Building a Breakthrough Financial Plan October 3, 2013

1. Building a Breakthrough Financial Plan October 3, 2013

2. Introductions – NGLC Dalia Hochman EDUCAUSE Director of K – 12 Development and Adoption Kristen Vogt EDUCAUSE Knowledge Management Officer, NGLC EDUCAUSE is a nonprofit association whose mission is to advance higher education by promoting the intelligent use of information technology. Next Generation Learning Challenges (NGLC) accelerates educational innovation through applied technology to dramatically improve college readiness and completion in the United States. Wave IV Key Dates: Dec 2 Initial launch applications due Jan 21 Finalist proposals due

3. Introductions – Afton Partners Scott MilamCo-Founder & Managing Director Rosalyn SavarimuthuSenior Associate Stuart Gay Director

4. Personalization – attendees and challenges What keeps you up at night • Lack of funding • Remaining fiscally solvent and responsible • Facilities & space constraints • Recruiting • Staff – preparing them for blended learning and compensating competitively • Not being prepared for the unexpected • Transitioning from planning to implementation 59% are new schools, 21% conversion, 21% grade expansion of existing school 50% have created a financial plan 50% have created a grant budget 67% understand planning expenses the least

5. Our Agenda Key components of a financial plan Prototype key inputs for your own implementation plan iterate Objectives Process to translate design to financial template How to avoid common challenges and pitfalls

6. Materials This webinar link File 1: “Financial plan” Excel file for prototyping File 2: “Sample school data”

7. Process • Two files are open on your computer • Presenting material through Adobe Connect • Black slide • We are transitioning to build the prototype • You can • follow along with the sample data provided • add your school’s information as you go An effective process and approach to translate design to financial template

9. Pre-read review: What is a financial plan for a breakthrough school?

10. Single school site, multi-year plan Researched school design assumptions Iterative process Multiple elements and departments

11. Single school site, multi-year plan Well-researched financial and operating assumptions Iterative process Multiple elements and departments

12. Single school site, multi-year plan Researched school design assumptions Considering everything needed to open, operate, and successfully run a blended school Iterative process

13. Single school site, multi-year plan Researched school design assumptions Considering everything needed to open, operate, and successfully run a blended school Iterative process

14. Pre-read review: Why is the financial plan important?

15. Blueprint for implementation Guides financial reporting / compliance requirements Assess sustainability and scalability of your school design

16. Blueprint for implementation Financial reporting / compliance requirements Assess sustainability and scalability of your school design

17. Blueprint for implementation Guides financial reporting / compliance requirements Assess sustainability and scalability of your school design

18. Sample School: Translating your design into a financial action plan • Provide an overview of each major component of a school financial plan (e.g. revenue) • “Drill down” into a critical component of the financial plan (e.g. recurring state and local funding) • Review a process to challenge and validate projections (how do you know?) • Populate that item in the prototype based on a sample school (including assumptions for the school)

19. Key components of a sound financial plan enrollment revenues expenses One-time and recurring Over a multi-year period

20. Overview enrollment revenues expenses Common Challenges Over-projecting your start-up year Full consideration of class retention in future years Recruitment strategy and community outreach One-time and recurring Over a multi-year period

21. Drill down Demographics

22. Validation Process How many?

23. Validation Process How do you know?

24. Validation Process Comprehensive research Outreach and recruiting

26. Overview enrollment expenses revenues One-time and recurring Over a multi-year period

27. Non-recurring • Public funding • State and local grants • Federal grants • Facilities funding • Non-public funding • Foundation grants • Fundraising Common Challenges Grant cycle status – application, approval or funded Compliance requirements are underestimated Fundraising goals are not fundraising plans

28. Most revenue sources are tied to enrollment

29. Drill down Recurring • Public revenue • Local • State • Federal (including Title funding) • Will there be any other recurring funding? Common Challenges Funding that is different from other schools in your district Assuming that non-recurring are really recurring Over-estimating federal funds, e.g., Title I, IDEA

30. Validation Process How will your school be funded in your state / district?

31. Validation Process How do you know?

32. Validation Process Year 1 Comparable schools in your district

33. Validation Process Years 2 – 5 Historical growth rates Future outlook on revenues

35. Overview enrollment revenues expenses One-time and recurring Over a multi-year period

36. What investments are required for your school’s breakthrough design? Overview

37. Overview Staff Information Technology Facilities Other Costs & Support Expenses Professional Development

38. Drill down • Full-time Instructional • Full-time Administrative • Part-time / Itinerant • Salary & Benefits Staff Information Technology Other Costs & Support Facilities Professional Development Common Challenges Under-estimating salaries and/or benefits Reasonable growth and scale considerations Long-term considerations for your support model, factoring in growth

39. Validation Process Who do you need to hire? When do you need to hire?

40. Validation Process How do you know?

41. Validation Process Planning Year (Year 0) What resources do you need to prepare for the launch of your school? What positions? How much will that cost?

42. Validation Process Years 1 – 5 How does your staff align with enrollment growth and your school design? What resources are required for a blended learning model?

44. Drill down • Digital curricula • HLMS • Devices • Units • Cost per unit • Support • Inventory / replacement rate / refresh rate Staff Information Technology Other Costs & Support Facilities Professional Development Common Challenges Lack of IT strategy Lack of well-communicated IT strategy Minimal IT investment

45. Validation Process What do you need to implement your IT strategy?

46. Validation Process How do you know?

47. Validation Process Planning Year (Year 0) How will you implement your IT strategy? How much will it cost?

48. Validation Process Years 1 – 5 What worked in Year 1, and how can that be scaled? What are your recurring IT costs in Years 2 – 5?

50. Drill down Where will your school be? Lease or Buy? How much will it cost? What’s a reasonable assumption? Common Challenges Materially low cost vs. market Consideration of maintenance, custodial, utilities, etc. Space utilization