In more than 20 years of working with business officers in higher education and independent schools, there is one specific skill that truly separates good business officers from great ones – the ability to effectively communicate school finances to a wide variety of constituent groups. This has been confirmed by the recent buzz created by “Open Books: Explaining School Finance” in the March/April 2021 issue of Net Assets and its virtual standing-room-only session during the 2021 NBOA Annual Meeting, “Financial Transparency for Faculty, Staff and Trustees.” Both were delivered by NBOA friend and colleague Ed DiYanni, chief financial officer at Stevenson School in Pebble Beach, California.
Even more recently, communicating financials emerged as one of the top issues raised by business officers in an early review of results from the 2021 NBOA member needs survey that many of you responded to last month.
The importance of this cannot be overstated. To meet your school’s complex financial challenges, including pricing, affordability, access for a diverse student population, and the like, the very best thinking is required.
Added up, this confirms business officers and business office staff seek to communicate financials more effectively as well as to help ensure your faculty and staff colleagues understand them. The importance of this cannot be overstated. To meet your school’s complex financial challenges, including pricing, affordability, access for a diverse student population, and the like, the very best thinking is required. Your colleagues can only help identify solutions if they have a strong grasp of the financial issues your school is wrestling with.
What makes this issue so vexing is that it demands multiple solutions and channels for delivery. Success requires translating financial information for a variety of stakeholders — two of which are critical. The first is likely your schools’ faculty, who may not possess strong business acumen or understand the contributions of various revenue streams or the costliest expenses for independent schools. The second critical constituency are the members of your board of trustees, who are likely very well versed in for-profit accounting and finance but scratch their heads when it comes to nonprofits and a mission-driven organization. However, it is a challenge we must meet head-on.
DiYanni’s success lies in providing context for the financial data, as well as breaking it down into what he calls “finance facts.” There are approximately 25 of these, each customized for a particular audience. DiYanni is also demonstrating the value of financial transparency with each engagement, while helping the entire school community develop a shared understanding of its financial outlook.
Believe it or not, there are many financial myths that are likely embedded in your school culture. These include an impression of the outsized role your endowment, fundraising events or summer programs may have in your school’s financial health, for example.
Believe it or not, there are many financial myths that are likely embedded in your school culture. These include an impression of the outsized role your endowment, fundraising events or summer programs may have in your school’s financial health, for example. Transparency with your internal stakeholders goes a long way to address these myths and create broader and clearer understanding across the school community.
Just last week, as part of NBOA’s Spring Webinar Series, Tom Gorman, chief operating officer, and his colleague Lauren Castagnola, chief of staff, at Westover School in Middlebury, Connecticut, presented insights in a session titled, “Can You Hear Me Now? Strategies for Effectively Communicating School Financial Information.” Tom and Lauren shared their own case study regarding how establishing a solid working relationship between the business and communications offices at Westover enhanced communication and understanding about operational drivers and fiscal priorities among their board, parents, and internal school community.
They are confident other schools can find this same success and offered tips for growing financial and operational transparency:
- Understand your audience: Tailor your message to meet the needs of the constituents.
- Focus on the value of your educational program: Communicate more than just the cost of attendance.
- Transparency is not a dirty word: Be open and honest about your current situation.
- Open the books: Communicate in a clear and direct manner to improve your ability to deliver the intended message.
- Answer important questions: What is the action required? When do folks need to act? Who is the messenger and who is contacted with questions?
- Repetition is your friend: Adapt communication channels to deliver timely information and address the challenges associated with school finances and operations.
- The value of storytelling: Continue to share the stories of your school community – students and alumni, to demonstrate your school’s ROI.
As I’ve said before, for business officers, educating the community about financial matters with clarity and transparency falls under the heading of “good stewardship.” This is not about sharing lengthy financial reports and Excel charts. This is about building a foundation of trust through storytelling and regular communications that educate the entire school community and provide valuable context about core elements of school business matters. Doing so will build broad support for programs and practices, break down silos, generate collaboration and buy-in, and strengthen the importance of your leadership role within your school community.