According to data from ATS, there are five different revenue models for independent schools within ATS (70% of ATS seminaries are independent). I find the information provides great context for conversations among leaders of a given institution. Following a description of the data, I will share a few points of interest. Let’s look at the data.
The Five Models
Tuition – The primary source of revenue is tuition.
Endowment – The primary source of revenue is the endowment.
Religious Organization – The primary source of revenue is an associated religious organization or denomination.
Contributions – The primary source of revenue is contributions from givers.
Multiple Sources – No one source of revenue is greater than 40%.
Types of Schools
Each revenue model serves different ecclesial families. However, most models have one ecclesial family that stands out. Here is how that looks.
Tuition – 30% of all schools have this model, and Evangelical schools comprise 45% of those schools.
Endowment – 10% of all schools have this model, and Mainline schools comprise 85% of those schools.
Religious Organization – Less than 5% of all schools have this model. 50% of those are Roman Catholic and 50% are Evangelical.
Contributions – 10% of all schools have this model, and 45% are Evangelical schools.
Multiple Sources – 45% of all schools have this model, and 50% are Mainline schools.
Can We Learn Anything?
For the past five years, I have been pretty involved in peer studies and it has been a great experience. It started by developing a few lists of peers for Northern Seminary. More recently, I have worked with Gary Hoag on a number of different studies related to advancement and enrollment management. Studying peers provides context, helps to develop relationships, and opens the door to many different conversations (both internally and with other schools). One of the greatest rewards of peer studies is learning from others. Different schools do different things well. Very few results are true across an entire set of peers – it is those things that stand out as best practices or areas in which one might want to focus future studies.
Because of this work, I have been asked numerous times if there are certain traits which tend to identify a seminary that is growing in enrollment or one that is stable. The answer is yes and no. Chris Meinzer and I worked together on a presentation for a group of seminary leaders and he pointed out that enrollment growth and decline (as well as other indicators like giving) are happening across all types of schools. Schools are growing and declining regardless of size, type, ecclesial family, age, location, student makeup, etc. In short, there seem to be no traits (specifically, data points) which tend to identify a seminary that is growing in enrollment (or giving, operating margin, etc.). However, one set of schools stands out – those that fall into the “Multiple Sources” category listed above. Schools in that category tend to be more stable and have stronger track records of growth and longevity – which seems to make sense to me.
What about You
Data like this can be helpful in a number of ways. First, it can provide context for conversations you may have at your institution. In addition, it can help you think about your own sources of revenue. It is good to have an intimate understanding of revenue sources because it can help with programming decisions, strategic planning, and much more.
Such data may tempt us to think we should all move toward the “multiple sources” category. Instead, I encourage you to think about the work God is calling your school to accomplish and your strategic objectives derived from that calling. Then consider whether or not your revenue model is in line with those strategic objectives. While it is true that having multiple sources of revenue can be helpful, the key is to first gain a good understanding of your institution’s situation and then to make intentional decisions based on that understanding.
Which of the categories describes your school? Are you similar to or different from your peer schools? Are your revenue streams in line with your institution’s strategic objectives?
(Note about the data: All data comes from ATS. The percentage of schools is from fall 2012. The percentages for the first and second ecclesial families under each revenue model is from fall 2011. The order of schools remained the same in fall 2012 (i.e. Evangelical schools are still the largest single group of tuition schools), but I do not have the most recent percentages from 2012.)