A Fiscally Responsible Board Member Thinks Like This
Every fall, Catholic school boards open a budget packet, flip to the detail pages, and spend forty minutes debating a $110 line item. Someone wants to understand the jump in paper supply costs. Someone else flags that the copier maintenance contract went up twelve dollars a month. The conversation has the texture of diligence and ends with the board approving the budget and adjourning for the evening, feeling like the work has been done.
Meanwhile, the questions that will determine whether the school can fulfill its mission five years from now may never make it onto the agenda.
This isn’t a criticism of school board members. Detail lines feel concrete and controllable; long-term financial sustainability can feel abstract, even uncomfortable. But a board’s fiduciary responsibility extends beyond approving an annual budget. It includes ensuring the institution has the financial capacity to fulfill its mission over time – to keep the lights on, to attract and retain great teachers, to serve the families who depend on the school, and to be a living witness to the mission of Catholic education.
So, what should your board members be asking?
1. Are we building reserves or depleting them?
The wrong question for a school board member to ask: Did we end the year in the black?
A balanced budget is worth celebrating—but it can also be misleading. A school can produce a zero or positive operating balance year after year while steadily weakening its financial position. How? By drawing down reserves to absorb shortfalls, deferring maintenance, or relying on one-time gifts that won’t recur.
The right question to ask: Are our reserves growing, holding steady, or shrinking—and what does our board-approved target say they should be?
A school can balance its operating budget while weakening financially if it regularly draws down reserves.
School Board Case Study
At one school we worked with, the board had celebrated three consecutive balanced budgets. They felt good about the school’s trajectory. But when we looked at the reserve fund over the same period, it had quietly dropped from 67 days of operating expenses to 19. The school was not in a healthy financial position—it was drawing down its cushion to stay afloat. No one on the board had connected those two data points, because no one had been asked to.
School boards should see multi-year reserve balances and compare them with a board-approved target. Ideally expressed in days of operating expenses. A common benchmark for Catholic schools is 60 to 90 days, though context matters. If you don’t have a reserve target, that’s an important conversation to begin.
2. What does enrollment look like over five years?
The wrong question: How many kids enrolled this fall? Enrollment in any given year can be shaped by a dozen factors—a strong kindergarten class, a family relocation, a local competitor’s closure. A single number tells you almost nothing about trajectory.
The right question: What does the trend look like by grade over five years, and where are students entering and leaving?
One good year can mask a longer-term trend. Review at least five years of enrollment data, broken out by grade.
School Board Case Study
One school had been reporting consistent total enrollment for four years running—right around 280 students. The board was satisfied. But when we pulled the cohort data grade by grade, a different picture emerged: kindergarten and first grade classes were healthy, but seventh and eighth grade had been thinning steadily. Families were enrolling early and leaving before the middle school years. That pattern, uncorrected, would create a structural hole in the school’s upper grades within three to four years—and a meaningful revenue gap to match.
Where students are entering and leaving matters as much as the total. Enrollment isn’t simply an admissions metric; for most Catholic schools, it’s one of the strongest indicators of future financial health.
Board members should review at least five years of grade-by-grade data annually and understand not just how many students are enrolled, but where students are entering the school and where they are leaving. A decline in kindergarten registrations today is a financial signal for every grade above it for the next eight years.
3. How dependent are we on tuition?
The wrong question: Did we hit our fundraising goal?
Annual fund goals are meaningful, but they’re only one piece of a much larger picture. A board that monitors fundraising totals without understanding the full revenue structure may not see the risk hiding in that structure.
The right question: What does our revenue mix look like—and how is it changing?
Board members should understand the balance among tuition, parish or diocesan support, grants, auxiliary revenue, and philanthropy—and how that mix is changing. Heavy reliance on any single revenue source can create vulnerability when circumstances shift.
School Board Case Study
At one school, parish support had been a steady $180,000 annual contribution for years—long enough that it felt permanent. When the parish began its own capital campaign and reduced that subsidy by 40 percent over two years, the school’s budget absorbed a shock it hadn’t planned for. The board had never been shown the percentage of total revenue that subsidy represented—they’d only ever seen the dollar amount in isolation.
Board members should understand the percentage breakdown of revenue sources and track how that mix is changing year over year. A growing share of revenue from a single source—even a reliable one—is worth a conversation before it becomes a vulnerability.
