1. THE GREENSPIRE SCHOOL
BUSINESS PLANNING DOCUMENT
December 14, 2014
Submitted by:
Michele Worden, Board Treasurer
Kevin Kelly, Head of School
William K. Anderson, NorthSky Consultant
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2. TABLE OF CONTENTS
Executive Summary ……………………………………………. 3
History and Background …………………………………….. 5
The Greenspire School Organization…..……………... 6
Core Curriculum.. ………………………………………………. 7
Facilities…………………………………………………………….. 8
Competition………………………………………………………… 8
Strengths and Challenges……………………………………. 9
Financial Health…………………… ……………………………. 10
Business Plan Action Recommendations…………….. 11
Fund Development Plan …………………………………….. 12
Financial Pro-forma……………………………………………. 14
Conclusion ………………………………………………………… 15
Exhibit 1:
1. Greenspire Financial Pro-forma ………………………
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3. EXECUTIVE SUMMARY
Work on this planning document began this past July with the intention of
completing a plan that would be implemented during the 2014-15 fiscal year with
completion of the document scheduled for September 30, 2014. However,
because of Kevin Kelly’s appointment as the new Head of School in August, it
became important to involve him in this planning process. As a result of this
involvement, the time frame for plan implementation will continue through June
of 2016.
The Greenspire School’s mission is “to provide an ecologically relevant and
academically rigorous program grounded in direct experiences that develop skills
to facilitate lifelong learning and nurture ethical citizenship”. Greenspire’s core
philosophy is the Montessori adolescent model in which learning occurs through a
process of active involvement with the environment and community and through
purposeful “work”. The curriculum promotes active engagement in all areas of
learning through cross-curricular projects.
As evidenced by student assessment, quality of staff, board involvement and
physical and instructional resources, Greenspire has been extremely successful to
date – living up to its ambitious mission.
If there is risk to the sustainability of the school, it lies within the financial
infrastructure of the organization.
Greenspire’s board has taken a calculated risk by seizing the opportunity to locate
its school in one of the unique areas of Traverse City, Michigan – The Village at
Traverse Commons, the site of the historic Traverse City State Hospital being
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4. developed by the Minervini Group. The site contains a large rolling campus
adjacent to several hundred acres of pristine meadows and wooded hiking trails –
ideal for the location of a school with Greenspire’s ecological mission.
To purchase the property and construct its facilities Greenspire financed the
improvements with several bank loans, personal loans and state assisted
operational funding with the net result being that the organization is highly
leveraged. The school’s fund balances have declined modestly over the past two
fiscal years and an unanticipated drop in enrollment primarily due to
administrative turnover, will lead to a larger decline during 2015 unless there is an
increase in non-student derived revenue – primarily gifts and grants.
The Business Plan which is included as a component of this report extends
through June of 2016 and is focused primarily on revenue enhancement as the
school already operates very efficiently.
Despite the financial risk, Greenspire’s unique curriculum and the investment in
the facilities should attract enough students to reach capacity within a few years
and combined with an increased focus upon financial stewardship, fund balances
should increase. Student enrollment has steadily increased since August of this
year as parents and students have toured the school and have learned about the
curriculum.
This business plan has been developed to address the existing financial situation
and to formulate the basis for a sound financial strategy for meeting challenges
that lie ahead.
The key strategies and action steps are:
1. The development of a sound recruiting and community awareness strategy
that will attract an enrollment of 95 students for the fall of 2015 and to
reach capacity of approximately 115 by fall of 2017. To accommodate this
enrollment increase, a relatively modest capital investment will be needed
to provide for additional educational space in the Maple building.
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5. 2. The development of a Fund Development Strategy/Plan to increase
revenue from grants, contributions and other sources of revenue by 50%
during 2015 with continual increases going forward,
3. Increasing board expertise and involvement in the area of fund
development,
4. Reduce the amount of facilities debt per student,
5. The business plan should be updated annually to include strategic
initiatives developed through a strategic planning process. A primary
objective of the planning process should include discussion of the ideal
enrollment that will achieve financial sustainability while maintaining
curriculum integrity and whether or not a market exists to reach the
enrollment objective,
By operating close to capacity along with an enhanced fund development effort,
the Greenspire School should be able to operate with a balanced budget for some
time. However, any major effort to expand the physical plant to meet future
enrollment demand will be hindered by any negative financial measurements.
Therefore, a longer-term goal should be to have a financial infrastructure that is
capable of taking on additional long-term debt if needed.
History and Background
Charter schools are state-supported public schools under the state constitution
operating under a charter contract issued by a public authorizing body.
