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Education Market Insight: Understanding School Budgets

I recently penned a book offering a short description of the unseen subtleties of a rustic river scene:

“Imagine a river, deep and fast, charging downwards through a majestic canyon, slowing to a crawl as it ambles its way through a lush green valley. Although a winding river may at first seem unremarkable in its flow and function, it is actually teeming with hidden complexity. Upon closer inspection of a river we unveil a lively, changing, and connected environment, one consisting of currents, undercurrents, pools, eddies, meanders, weirs, swells, and even flood cycles.”

Similarly, educational budgets are teeming with hidden levels of complexity and multiplicity, and it would serve industry well to understand the variants you might face when selling to the education market. Here’s a close look:

Currents. Those regular and predictable budgetary cycles of schools, usually July 1 through June 31 the next year, spread over 365 calendar days. It’s hard to penetrate this cycle with new products, but possible.

Undercurrents. In education, pilot projects, skunkworks, and one-off experiments are always underway, under the surface. You never know when you can catch an undercurrent and get pulled in, hopefully surfacing in the main current of funding later.

Pools. Big pushes and new initiatives being planned with discretionary money, funds that have not yet been systematized into the regular budget cycle, but have been re-prioritized from somewhere else in the budget. Big pools of money also make their way into schools from predictable federal or state grant funding.

Eddies. Small pushes and new initiatives, but most often at the smaller scale school or department levels. These eddies are hard to find, but could easily turn into something bigger, given time and proven success.

Meanders. Purchases in education tend to slow down in July (folks are on vacation, money is spent), November to December (holidays), and during state testing months (late February through early April).

Weirs, Funding levels can rise at unanticipated times due to in-house PTA funding, classroom or school fundraising efforts, or surprise windfalls.

Swells. Anticipated funds from technology referendum issues that have been approved by voters, and begin to surge their way through the system, along with technology bond issues that spread themselves out over a 5-7 year period of continuous and predictable funding, are common, yet these all eventually evaporate. The same goes for new school construction funding, leading to the outfitting of the newly built school with supporting technology, on a one-time basis.

Flood Cycles.” Yes, some last minute monies do rush onto the scene. Take for example, start-of-the-year school funding that has been reprioritized away from other projects, unpredictable grant awards, or redirected parent organization funding. You must also keep your eye on end-of-budget-year purchases made possible by sweeping together unused funds before they are lost to the budget forever. Schools know what “use it or lose it” means.

As you can see, school funding is riddled with complexity, much like a river. Are you taking a pulse on all of these budget twists and turns in education? –Len Scrogan