Starting a Lutheran School

Making the decision to open a Lutheran school ministry is a big step, one that has the potential to transform your ministry.  It’s not a decision to be made lightly, and one that takes much thought and planning.  That said, this is an endeavor well worth the effort, for school ministry gives a ministry a way to directly touch and transform lives of both your own children as well as children and families from throughout your community, including many who may have no other way that the Gospel is reaching them.  There are many questions to be answered in exploring this undertaking.  The following information is offered as a guide to assist in the process.  While this will not cover every aspect of opening a school, it is an effort to cover those matters that are of the greatest importance.  You are encouraged to review this information, and then add items as you become aware of them.  Please remember that you are always welcome to contact the CNH District Office any time that we might be helpful.  God’s blessings to you as you undertake this important task.

Initial Questions

There are strong reasons for opening a Lutheran School, whether a preschool, full day childcare, elementary school, or a combination of these options. You likely already understand at least some of the reasons.  Lutheran Schools:

  • Are driven by a commitment to the Gospel, focused on a mission of bringing hope and healing to students and families.

  • Have educators who model visionary leadership.  They practice stewardship of resources, build up others, and empathize with those they serve.

  • Have educators who model servant leadership.  They engage children and families in service to the school, the church, the local community, and the global community.

  • Have educators who model spiritual leadership. They study God’s Word, share their personal faith story, apply Law and Gospel appropriately, exhibit a passion for ministry, care for others, demonstrate integrity, and pray without ceasing.

  • Meet or exceed state and national academic standards at all grade levels.

  • Are governed by board members who understand their roles and focus on vision and board policies that effectively govern the operation of the school.

  • Shape the whole child - mind, body, and soul - through a well-rounded program that supports students in mastering core academics while exposing them to the fine arts and extracurricular activities, all in an environment where our faith is fully integrated.

Why wouldn’t every church want to operate a Lutheran School?  Wanting, and being successful, are two different things.  Will your congregation be able to open and operate a viable and sustainable Lutheran School?  Start by answering these four critical, essential questions:

1. Is there room for a Lutheran School in your congregation and community?

A) Do you have families with young children in your congregation who would likely choose to enroll in your Lutheran School if that option existed?

B) Is there space for a Lutheran School in your community?  There may be other Christian and private schools, but are they serving the same niche you would serve?  Most Lutheran Schools provide a Christian environment where all families may feel welcome, whether they belong to your church, another Christian church, or no church at all, so long as they are open to the message of God’s love and salvation through Christ that your school will share.

2. What is the potential for a successful and sustainable school?

A) Do you have the physical space to support a school, both in classrooms and multipurpose space as well as outside recreational space?

B) Do you have the financial resources, either saved or amongst willing supporters, to make needed facility changes and/or additions?  If not, do you have a way to acquire such funds (i.e. ability to borrow)?

C) Will you be able to gather the financial support to bring in school staff, school curriculum and supplies, and the various other items that will be needed, knowing that tuition and fees will cover operational costs eventually, but not initially?

D) Are there enough interested parents and students in your congregation and community to move a school from startup to sustainability?  Lutheran Church Extension Fund offers an excellent tool, Mission Insite, that can provide you with demographic data on your community.  Contact Edward Kwak, LCEF District Vice President for the CNH District, for more information on this Edward.Kwak@lcef.org).

3. Will there be commitment towards school ministry?

A) Is your pastor supportive, eager to maximize discipling and outreach opportunities your school will create?

B) Is church leadership committed to providing time and resources toward starting and operating a school?  Direct congregational funding will initially be necessary.  A successful school ministry will move away from reliance on direct congregational funding for operational costs, but that takes time and planning.  Most schools continue to rely on facility support from its operating congregation(s).  Facility support includes things like:​​​

- Physical building space.

- Liability and property insurance.

- Utilities (at least a portion).

- Capital upkeep and improvements.

C) Are parents (of both the congregation and the community) ready and willing to enroll their children and contribute volunteer hours to enrich the school program?

4. Is the congregation prepared to welcome school families?

A) Are congregation members ready to adapt and be flexible, in order to maximize the opportunity to connect with the parents of school children?  Operating a school in your facility means new scheduling challenges, and change. 

B) Will members be intentional in watching for school families and seeking to build relationships?  There will be new visitors in worship, particularly when children are singing or participating in some other way.  They might sit in your seat!  Are you eagerly anticipating ways to welcome them in?