Charter schools may include grades K-12 or any combination of those grades.
They may not charge tuition and may not screen out students based on race,
religion, gender, or test scores. If the number of students applying exceeds
enrollment capacity, students are selected randomly.
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6. Charter teachers must be certified and highly qualified as defined by the federal
Elementary and Secondary Education Act. Students are assessed annually (MEAP)
and schools are required to administer other state mandated assessments.
Charter schools are funded by the state and receive funding through the per-pupil
base foundation. This amount may not exceed the per-pupil base foundation
received by the local school district in which the charter school is located.
Charters do not receive funding through the assessment of local property taxes
and private schools may become charter schools only if they cease operating as
private entities.
The Greenspire School was chartered in late December 2010 and provides a
unique educational program for middle school students based on purposeful
connections between individuals, communities and the environment. Greenspire
is authorized by the Traverse City Area Public Schools and incorporates
Montessori philosophy and method place-based education.
Facilities are new and include two classroom buildings, a greenhouse, sugar
schack (maple syrup production), rabbit and chicken run and a school garden. It is
located adjacent to over 500 acres of hiking and nature trails which students hike
every day as part of the school curriculum.
The GREENSPIRE SCHOOL ORGANIZATION
The Greenspire School is organized as a non-profit corporation and is governed by
a volunteer board of directors.
Board Members:
Kurt Sanford, President
Blythe Skarshaug, Secretary
Michele Worden, Treasurer
Gina Aranki
Dawn Oh
Tara Ward
Full-time Staff:
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7. Kevin Kelly, Head of School – has two diverse decades of experience in
education as a social studies instructor, middle and high school principal,
and three years as a professional development consultant.
Eric Breithaupt, Teacher- B.S. in Environmental Science from Michigan
State and a M.A. in School Principalship from Central Michigan.
Kelly Francisco, Teacher-– B.S. in Education from Grand Valley State and
M.A. in Elementary Reading from Nova Southeastern University.
Erin Fitzpatrick, Teacher - B.S. in Elementary Education form Northern
Michigan University
Phillip Griard, Teacher- Degree from Northern Michigan in Outdoor
Recreation and Leadership Management and an English Degree from Grand
Valley State.
William Havill, Teacher - B.A. from Western Michigan University in the area
of television and theater and a B.S. from Central Michigan University with a
focus in middle school science.
Corey Hanson, Instructor - B.A. in Humanities from New College of
California and Master Gardener Certificate from Michigan State University.
William Havill, Teacher – B.A. from Western Michigan University in the
area of television and theater and a B.S. from Central Michigan University
with a focus in middle school science.
Katie Tomczyk, Special Ed Teacher- B.A. from Hope College with a degree
in Special Education Learning Disabilities and a M.A. in Special Education
Cognitive Impairments.
Sarah Payette, Teacher and Administrative Assistant – Degree in
Therapeutic Recreation from the University of Southern Main.
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8. THE CORE CURRICULUM
The core curriculum is based upon Project Based Learning (PBL) which emphasizes
hands-on, inquiry-based experience and collaboration with community partners.
Research shows PBL fosters substantial learning gains, a supportive school
culture, and connection between study and the real world. Projects are cross
curricular and presented as real world problems couched in essential questions.
FACILITIES
The school has two student learning spaces. The Maple Building was constructed
in 2008 and features natural lighting and in-ground heat. The atmosphere is
homelike and features a commercial kitchen that students use each week for
culinary classes. Maple was designed as a Montessori adolescent program
learning space and is ‘open plan’ with a capacity for 40 students.
The Spruce Building was opened in January of 2014. It is four times the footprint
of Maple and is architecturally similar. Spruce has several interior collaborative
learning spaces as well as a student presentation space and a state-of-the-art
middle school science laboratory. Spruce also contains lots of natural light, in-
ground heating and is a bronze level Leed Certified facility.
The facilities are designed for mixed age student groups working collaboratively
rather than traditional classrooms. The Grand Traverse Commons is an extension
of the classroom at Greenspire. Several trail heads lead off the school grounds
into the Commons and students hike the trails with staff everyday as part of
outdoor education and science and nature studies. Only steps from the student
mud room is Kid’s Creek, which the students monitor as part of their stewardship
project titled “Keepers of Kid’s Creek”.
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9. COMPETITION
There are two other charter schools located in the Grand Traverse area:
Grand Traverse Academy – serving grades K-12, Grand Traverse Academy is a
public charter school with special emphasis on providing academically gifted
students opportunities to learn with their academic and intellectual peers.
