In the previous post, I posited the idea that Affordable Private Schools, both as a concept and as a sector, have arrived. Today, with great enthusiasm, I would like to echo that sentiment. If today’s sessions at the Affordable Private Schools Symposium, organized by Gray Matters Capital, were any indication, the time is now. And that can mean one thing: it’s time to assess. It’s time to standardize. And it’s time to scale.
Much of the excitement revolved around the unveiling of a ratings tool to assess the adequacy of Affordable Private Schools. As with any ecosystem development, and that is exactly what this symposium sought to do – develop the Affordable Private Schools ecosystem, in order to move forward, it is necessary to be able to asses the product and make comparisons across products.
Just look at the social enterprise sector in the past year – another sector that has just recently arrived. The emphasis lately has been on creating metrics to measure social impact, to create standards. Impact Reporting and Investment Standards (IRIS) has created a set of financial, operational, and impact measures for enabling transparency of social and environmentally-oriented investments through a user-configurable, open source toolset. Global Impact Investing Ratings System (GIIRS) is a rating system designed to provide impact investors with an independent, objective way to assess the social and environmental impact of companies and investment portfolios.
But I digress. Back to Affordable Private Schools. There are many challenges in the sector, among them a lack of information, a lack of industry infrastructure, and the absence of both business as well as operational standards. What can be done to overcome these challenges? Build a ratings system, a ratings system that is “light” and balanced, useful and applicable. The applicability is key. Make sure the ratings system can be used for government and regular private schools as well as Affordable Private Schools. Make sure the ratings system delivers meaningful results. Make sure its findings accurately represent a school’s offering.
And this is exactly what Gray Matters Capital, M-CRIL, the Michael and Susan Dell Foundation, and Pratham have done. What’s the long-term vision of the ratings tool? To establish it as a performance standard for the sector and enable a significant flow of services and funds to the sector.
Their ratings system covers five domains – governance and strategy, the financial system and performance, student achievement, the learning environment, and parent engagement. The aim: to facilitate lending to Affordable Private Schools; to act as a third party assessment of school quality; to become a widely accepted school manager tool that drives business performance; and to enable informed decision making by parents.
All in all, this seems like a great offering. It uses indicators such as number of students, number of teachers, student to teacher ratio, students exempted from fee payment, students with overdue fees, operating expenses, recovery rate of tuition fees, revenue per student, among others. But the challenge will be to get people to use this product. It is very clear that it is a fee-based tool. A school owner must pay in order to have his school assessed. In a resource strapped setting, where a school owner (or edupreneur) is struggling to make ends meet because of the low fees paid by students, does he have the inclination to make an investment like this? The offering price starts at US$ 1500. This is yet to be seen. The marketing strategy and roll-out will be key. The first step might be to offer subsidized ratings to particular schools to establish necessity in the market. By being rated, a school might gain a step up the ladder when trying to access funds. We learned today that the Michael and Susan Dell Foundation insists on third party assessments of all organizations that they fund. So the ratings tool is right up their alley.
Let’s hope it is also up the alleys of others.