C) Are you prepared to practice the spiritual fruit of Patience?  School families will drive through the parking lot the wrong way.  They will sometimes be messy or careless.  They will not know the way things are done and will cause frustration at times.  They will require your patience.

Before you will be able to fully answer those four questions, you need to do some groundwork.  Figuring out what it will cost to get a school ministry up and running, staffed and supplied, governed and led, will be a key piece.  You can’t expect parents to commit to enroll their children unless you can tell them what it will cost.  You can’t expect the congregation to fully get behind this until you can say how much the church budget will have to commit towards school ministry funding.  And you can’t figure out either of those details until you decide what your school’s focus and shape will be.  The following is a key list of items that your team will need to discuss and ponder.  As you make decisions, it will guide what your school will end up looking like.  Key point:  How you begin your school does not dictate what it will look like down the road, but how you fund and operate your school will definitely either support or limit your school’s future.

Items to Discuss and Ponder

  • What will be the purpose/mission of our school?  In what way will it help fulfill the congregation’s mission statement?  How might the school ministry’s mission be more specific and focused than the congregation’s mission as a whole?

  • What students/families will your school ministry serve?  Only families of your congregation?  Lutheran families?  Families of other Christian denominations?  Unchurched families?  Non-Christian families?  A combination of some or all of these?  Answering this in light of the mission of your congregation, through school ministry, will shape the structure, staff, and programming of your school.

  • What will your school add to the community that differs from educational options already available?  What compelling reasons would people have to enroll at your school over other choices already present?  What will you do better than anyone else?  This includes the style of education offered, such as:

    • Personalized learning / competency-based education

    • Technologically relevant and enhanced education

    • STEAM learning

    • Classical Christian education

    • Project-based learning

  • What facility space will be used as classrooms?  What other parts of the facility will be used by the school?  Will there be some spaces that will be “school only”, or will you have all school spaces shared with other ministries of the congregation?  Will physical additions be needed (a building? a portable?)?  Will there be certain hours that school ministry is given first priority on certain facility space?

  • What grade levels will you offer initially, upon opening?  What plan will you follow for growth/expansion into further grade levels?  Will you begin at the bottom, with just Kindergarten?  Perhaps a preschool room and Kindergarten?  Or how about Kindergarten, 1st, and 2nd Grade for the first year?  You’ll need to ascertain some parent interest to better make a decision here.

  • How will you configure classrooms, and how many students will you allow in each room?  Small Lutheran Schools have often operated with more than one grade level in a room, such as a 1st & 2nd Grade combination, but these days many such schools are struggling to stay viable.  Additionally, parents are looking for schools where the number of students per room/teacher is low, perceiving this means more quality attention for their children.  16-22 students in a classroom is commonly seen as ideal, with one teacher.  With 20 or more students, the addition of a part-time teacher aide is valuable, particular in the primary grades (K-3).  For preschool programs, state regulations mandate the child/adult ratio, making those programs more costly than elementary school, where you are free to structure your numbers as you see best.

  • How will you staff the school initially?  Full time principal and a number of teachers?  Part-time principal who also teaches alongside other teachers?  School secretary/administrative assistant, part or full time?  Admissions Director (part or full time), to focus on marketing the school and bringing in new families?

  • Will you seek to call Commissioned Ministers to serve as principal and teachers?  The LCMS specifically trains professional church workers to serve in our schools, but there aren’t currently enough available to meet demand.  Schools must offer fair salaries and appropriate benefits to be able to ask a Commissioned Minister to join the staff - but it makes a powerful difference on the ministry impact of a school in a community, as well as in your own congregation.

  • How will custodial needs be addressed?  Operating a school will significantly increase facility usage, which means cleaning needs will grow.  Daily custodial care is recommended, either on staff or outsourced.

  • How will you govern the school ministry?  Some churches select individuals to serve on a School Board, with oversight of the school administrator and the school ministry.  Others empower the administrator with sole oversight of the school, under the supervision of the pastor or the church council.  Some grant the administrator authority to form his/her own advisory council, a blend of church members and school parents who have no authority but support the administrator and serve as a sounding board for new ideas and items for discussion.

  • What policies need to be created?  You’ll need a Policy Manual for your Board, as to how it governs the school and works with school administration/leadership.  You’ll need a Personnel Policy Manual, establishing all the legal aspects of employment and the employer/employee relationships.  It is recommended that both of these documents be submitted to an appropriate law firm or lawyer for formal review, to ensure they comply with all relevant laws/statutes.