Woodland School – serving grades K-8, Woodland School is a public charter
school with special emphasis on traditional participation in the Arts and Sciences.
Like Greenspire and Grand Traverse Academy, students of various ages and
abilities work and interact together.
STRENGTHS AND CHALLENGES
Strengths:
• Student Achievement – students are successful as evidenced by the
Michigan Department of Education designation of the Greenspire School as
a reward school. Reward school status is only conferred on the top 5%
schools in Michigan,
• Board of Directors – members of this working board are extremely active
and dedicated. Board members share a common vision and are united as
parents working to create a unique and effective model of education, both
for their own children as well as the Grand Traverse community. The chair
provides overall leadership while other members are very active in the
“business” of the school from teaching part-time to fundraising and grant
writing.
• Teaching Staff - are certified, highly qualified and work collaboratively in
creating the cross-curricular projects that are represent a project-based
learning curriculum.
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10. • Facilities and location – The location is central to the area with a rural
setting that is unusually well-suited for the mission of connecting students
to the environment for study. The two buildings, Maple and Spruce are
designed with lots of natural light and as collaborative learning spaces. The
newest building, Spruce, that opened in January 2014 was designed as LEED
certifiable at the Bronze level.
• Executive Leadership – although newly appointed, the Head of School
brings significant administrative experience and having had a child attend
Greenspire, is very familiar with the mission and culture of the
organization.
• Marketing Niche – the environmental-based educational approach is
attractive to students and parents in Northern Michigan.
Challenges:
• Board of Directors – is small and given the active nature of the current
members, there is danger of burn-out over time.
• Enrollment – did not meet projections for the current year resulting in a
projected operating budget deficit of approximately $23K.
• Financial Stability – using generally accepted methods of measuring the
financial health of charter schools, Greenspire does not meet several
standards at the present time.
• Fund Development – there has been no formal development plan designed
to increase alternative sources of funding – primarily from gifts, grants and
facility usage.
• Financial Analysis – the accounting and reporting functions are outsourced
to TCAPS. While this has economic advantages, there doesn’t seem to be
any critical analysis provided to the Board by TCAPS.
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11. • Facililties – currently will only accommodate a maximum of approximately
95 students.
FINANCIAL HEALTH
The National Resource Center on Charter School Finance and Governance has
developed “Rule of Thumb” indicators to measure financial health. They are:
• 55% of gross revenues should be dedicated to teacher costs (salaries and
benefits) Greenspire = 46.8 % for the 2015 budget
• 30% of gross revenues should be dedicated to student services,
administration and other costs Greenspire = 36.6% for 2015 budget
• 15% of gross revenues should be the maximum dedicated to facilities costs
including debt retirement Greenspire = 20.2% for 2015 budget
These percentages when totaled equal 104% of the revenue projected for 2015
indicating that work must be done to balance revenue with and expenditures.
However, the ratios would improve somewhat if the value of the contributed
teaching services were taken into consideration. This value is estimated to be
$7,235 for the 2015 fiscal year.
As local support and enrollment increases, indicators will become more favorable.
The high ratio of debt to revenue could present a problem for financing increased
capacity but this problem could be offset if there is a significant demand for the
Greenspire experience.
An important tool that should be reviewed monthly is the Cash Flow Forward
Projection. A cash flow forward projection identifies future revenue and expense
month by month allowing the school to anticipate potential shortfalls. This tool is
especially important for anticipating short-term cash needs during the months
when school is not in session.
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12. BUSINESS PLAN THROUGH JUNE 2016
RECOMMENDATIONS FOR ACTION
1. Immediate attention should be given to increasing enrollment to 95
students for fall of 2015,
2. A “Fund Development Plan” should be formalized with an immediate
goal of increasing annual revenue from grants and contributions
sufficient to balance the budget for 2015. In dollar terms – about
$23,000 for 2015. The plan should also include strategies for generating
other sources of revenue including the use of physical assets during
times when school is not in session.
3. The Board should consider taking steps to add individuals with
development/finance experience to either the board or key committees
dealing with these issues. Individuals with this experience should also be
able to add considerable value during any strategic planning process.
4. The monthly financial data that is shared with the Board should include
summary financial statements that are easier to read by the Board in
order to better understand the school’s financial situation. These
statements should include a balance sheet, a summary operating
statement and a cash-flow forward statement. TECAPS has the ability to
produce these statements.
5. An event with a format similar to the harvest celebration should be held
in the spring with the intention of inviting key community members who
may have an interest in supporting the Greenspire School.
