilities, for example. My two favorite charts are those for operating cash and student attrition because each tells an important but rarely reported story, and in a surprisingly simple way.
These Excel files can be a resource for the school that does not currently provide an annual dashboard to its board, as well as for a school whose leaders wish to review the board’s current dashboard. The charts can facilitate a discussion with the finance committee about the creation of a dashboard that meets the trustees’ expectations. Some of the charts may be used to support a specific committee. The advancement committee, for example, may benefit from a number of charts in the fundraising section.
These dashboard files are designed with the following purposes in mind:
- Trends are important. These dashboards look at five prior fiscal years, plus the current school year.
- The Board can receive too much information. Pages filled with rows of numbers are fine for the trustee with the time and inclination to drill down into the data. Information should also be presented clearly and succinctly.
- Information presented visually is especially effective. Numbers communicate with, at best, half of the trustees. Simple charts communicate with everyone.
- Consistency is important. Definitions and organization of data should stay consistent from meeting to meeting and, ideally, from year to year.
- The dashboard, in its entirety, should be presented at least once each year. This is usually in September. Some topics, such as operating budget and cashflow, should be reported at each Board meeting.
These dashboards were created with input from trustees at 15 schools, who I interviewed in 2011. In the course of these interviews, several of trustees described the purpose for which their board would use a dashboard. The reasons included:
- To ensure that board members are informed about, and with repeated viewing, understand the key numbers.
- To provide all trustees with the same base of information, and get them on the same page.
- To inform them about changes since the last meeting.
- To reminds trustees what they knew at the end of the prior board meeting – so they don’t have to take up meeting time becoming reacquainted with the school’s structure and issues. One of the interviewed trustees put it bluntly: “I want them to remember what school they are at today.”
The Trustee Dashboard is copyrighted by the National Association of Independent Schools. It is used in this article with the kind permission of NAIS.
Thus the Series Concludes
This the 12th and final article in the “Business Office Basics” series published over the last fiscal year. I hope people in the independent school world have found some of the articles to be useful.
If I were to choose a “most important topic” from among this series of articles, it would be the one on financial equilibrium. This is such a key concept which underpins all of the work of an independent school business officer. Yet different topics may speak more powerfully to other business officers at different stages of their careers. (See related content below for links to all the articles in the series.) I hope this series will inspire other veterans to share their best practices and ideas.
Many thanks go to Robert Sedivy, retired CFO of Collegiate School in Virginia, who reviewed each article in draft stage and suggested good ideas and clearer language. His advice has improved them considerably. I would also like to thank NBOA and Cecily Garber, the associate vice president of communications and member relations of NBOA, for running this series in Net Assets NOW. Cecily has provided superior editing skills for improving each of the articles. My thanks also go to NAIS, which first suggested The Trustee Dashboard and which uses some of the dashboard graphics in DASL.
Finally, I would like to thank the teachers, staff members, CFOs, heads of school, trustees and business partners of independent schools I have worked with over the decades. Some of you are retired, and some are still active in the industry. All of you have generously shared your ideas, opinions and best practices, many of which are reflected in this series of “Business Office Basics.”