There's a line from Hamlet that Arthur Levine and Scott Van Pelt invoke in a recent Chronicle of Higher Education essay on the collapse of American colleges: "When sorrows come, they come not single spies but in battalions." They're writing about higher education, where roughly one institution is closing or merging every week. But just about any independent school leader reading that piece should feel a chill of recognition and then ask, “ How many of my faculty members would understand why?” For far too many the answer would be very few.
This is not because faculty don't care. They do. But caring about a school and understanding how it works as an enterprise are two different things. And the gap between them is costing schools more than many leaders recognize.
I’m lucky to be working with a very talented and experienced head of school who is now in his first year leading a financially challenged institution. Significant budget cuts had accumulated over the last few years — staffing, programs, maintenance — and they were left unexplained to the community. Attrition had risen, enrollment had dropped, and discounting had increased. This new head decided it was important to part the curtain with the faculty and invite them in so that they could understand the context in which they are working. Along with the CFO and the board's finance committee chair, he dedicated an entire faculty meeting to the school's financial realities, the key budget levers, how they work together, and how leadership and the board was pursuing sustainability. He made clear that faculty had an important role to play. The response was overwhelmingly positive. The faculty expressed deep appreciation for this outreach. He treated the faculty as a group of professionals, as adults who could and should be able to handle the realities of the place in which they worked.
For many heads, their instincts are to keep financial complexity contained. Let the business office handle the numbers. Don't alarm people with enrollment projections or margin discussions. Faculty are there to teach, not to worry about the budget.
That instinct is understandable and comes from a good place, but it produces bad outcomes.
When faculty don't understand the enterprise — how revenue is generated, what drives costs, why enrollment fluctuations matter — they fill the void with assumptions. Those assumptions are rarely more reassuring than reality. Rumors travel faster than facts. Faculty who feel excluded don't become less anxious; they become more anxious and less trusting.
They also become bystanders. When budget constraints require difficult choices — a program sunsetted, a hire deferred — faculty without financial context experience those decisions as arbitrary, or as evidence that leadership doesn't value their work. The conversation that could have been "here's why, and here's how you can help" becomes "here's what's happening to you."
Enterprise literacy doesn't mean turning teachers into accountants. It means building a working understanding of a handful of concepts that illuminate how the school actually functions.
The revenue reality. Most independent schools derive the vast majority of operating revenue from tuition. That single fact has enormous implications. Faculty should understand the school's enrollment capacity, what it currently runs at, and what the budget assumes. A simple sensitivity analysis showing what a 10- or 20-student enrollment shortfall means in concrete dollars is one of the most clarifying visualization documents a head can put in front of a faculty.
Enrollment versus net tuition revenue. A school can be full and still be in financial trouble. When discount rates rise — when the school awards increasing financial aid to maintain headcount — net tuition revenue per student falls. This is one of the most misunderstood dynamics in independent school finance. Faculty who believe a full school is a healthy school need to understand that the question isn't how many students are enrolled, but at what net revenue.
Why costs compound faster than tuition. Schools are people-intensive enterprises. Compensation, benefits, and the staffing ratios that define the independent school experience all rise faster than general inflation, year after year. Faculty who understand this stop experiencing budget constraints as evidence that leadership doesn't care, and start understanding them as the predictable result of running a labor-intensive enterprise in a competitive talent market.
The competitive landscape. Faculty should understand who the school is actually competing with and the honest answer is increasingly complex. Not just other independent schools, but improved public options, charter schools, magnet programs, micro-schools, homeschooling, and hybrid learning models.
How decisions actually get made. One of the most corrosive forces in school culture is the belief that budget decisions are arbitrary or political. Faculty who understand the financial framework — what fixed costs look like, where there is genuine discretion, how enrollment projections translate into staffing decisions — can engage with decisions honestly rather than attribute them to bad faith.
Start with the head, not the CFO. When financial education comes exclusively from the business office, faculty experience it as a finance function, not a leadership priority. When the head presents enrollment dynamics and explains cost pressures, it signals that this is everyone's business.