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13. 6. Greenspire should begin to experiment with summer camps and the
marketing of its facilities for rentals. Although summer camps will not
generate substantial revenue, they provide an opportunity for student
recruitment and additional community awareness.
FUND DEVELOPMENT PLANNING
Members of the business planning “team” believe that special attention should
be given to fund development as a key ingredient of the Business Plan.
Therefore, the following narrative highlights best practices used by organizations
to enhance financial resources.
Development Roles and Responsibilities
Full Board Responsibilities
• Create an Advancement Committee and adopt a development plan
• Commit to a culture of philanthropy that starts with the board: everyone
gives within their means
• Help develop the image of the school
• Be educated about development
Advancement Committee
• Facilitate board discussion regarding development issues,
• Assign board members tasks in cultivation and solicitation,
• Guide and assist the Head of School in creating marketing materials,
development systems & events
• Track and report progress to the board
• Ensure that all contributions and grants are properly receipted and
acknowledged
• Ensure that a stewardship plan is in place for each donor increasing the
likelihood that gifts will be repeated in the future.
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14. Individual Board Members
• Help generate a list of potential donors,
• Cultivate/solicit individual donors
• Be an ambassador for Greenspire
• Host house parties
• Personalize solicitation letters and make follow up calls
• Help cultivate relationships with foundations/corporations
Head of School and Staff
• Understand the development plan
• Develop school image and marketing materials
• Prepare grant applications and participate in cultivation events
• Keep Development Committee informed
• Assist in fundraising events and plans
Sub Committees
The Fund Development Plan should contain the following three sub committees.
These committees could be comprised of both board and non-board members:
Fundraising Events Committee
The only charge for this committee will be to organize and stage events
that can raise significant funds for the school. Volunteers for this
committee should be individuals who are well-connected in the
community, believe in the institution’s mission and enjoy the creative
nature of staging an event that can raise considerable funds for the
organization.
Major Gifts Committee
This committee will be primarily involved with the cultivation, solicitation
and stewardship of major donors. Ideally, members of this committee
would be peers of potential major donors and will have the capacity to
make their own major gifts.
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15. Annual Funds Committee
This committee will have the primary responsibility for soliciting annual
unrestricted operating gifts through direct mail and smaller fundraising
events.
FINANCIAL PRO-FORMA
The financial pro-forma shown as Exhibit 1 contains the operating budget
for 2015, the preceding three years of actual operating results and
projections for fiscal 2016-17 through 2018-19.
The major assumptions used for the projections are as follows.
1. Student enrollment will increase from 73 currently to 115 by fiscal
2017-18. To accommodate this increase, a modest facility renovation
will be required projected to cost approximately $60,000. This
renovation will be financed by a private loan over five years.
2. Teaching salaries are projected on the basis of 31% of student
revenue with benefits projected at 32% of teaching salaries.
3. Variable expenses include a 2% annual inflationary increase.
4. The existing $100,000 operational loan from the state will be
completely retired by 2018 or earlier.
If the enrollment and fund development objectives described in the
Business Plan are achieved, Greenspire’s fund balance should increase from
a projected $44,309 in 2015 to $372,487 in 2019.
CONCLUSION
The Greenspire School is a startup venture that is largely dependent upon
enrollment growth to reach a stage where the Board feels that it is
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16. achieving its community mission objective. In order to provide the
infrastructure to achieve the necessary enrollment growth, the Board has
elected to use debt financing as its primary source of capital. When the
enrollment reaches 115 currently projected for fiscal 2016-17, there should
be sufficient annual operating funds to meet debt service obligations and
increase its fund balances. The Board will then be in a position to decide if
there is enough market demand to expand services.
Although there is potential to increase funding from alternative sources
(grants, donations, facility usage), it is likely that no more than 10% - 15% of
the annual budget can be derived from these sources. Therefore,
enrollment revenue should fund general operations and the development
effort should fund program enhancements that make the Greenspire
experience special.
The financial pro-forma projects that in fiscal 2018-19, general operating
cost to be $816,450 and student enrollment revenue to be $828,000. The
operating surplus of $118,991 is derived primarily from the development
effort.
The authors of this report believe that the recommendations put forth in
this planning document will provide a sound blueprint for future
sustainability and mission achievement.
