A sustainable financial model for low fee private schools in South Africa

Abstract

International governments have recognised that providing quality ‘Education for All’ is a top priority. In South Africa, there is a movement towards the global phenomenon of low fee private schools due to the government schools not satisfying the need for quality education. Sustainability of these schools is imperative as they are playing an increasingly important role in the South African education system. Therefore, the aim of this study is to develop a sustainable financial model to ensure these schools are an attractive investment opportunity for all stakeholders. A two phased approach was used to develop the sustainable financial model. The first phase focused on ten interviews with managers and/or founders of low fee private schools to gather information on their financial models. This information was then consolidated into a financial model, which in turn provided a guideline used to interview ten experts from the educational and the financial business sectors in phase two. Two financial models were formed as a consequence and the combinations of these models form the sustainable financial model for low fee private schools. The sustainable financial model acts as a mechanism to ensure sustainability of low fee private schools. The Structural Financial Model (from phase two) has an “aerial view” and exhibits the necessary levers for sustainability. The Relationship Financial Model (from phase one) has a “terrestrial view”, which exhibits the relationship between the different levers in an organisation of a school. A combination of both models results in a sustainable financial model for low fee private schools.Copyright