  • What will you ask of your employees?  Job descriptions need to be created for each position.  You can’t ask people to do a job unless you can tell them what will be expected of them.

  • What will the tuition be?  What about a registration fee, to help with upfront enrollment costs?  And other fees?  Will you offer a lunch program, with an appropriate fee?  Before and after school care (also state regulated, but a huge need for many families) with the appropriate usage fees?

Painting the Financial Picture

Operating a Lutheran School is meaningful ministry work, but it must be recognized as more than ministry.  It is also a business and needs to be operated and funded in accord with wise business principles.  Failing to do so will create a school that lacks sustainability, becomes a drain on resources, and eventually closes.

Knowing where you are headed with regards to the questions of the previous section allows you to prepare a rough expense budget for your school.  Identifying operational costs allows you to set an appropriate tuition rate, based upon a realistic initial enrollment projection.

 

Fundamental Funding Principles:

  • Structure tuition and fees to cover all operational expenses, as a minimum plan.

  • Operational expenses should include all staff costs (salaries and benefits, professional development, etc.), supplies and materials, marketing and promotion of the school, website management, school technology needs, and anything else tied to the operation and regular activities of the school.

  • Cover program-enhancement costs and capital-project costs through tuition and fees when possible, but also by other sources, such as congregational support from the church budget, fundraising, and grants.

  • Facility costs (mortgage, utilities, property & liability insurance, routine cleaning/maintenance, landscape care) is often the key aspect that a congregation covers in support of its school ministry.  Plan for the school to generate revenue to cover all operational costs, while the church budget provides and cares for the facility space and most utilities.

  • Although this may not be attainable in Year One, work towards developing a budget that charges enough in tuition and fees to have excess funds that are set aside in a reserve.  A reserve fund allows you to weather cash flow issues over the course of a school year.  It also creates breathing room when enrollment one year falls short of a projection, or an unanticipated cost occurs (a roof leak, for example).

  • Establish a salary scale for workers.  The CNH District publishes an annual Compensation Guideline for Professional Church Workers with recommendations for teachers and principals; this can be a great reference as you create your own schedule.  Concordia Plans also has a salary calculator Compensation Tool that can quickly give some compensation numbers to consider.  Salary schedules for hourly workers in your school should be created in a manner that relate appropriately to the level of compensation you offer to teachers and principal, reflective of the difference in responsibility and training.  Compensating your staff appropriately is one of the most important decisions you will make, to allow you to hire and keep the right people for your ministry.

  • Determine what benefits you will offer.  If your congregation already participates in the LCMS Concordia Plans, you will need to offer the same plan to your school staff as you already do for pastor and other church staff.  Retirement and Survivor & Disability plans are to be offered to all workers who regularly are scheduled for more than 20 hours each week.  Health Care is to be offered to any worker who is full time as defined for benefits purpose by your organization; you may designate full time as more than 20, more than 25, more than 30, or 30 or more hours per week and more than five consecutive months as the definition of full time.

- Who will you cover for health insurance:  employee, employee and spouse, employee and children, or family?

- Which level of coverage will you offer?  A traditional PPO, or one of many different High Deductible plans (HDHP)?  If you choose an HDHP, you will also want to arrange for a Flexible Spending Account (FSA) or a Health Reimbursement Arrangement (HRA) to assist with managing the high deductible.  HDHP plans are often the best stewardship of ministry resources, while still providing quality insurance for employees.

- What percentage of premiums will the school/church pay?  100% of employee premium, 50% of spouse and/or children?  80% of employee, and no premium coverage for anyone else?  Some other configuration?  The options are whatever you choose to fund.  The better benefits offered, the better you financially care for your employees, and the more likely you are to keep your workers for longer.

- Remember, if you are enrolled in the Concordia Plans, you must offer the same plan options, coverages, premium payments, etc. to ALL eligible workers.

- If you offer health care other than through Concordia Plans, you will need to research and follow their rules for who may/must be offered insurance.

  • Do your research on what other private and parochial schools in your area are charging for tuition and fees, but don’t allow that research alone to set your rates.  More importantly, charge what it will take to fund your school ministry to the quality you believe children should receive when experiencing Lutheran education.

  • If you choose to offer tuition assistance/financial aid, do so using a need-based method.