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18. EXHIBIT I - FINANCIAL PRO-FORMA ACTUAL ACTUAL ACTUAL BUDGET Projection Projection Projection Projection
2012 2013 2014 2015 2016 2017 2018 2019
REVENUE
Local Revenue:
Grants 25,943 26,796 31,470 42,400 40,000 40,000 40,000 40,000
Donations 1,755 7,754 43,410 22,000 26,000 27,000 28,000 29,000
Other 0 265 2,016 2,000 2,000 2,000 2,000 2,000
Total Local Revenue 27,698 34,815 76,895 66,400 68,000 69,000 70,000 71,000
State and Federal Revenue
Foundation Payments 269,938 412,944 520,739 527,324 684,000 828,000 828,000 828,000
Miscellaneous State Grants 4,801 3,027 18,901 26,556 19,600 19,600 19,600 19,600
Federal Grants 0 9,981 21,236 16,834 16,841 16,841 16,841 16,841
Total State and Federal Revenue 274,739 425,953 560,876 570,714 720,441 864,441 864,441 864,441
TOTAL REVENUE 302,437 460,768 637,771 637,114 788,441 933,441 934,441 935,441
EXPENDITURES
Middle School Instruction and Support:
Salaries, Benefits and Stipends 100,120 209,211 226,337 258,699 320,054 387,337 387,347 387,358
Challenge Course Supplies and Instruction 4,967 7,486 10,914 12,000 12,240 12,485 12,734 12,989
Depreciable Equipment 0 15,160 10,956 2,500 2,550 2,601 2,653 2,706
Other Instruction and Supplies 9,641 10,723 8,606 8,050 8,211 8,375 8,543 8,714
Added Needs Instruction 0 11,293 20,708 39,933 38,957 46,322 46,322 46,322
Instructional Support 0 16,095 35,432 22,834 7,337 7,484 7,633 7,788
Total Middle School Instruction and Support 114,728 269,967 312,953 344,016 389,349 464,604 465,233 465,877
General Administration:
Salaries and Benefits 44,447 76,588 68,356 101,408 107,619 109,771 111,967 114,206
Consultants and HR Fees 0 12,837 23,882 19,500 19,890 20,288 20,694 21,107
Legal and Audit 2,194 11,065 13,028 10,000 10,140 10,283 10,428 10,577
TCAPS Authorizer Fee and Financial Services 15,098 22,687 26,023 29,010 33,020 37,340 37,340 37,340
Interest - Cash Flow Loan 0 924 2,158 9,000 6,300 4,900 2,800 0
Other Administrative Expenses 4,927 9,260 10,437 18,600 18,922 16,753 17,039 17,330
Total General Administration 66,666 133,361 143,883 187,518 195,891 199,335 200,267 200,561
Plant Operation and Maintenance:
Utilities 9,084 8,421 13,536 14,000 14,280 14,566 14,857 15,154
Maintenance Services 0 0 0 0 10,000 10,000 10,000 10,001
Facility Rentals 500 46,932 19,800 0 0 0 0 0
Other Plant Operations and Maintenance 7,052 5,104 11,097 10,285 10,488 10,695 10,906 11,122
Total Plant Operation and Maintenance 16,636 60,457 44,433 24,285 34,768 35,261 35,763 36,277
Other Uses and Transfers:
Building Addition 0 1,393 89,031 5,000 0 0 0 0
Loan Principal and Interest Payments 0 0 66,584 99,735 119,735 153,735 153,735 113,735
Fund Transfers 0 260 1,503 0 0 0 0 0
Total Other Uses and Transfers 0 1,653 157,118 104,735 119,735 153,735 153,735 113,735
TOTAL EXPENDITURES 198,030 465,438 658,387 660,554 739,743 852,935 854,999 816,450
SURPLUS or (DEFICIT) 104,407 (4,670) (20,616) (23,440) 48,698 80,506 79,442 118,991
BEGINNING FUND BALANCE 88,093 88,094 88,095 67,479 44,039 92,737 173,243 252,686
EXCESS REVENUE OVER (UNDER) EXPENDITURES 104,407 (4,670) (20,616) (23,440) 48,698 80,506 79,442 118,991
ENDING FUND BALANCE 192,500 83,424 67,479 44,039 92,737 173,243 252,686 371,677
Enrollment 37 57 72 73 95 115 115 115
Operating Cost Per Student 5,352 8,166 9,144 9,049 7,787 7,417 7,435
Teacher Cost to Total Revenue Ratio 47.9% 38.7% 46.9% 45.5% 46.5% 46.4% 46.4%
Student Services & Admin to Revenue Ratio 36.56% 28.69% 24.67% 24.81% 24.88%
Debt Payments to Revenue Ratio 20.3% 19.6% 20.2% 20.3% 16.0%

19. Projection Assumptions
1. Teaching salaries will = 31% of student revenue
2. Benefits as a % of salaries will = 32%
3. Variable expenses include a 2% inflationary increase