How per unit cost controls, multi-year price planning, and price transparency could drive demand and make Jewish organizations more socioeconomically inclusive
Pasting comment from Michael Slater that was mistakingly placed in the comments of another article:
I work for a Jewish Day School near Boston and also work with Ari. His analytical work has been invaluable and we agree on most things.
There are certainly opportunities for price transparencies and cost economies (through shared service centers supporting the Day Schools) that I embrace and that are coming, probably not fast enough. But in my prior career leading Financial Planning & Analysis groups for several for-profit companies, I learned that cost controls can help, but rarely drive increased value (or in this case, more tuition revenue and students). What matters is increased scale and revenue growth.
I haven't done a deep dive on this, but I don't think that the cost/student in area public schools is that different from the Jewish Day Schools. Boston and NYC's cost per student are also around $30K/year.
For me, the key to growing attendance in Jewish Day Schools is a dramatically lower tuition price. Standards of living have not kept pace. Too many Jewish families who might be interested in a Jewish Day School can not afford it, and the schools with the most sustainable economic models end up clustered around our most affluent communities (where many house-poor parents also struggle with the tuition). This is personal. It's a problem I dealt with myself.
Boston's community goal, to address this moment in our history, should be to double the number of children in Jewish Day Schools. How? By philanthropy, growing political support for school vouchers, etc. The money is actually there, it's a question of priorities and how the money is allocated. But the future of the Jewish community in Boston and the US very much depends upon whether and how these questions are dealt with...quickly.
Hi Michael - I agree with many of your points and think that for day schools their challenges go beyond cost cutting. A few specific responses:
1. I think with for-profit companies cost cutting measures are often used to placate investors to meet their earning expectations or push them company toward a liquidity event (i.e. a sale or going public). The framing is a bit different for non profits in that the 'return' investors are looking for is increased enrollment. With that mindset if cost cuts flow directly into tuition decreases in theory this can help enrollment. You and I both know that tuition cuts are not the silver bullet, but I think would both agree that price matters.
2. Cost per students in public schools is actually substantially lower than JDS. Around here typical non orthodox JDS cost per student easily exceeds $30K/student. Here is a site that lists cost per student by town (https://profiles.doe.mass.edu/statereport/ppx.aspx). Here in Newton, it is $20K/student. Near you in Marblehead it's $17K/student. I'm not saying that's an achievable goal for day school (Newton has 12K students in its system, total JDS in Boston is 2K), but wanted to point out the gap.
3. We probably disagree on the possibility of school vouchers in Massachusetts. I've asked people who are both champions of our day schools and also far closer to Massachusetts politics than I am and no one seems to think vouchers are a remote possibility in the near future.
Great article. I have 3 young kids and between synagogue fees, Hebrew school, aftercare programs, now Jewish private school, it can really start adding up quickly.
Pasting comment from Michael Slater that was mistakingly placed in the comments of another article:
I work for a Jewish Day School near Boston and also work with Ari. His analytical work has been invaluable and we agree on most things.
There are certainly opportunities for price transparencies and cost economies (through shared service centers supporting the Day Schools) that I embrace and that are coming, probably not fast enough. But in my prior career leading Financial Planning & Analysis groups for several for-profit companies, I learned that cost controls can help, but rarely drive increased value (or in this case, more tuition revenue and students). What matters is increased scale and revenue growth.
I haven't done a deep dive on this, but I don't think that the cost/student in area public schools is that different from the Jewish Day Schools. Boston and NYC's cost per student are also around $30K/year.
For me, the key to growing attendance in Jewish Day Schools is a dramatically lower tuition price. Standards of living have not kept pace. Too many Jewish families who might be interested in a Jewish Day School can not afford it, and the schools with the most sustainable economic models end up clustered around our most affluent communities (where many house-poor parents also struggle with the tuition). This is personal. It's a problem I dealt with myself.
Boston's community goal, to address this moment in our history, should be to double the number of children in Jewish Day Schools. How? By philanthropy, growing political support for school vouchers, etc. The money is actually there, it's a question of priorities and how the money is allocated. But the future of the Jewish community in Boston and the US very much depends upon whether and how these questions are dealt with...quickly.
Hi Michael - I agree with many of your points and think that for day schools their challenges go beyond cost cutting. A few specific responses:
1. I think with for-profit companies cost cutting measures are often used to placate investors to meet their earning expectations or push them company toward a liquidity event (i.e. a sale or going public). The framing is a bit different for non profits in that the 'return' investors are looking for is increased enrollment. With that mindset if cost cuts flow directly into tuition decreases in theory this can help enrollment. You and I both know that tuition cuts are not the silver bullet, but I think would both agree that price matters.
2. Cost per students in public schools is actually substantially lower than JDS. Around here typical non orthodox JDS cost per student easily exceeds $30K/student. Here is a site that lists cost per student by town (https://profiles.doe.mass.edu/statereport/ppx.aspx). Here in Newton, it is $20K/student. Near you in Marblehead it's $17K/student. I'm not saying that's an achievable goal for day school (Newton has 12K students in its system, total JDS in Boston is 2K), but wanted to point out the gap.
3. We probably disagree on the possibility of school vouchers in Massachusetts. I've asked people who are both champions of our day schools and also far closer to Massachusetts politics than I am and no one seems to think vouchers are a remote possibility in the near future.
Great article. I have 3 young kids and between synagogue fees, Hebrew school, aftercare programs, now Jewish private school, it can really start adding up quickly.