Use real numbers, not abstractions. Talking about financial sustainability in the abstract produces little engagement. Showing faculty what a 5% enrollment decline means for the operating budget — in concrete dollars, connected to real decisions — produces genuine understanding. The enrollment sensitivity analysis, the net tuition revenue trend over five years, the ratio of tuition increases to cost increases: these are the documents that build literacy.
Create regular touchpoints, not one-time briefings. A single annual "state of the school" address is not a literacy program. Consider a brief quarterly financial update at faculty meetings,not a deep dive, but a standing agenda item that normalizes financial conversation over time.
Invite faculty into the problems. The most powerful enterprise literacy is experiential. A small working group asked to think through a challenge will learn more about the enterprise in six weeks than in six years of passive observation — and may generate ideas that leadership hasn't considered.
Not every faculty member will welcome enterprise literacy. Some resistance is philosophical: some teachers believe that concerning themselves with enrollment economics would compromise their integrity as educators. Their job is to teach; someone else's job is to keep the lights on.
Some resistance is self-protective. If the enrollment trends are worrying and the competitive landscape more threatening than it appears from a classroom window, not knowing allows a person to come to work focused on what they love. For many people, that is a reasonable psychological strategy for preserving the energy teaching requires.
And some resistance is a form of distancing, a response to years of watching leadership make financial decisions without explanation, seeing programs cut and colleagues not replaced, and concluding that disengagement is the rational response to a system that wasn't designed to include them anyway.
All of these are understandable. None of them are positions a school can afford to leave unchallenged.
The faculty member who opts out of enterprise literacy doesn't become insulated from enterprise risk. They simply become less equipped to respond to it. When enrollment declines require program cuts, the faculty member without financial context will experience those cuts as arbitrary. When a beloved colleague's position is eliminated, they'll have no framework for understanding the decision as anything other than indifference. When the school needs to make a significant strategic shift — and increasingly, schools will — the faculty most resistant will be precisely those who never understood why the old model stopped working.
There is also something worth saying directly to faculty: your role extends beyond the walls of your classroom. The ability of students to continue attending the school year over year, the stability of the program you've built, the colleagues you work alongside — all of it depends on the financial health of an institution you've decided not to understand. A school is not a guarantee. It is an ongoing achievement. And every person who works in it is, in some sense, is responsible for whether that achievement continues. As the saying goes, No Margin, No Mission.
The goal isn't unanimity, it's critical mass. Enough shared understanding across the faculty that financial conversations can happen, that change can be explained rather than merely announced, and that the school's most creative people can be genuine partners when the institution needs them most.
Don't make enterprise literacy feel like a loyalty test. Faculty who sense that engagement is being used to sort the committed from the uncommitted will disengage faster and more permanently.
Meet resistance with curiosity, not frustration. A faculty member who says "this isn't my problem" is usually telling you something important about trust, about how decisions have been made historically, about what they feel their role to be. The answer to "why should I care?" isn't a lecture on fiduciary responsibility. It's a genuine conversation about what the school means to them and what it would take for it to still be here in twenty years.
Let the converts do the work. In most faculties, there are teachers who engage readily with enterprise thinking. Those faculty members are more persuasive with resistant colleagues than any administrator will be.
Be patient, but be persistent. The faculty culture around financial literacy that exists today was built over decades. It won't be rebuilt in a year. But a head who consistently treats enterprise understanding as a normal part of professional life will, over time, shift what feels normal.
There is a version of faculty culture where financial decisions are made by administration, explained minimally, and resented broadly — where faculty commitment to the school's mission is genuine and deep, but disconnected from any understanding of what sustains the institution that pursues it.
And there is another version: faculty who understand what drives the school's revenue, who recognize why enrollment matters and what net tuition revenue actually means, who see the competitive pressures clearly enough to take them seriously, and who bring their creativity and commitment to bear not just on their classrooms but on the institution as a whole.
The second version doesn't happen by accident. It happens because a head decided that faculty deserved to know — and then built the culture, the touchpoints, and the habits that made knowing possible.
The sorrows, as Hamlet knew, do not come alone. But institutions that face them together, with clear eyes and shared understanding, are far better positioned than those where the faculty only learns what's coming when it has already arrived.