- Determine in advance what percent of tuition may be covered by a tuition assistance grant for eligible families (up to 25%?  50%?  75%?).​

- We recommend no one receive a “full ride.”  People value best what they invest their money in, so every family should have a financial investment of tuition going towards their children’s education.

- Choose an outside company that specializes in financial assessments in determining how much tuition assistance a family qualifies for.  TADS and FACTS are two such companies used by many of our Lutheran Schools; there are others as well.

- http://www.tads.com/financial-aid-assessment/

- https://factsmgt.com/financial-management/grant-and-aid-assessment/

- How you will fund tuition assistance?  Fundraising?  A budget line of direct support from the church?  The “institutionally funded” model, charging enough regular tuition to create a surplus of funds which may be distributed as tuition assistance grants?  This last approach charges more to all so some may pay less.

- Determine who will make tuition assistance grant decisions and establish the criteria upon which decisions will be based.  Some schools have a committee just for this, comprising of one or more school board members, others in church governance (council or elders representatives), the principal and/or someone else involved with financial management for the school (such as a bookkeeper or business manager).  Sometimes pastor is part of this.  Regardless of who makes the decision, objective criteria should guide decisions, with discretion allowed for addressing extenuating circumstances (helping a family with a job loss or a medical situation, for example).  All work of such a committee must remain absolutely confidential.

Putting Pencil to Paper

The District can provide you with some sample budget templates.  The single largest operational cost will be for the staff you employ; most school ministries see upward from 80% of their revenue going to staff compensation (including benefits).  To determine staff compensation, you can refer to the CNH District Salary Guidelines on the District website or use the Concordia Plans Compensation Tool  Keep in mind, the budget draft you create will only be effective once you have students enrolled and the school is operating. You need to determine where initial start-up expenses will come from, which must be paid before any tuition will ever be collected.  Such expenses include:

  • Any required remodeling or additions to house the school.

  • Any required state or local inspections, such as for fire safety purposes.

  • Furnishing classrooms.

  • Acquiring technology tools for classrooms, instructors, and office use.

  • Advertising/marketing your school to the congregation and community.  Enrollment will want to begin months in advance.  For example, if you target starting a school year the fourth week of August, you will begin accepting enrollments for that first year perhaps all the way back in January, March at the very latest.

  • Hiring of a school administrator in advance is necessary to prepare the school for operation, to effectively market it, and to help bring in the appropriate teachers and support staff.  When possible, bringing in your administrator a full school year in advance is a great way to go.  At least half a year (beginning in January) is nearly a necessity.  You will need to have the funds in place to allow this administrator to be fully compensated even though the school will not yet be generating any income.  While this administrator may eventually also teach part-time, the time before the school opens should be full time dedicated to school start-up needs.

What Else?

There are many other things that will come up needing decisions as the school is begun.  What will the curriculum be?  Which textbooks, if any, will be used?  What will be the hours of operation?  Will you acquire a vehicle for school ministry use?  The list goes on and on.  These decisions will be best made in cooperation with a school administrator, and in fact many such operational decisions will best be completely left to the administrator as the educational expert you call to join you in ministry.

As you consider moving forward with this, know that the CNH District staff is ready and present to assist you.  In particular, the Assistant to the President for Education is your primary resource, and may be contacted directly:

By email:  Joel@cnh-lcms.org

By cell phone: (707)738-0019

When you have a committee together to explore moving forward, Joel will be happy to come meet with them, spending a day on site with you and going through the various matters this document has discussed.  Contact him when you would like to arrange a time for him to come out.

 

FUNDING AVAILABLE:  At this time, the CNH District has a grant available for starting Lutheran schools.  Here is a link to the School Start Grant Application.

 

OTHER FUNDING OPTIONS:  Lutheran Church Extension Fund (LCEF) exists and operates to support the establishment and growth of LCMS ministries.  They have a variety of loan products that may help with start-up costs, if more is needed beyond initial funding reserves and grant money, at extremely reasonable rates.  One program, SMART Loans, are directly designed to support school ministries.  While we don’t recommend beginning a school program with debt, a small loan may be a significant final step to launching a new educational ministry.  Contact CNH District LCEF Vice President Edward Kwak if you’d like to learn more about these funding possibilities (Edward.Kwak@lcef.org).

 

ONE MORE KEY RECOMMENDATION:  Take a field trip to visit one or more of our CNH District Lutheran schools.  The Assistant to the President for Education, Joel Wahlers, can make an appropriate recommendation.