4. What if our board member’s assumptions are wrong?
The wrong question: Is the budget balanced?
A balanced budget is built on assumptions—projected enrollment, expected tuition revenue, anticipated cost increases. When the board approves the budget, it’s really approving a set of assumptions. The question is whether anyone has tested what happens when those assumptions are off.
The right question: What happens if enrollment drops 10 percent? A major donor doesn’t renew? Health insurance costs rise significantly? Financial resilience means considering these scenarios before they happen.
School Board Case Study
We worked with one school that had built a solid budget around the assumption that a longtime major donor would continue her annual $150,000 gift. She had given it every year for eleven years. Then, unexpectedly, she didn’t. The school had no contingency plan, no reserves to absorb the gap, and no time to mount a response before the fiscal year was already underway. The following year was painful.
Boards should review a simple scenario analysis annually – not because catastrophe is likely, but because understanding the school’s exposure to realistic risks allows leadership to make better decisions in advance. It’s far easier to build a contingency reserve when you don’t need it yet than to scramble when you do.
5. Are we compensating staff well enough to keep them?
The wrong question for a board member to ask is: Can we afford a raise this year?
Whether the school can technically budget a raise is a narrow question. The larger question is whether the school’s compensation is competitive enough to attract and keep the people it needs.
The right question: How does our compensation compare with peers, and is our pay structure contributing to difficulty recruiting and retaining strong educators?
Staff turnover carries costs in recruiting, institutional knowledge, school culture, and continuity for students. A school that loses two or three experienced teachers a year to better-paying alternatives is absorbing significant cost while assuming it’s saving money on salaries.
School Board Case Study
At one school, a veteran eighth-grade teacher who had been with the school for nine years accepted a position at a neighboring public school. The salary difference was $14,200 a year. The school’s principal had known the compensation gap was growing but hadn’t surfaced it with the board. Replacing the teacher required months of recruiting and two rounds of interviews, and the substitute who covered the classroom for six weeks during the search cost nearly as much as the raise would have.
Boards should understand how compensation compares with relevant peers and whether salary or benefits are contributing to difficulty recruiting and retaining strong educators. Compensation is a mission issue as much as a financial one.
6. What financial conversation are we postponing?
The wrong question: Can we table this until next year?
Every board has a conversation it keeps finding reasons to defer. Sometimes the issue is genuinely complex. Sometimes the board is waiting for better data. But often, the deferral is simply uncomfortable—the honest conversation about a structural problem that doesn’t have an easy answer.
What board members are postponing may mask the most important financial question they need to answer about a school’s financial situation.
Is tuition materially below the cost of educating a student? Is enrollment unlikely to return to historic levels? Is the staffing model sustainable? Are aging facilities creating obligations the school cannot afford? Is outside support masking an operating model that needs to change?
School Board Case Study
At one school, a leaking gymnasium roof had been on the deferred maintenance list for six years. Each year, the board noted it, set it aside, and moved on—the repair estimate was $320,000, and there was no plan for how to fund it. By the time the roof forced the issue, the cost had risen to $490,000, the school had lost the flexibility to time the project, and emergency procurement meant they paid more than they would have with a planned process. Six years of deferral had cost them approximately $170,000—not counting the financial and reputational stress of a crisis repair.
Avoiding these conversations doesn’t make the challenges disappear. It simply reduces the time and options available to address them.
A board that regularly names the difficult question—even if it takes multiple meetings to work through—is serving its school far better than one that tacitly agrees to look away.
When the Financial Questions Point to Opportunity
The answers to these questions can lead to important conversations about staffing, tuition, programming, facilities, governance, or long-term planning. For Catholic schools, those decisions are always connected to mission and the communities they serve.
Meitler Can Help Board Members Ask Smart Questions
Meitler helps Catholic school leaders and boards understand the data, assess financial sustainability, evaluate options, and build a shared path forward.
Healthy governance means asking the right questions early, giving leaders more time, more options, and greater opportunity to position their schools and missions for a strong future.
We help boards develop the tools and frameworks to do exactly that: reserve policies, scenario analyses, enrollment trend reviews, compensation benchmarking, and facilitated conversations about the questions that are hardest to raise.
Let’s Get Started Helping Your School Board Ask the Right Questions.
