Making Smart, Mission-Based Decisions to Support School Community
As can be the case with leaders who take the helm at independent schools, Robert McGehee confesses he’s “not a finance guy.” As head of school for St. Nicholas School in Chattanooga, TN, McGehee shares that he does, however, love to listen – a trait that helps identify opportunities to make small adjustments that add up to something big.
St. Nicholas School began as a preschool program within Grace Episcopal Church. The establishment of an Early Learning Center soon expanded to an elementary grades program that experienced steady growth and a strong following from families and alumni for more than 60 years.
When McGehee joined the school as head in 2022, he looked at historical enrollment data and determined this was a healthy school going through some financially tough times. Then, the pandemic hit and enrollment declined further. When McGehee took over the school, he understood the school to have a three-year runway to get its financial house in order and grow enrollment. When he met with the school’s bookkeeper and business manager to discuss the following year’s budget, the school’s bookkeeper made a startling revelation: if the school did not improve its cash flow, it would run out of money by January 2024 – just 11 months away.
Assessing the Situation
With a budget of just under $3 million and a deficit of $740,000, McGehee recognized that prompt action was necessary. After contacting the board of trustees to apprise them of the situation, he then recognized that obtaining a bank loan would be difficult, if not impossible. Taking a glance at the overall finances, there were some obvious places to cut the budget that would make an immediate and significant financial impact: cutting the school garden program staff, cutting half the lead teachers and all of the assistant teachers, and moving students to self-contained classrooms would immediately save the school $475,000.
The cost of these cuts to the school culture and community, however, was too great. By making such drastic reductions, McGehee recognized the school’s mission and culture would be affected, to its own detriment. St. Nicholas School offers a truly individualized, child-specific instruction plan, in keeping with its mission to nurture “each individual’s intellectual, social, and spiritual growth in order to develop independence, a love of learning, and a commitment to service.” By cutting lead and assistant teachers and moving to self-contained classrooms, the school’s unique instructional model would no longer be viable.
The school’s gardening program was also much beloved and was central to the school culture and community, leaving McGehee to explore other opportunities for deficit reduction. Notably, the beautiful 24-acre campus is expensive to maintain (approximately $900,000 per year). And, the school ran a bus route in the nearby Dalton, GA, area that was also an added expense, yet the school did not want to lose a foothold in that market. The reassessment of the situation left McGehee asking, what could be cut instead?
Figuring Out the Finances
By taking another look at the budget, McGehee determined that making several small adjustments would add up significantly to help the budget, saving approximately $140,000.
Other financial tactics the school undertook included
Additionally, a handful of families enrolled through the state’s voucher program. And, post-pandemic, the school’s auxiliary programming has expanded with increased participation.
Getting the Right People in the Right Places
With some immediate financial adjustments in place, McGehee turned to administrative staffing. He welcomed several new employees in key roles, each of whom brought new energy and new ideas to the school.
McGehee shares that the key to getting St. Nicolas School pointed in the right direction has been having the right people in the right “seats on the bus.”
Adding New Programs and Focusing on Community
As St. Nicholas School looked to the future, administrators planned for the expansion of the preschool. The previous head of school had added a PreK3 program and hired a renowned educator who is an expert for that age group. The school has grown the program from five students to more than 20 students, providing a steady pool of students for the elementary grades.
As head of school, McGehee focused on two additional priorities: teacher appreciation and community building. He recognizes that one of the keys to any successful school is its faculty. “Never underestimate the value of a strong faculty,” shares McGehee. “You need to have something worth buying.”
One idea he implemented to show appreciation for teachers is the introduction of three professional learning/work-from-home days per semester. On these days, teachers are required to complete some PD or work, such as grading papers. The rest of the day is offered as mental health time for teacher well-being. The only financial cost to the school is hiring a substitute teacher.
McGehee also focused on sharing the upbeat message that the school is open for business.
Building a Better Board/Head Relationship
The final piece to the financial puzzle for St. Nicholas School was to ensure a strong but appropriate board/head relationship. McGehee was clear in his job interview of the mutual expectations between the board and head. Rather than being “in the weeds,” the St. Nicholas School board of trustees focuses on appropriate governance issues: strategic planning, fiduciary responsibility, and monitoring their one employee – the head of school.
Ultimately, McGehee shares that the school aims to honor its past as is moves into the future. Strong financials and a healthy enrollment are indicators that the school is headed in the right direction. “There are healthy schools that are going through financial troubles,” McGehee says, “and financially stable schools that are very sick.” St. Nicholas School focuses on staying healthy by listening to its constituencies, staying true to the school mission, and being committed to community.
