Q: Redmond Parks and Recreation is doing research about the percentage split for recreation contract instructors.
We’d like to know what LERN now recommends, and what trends you are seeing in this area of programming.

A: There are several issues to be considered when contemplating instructor compensation. One that is critical is the financial formula that LERN recommends.

LERN recommends that you look at your costs as:

Promotion: The cost of marketing and promoting your program (not more than 15% of income)

Production: The cost of providing the programs and events. This is predominantly the cost of instructor compensation. (This should be no more than 35 to 40% of your income).

Operating Margin: This is the amount you have left after paying your promotion and production expenses. In a self-sufficient program, this is the income you would use to pay your operating costs, staff salaries, rent, utilities, etc. Operating margin for a financially healthy program should be around 50% but not less than 40% in any circumstance.

Although you may have subsidies for these costs, in times of tight budgets, we often find budgets being cut and programs unable to operate effectively. That is why we recommend that all programs work toward total cost recovery and self-sufficiency.

Under such a model, you would want to be paying your instructors somewhere between 35% and 40% of your income.