Improving Salaries!

How can we pay our teachers better and at the same time, make our schools more affordable to  our families? I believe this is the central dilemma facing our schools just about everywhere.

But rather than viewing these as opposing tensions, I believe we can use one to help the other— if we structure our advancement program correctly. 

Here’s how I tried to do that when I was principal of St. Michael in Fairhope, AL:

Whatever our actual total financial aid gifts were each year—after all the dust settled— we listed it as a line item under expense. On the revenue side, we coded tuition as if everyone was paying full freight.

At St. Michael, that aid number was about $600,000, given to 30% of our 350 students.

I also had a line item under income for our annual fund appeal at $250,000. I considered this our "ordinary” philanthropic income and tasked our advancement director to raise this each year.  If we were successful with our annual fund, together with tuition, fees and subsidies, I could offer our teachers modest raises each year. That was our “baseline.” 

But if I wanted to make real headway on salaries—which I believe is THE challenge for our schools—I needed to spend my limited time as school principal on "extraordinary”  philanthropy.  What is the most powerful way to do that? 

I believe it's by asking wealthy Catholic families to give students "the gift of a Catholic education." I have found they're receptive to appeal that if they are convinced the money is going directly to families for this purpose.  

In other words, my aim was to begin to offset the 600K number listed as an expense for financial aid with gifts and scholarships. 

We did that in three ways:

First, we asked older Catholic parishioners to consider becoming  “Guardian Angels” for younger Catholic families, inviting them to “pay the gift of their Catholic education forward.” Every August we would take kids (in uniform) and talk at the end of masses to ask for pledges or a donation to help families. 

The money would go into a “Guardian Angel” fund available for the next year. If parents applied for financial aid, I would give them what I could through the school’s budget. But if they needed more, they went to their pastor, who could then ask me to withdraw GA funds and apply it to their student account. I didn’t spend that money—only the pastors did. 

The pastors appreciated it, because they were able to help their families directly, without tapping into parish money. They were the "good guys," and I was happy with that. It also opened them to us making that appeal each year in their churches. Pastors are rightfully hesitant to see donation dollars leave their parish for other causes! 

Older Catholics responded generously. I didn’t transfer money into a student’s account until I received a thank you from the student  to their anonymous guardian angel, and then I would send that letter to the donor. The donors thus knew their money wasn’t going to an administrative “black hole.” Each year we would receive about 150K in GA donations. When we withdrew money from this account, we would list that "income" in our operations. I never used all of it in a single year, figuring the appeal might become less successful down the line, perhaps with even a long term goal of morphing it into an endowment fund.  When I left the school in 2022, the number had grown to about 300K.  

The second way we offset the financial aid number was through recurring scholarships. For a minimum gift of 25K and a commitment to re-supply the gift to that level each year, we would offer a deserving student a half tuition scholarship named after a loved one (see here: https://stmichaelchs.org/scholarships-to-st-michael). These were roughly 5k each. I would ask the family to restore the fund that by 5K each year, minimum. Or, a family could “endow” a scholarship that paid a 5K scholarship if they made a gift for100K. I placed these gifts in a Catholic foundation account and anticipated a 5% yearly return.

In early May we would host a “scholarship breakfast,” inviting both the donor families, the student and the students’ parents to meet each other. I would say a few words about each scholarship and the person for whom it was named. Hearing those words about a loved one, and meeting the child they were helping in that loved one's name meant a lot to our donors. It also gave the recipient a chance to say thank you face to face!

Finally, we sought legacy gifts aimed at assisting students with financial aid. The largest came from a donor whom I met originally as a Guardian Angel donor. (I wasn't smart enough to understand this when we first started the GA program, but it turned out to give me fantastic “leads” on people who were supportive of our schools,  open to the idea of creating family scholarships and possibly open to a legacy gift.) His gift to us upon his death endowed ten half tuition scholarships each year

Sum total, after six years as a school, we were offsetting the 600k of financial aid with almost 250K of scholarship or GA income each year, which really allowed us to do more for our teachers. Alas, not all of that went to them, as other needs arose. But it helped a great deal!

I don’t presume this “template” works for every school. As the expression goes, “Once you know ONE Catholic school, you know…one Catholic school.” I do think the Guardian Angel appeal could  have traction elsewhere, as the piety of “guardian angels” appeals to an older generation of Catholics, and I believe connects to an altruistic instinct to pass on the gift they have received from their Catholic schooling. 

The fella who endowed the ten scholarships was an older man, in his 80’s, and had difficulty standing. When he called me to his home and told me of his intent to give St. Michael everything he possessed upon his death, I got choked up, and asked him why he was doing that.

I will never forget his response. He rose to his feet, a little wobbly, but with fire in his eyes, and said, “When I went to St. Joseph elementary school, my parents paid the sisters five dollars a month for tuition. When I went to the McGill Institute (high school), they paid the brothers one hundred dollars a year. Those schools changed my life! It’s PAYBACK time!”

In summary: Aim your efforts to raise extraordinary gifts at financial aid. It will give you the best means to pay your teachers more substantially.  

It works!