1. Turning Point School
Culver City, CA
Endowment
Fund Raising
Presented by
Herb Soles
ISM Adjunct development Consultant
February 17, 2012
2. Who Is ISM?
• Founded in 1975 • Primarily a research firm
• Serves independent • Consultations,
schools exclusively publications, workshops,
and online learning
• 3,700 clients
• Insurance
• United States and 31
foreign countries • FAST (financial aid
software)
• Visit more than 100
schools per year • Consortium
3. Question One:
What Do You Think?
• It is crucial to understand exactly what the
term endowment means.
• So let’s have a quick opinion poll.
4. What Do You Think?
What do most people consider to be the top three
colleges/universities in the United States?
1)_________________________
2)_________________________
3)_________________________
5. What Do You Think?
What do most people consider to be the top three
independent schools in the United States (excluding your
own)?
1)_________________________
2)_________________________
3)_________________________
6. College and University Endowments
(Year-End Market Value)
As reported by 2007 Voluntary Support of Education
1) Harvard University
$34,306,642,000
2) Yale University
$22,364,717,000
3) Stanford University
$17,164,836,000
4) Princeton
$15,787,200,000
5) M I T
$9,980,400,000
7. Independent School Endowment
(Year-End Market Value)
As reported by 2007 Voluntary Support of Education
1) Phillips Exeter Academy (MA) $1,047,909,000
2) Phillips Academy Andover (MA) $780,300,000
3) St. Paul’s School (NH) $438,200,000
4) Hotchkiss School (CT) $425,745,694
5) Deerfield Academy (MA) $385,600,000
8. 6) Peddie School (NJ) $306,585,642
7) Groton School (MA) $293,720,979
8) Choate Rosemary Hall (CT) $267,000,000
9) Lawrenceville School (NJ) $260,116,690
10) Woodberry Forest School(VA) $244,614,218
9. What Do You Think?
What do all these schools have in common?
Criteria for greatness …
• Vision
• Leadership/management
• Resources
10. Challenges for
Independent Education
• Tuition inflation • Parent expectations
• Maintaining enrollment • Competition
• Class size • Market demands
• Program expansion • Diversity
and development • Aging facilities
• Faculty compensation • Security
11. Let’s Look Where Schools
Get Their Resources
• Traditional ways
Tuition
Annual Giving
Auxiliary Services
• New sources of revenue
• New efficiencies
• Cut and slash
• Endowment
13. Definition by Purpose
• An endowment is an independent school’s
savings account.
• Proceeds from an endowment pay for the expenses not
covered by tuition, annual giving, or other income.
14. Definition by Purpose
An endowment provides additional permanent annual
resources to maintain and improve the quality of
education we provide our students.
16. Most Common
Endowment Uses
1) Quality faculty and administration
2) Diverse and talented student body
3) Extraordinary programs
4) Well-equipped and maintained facilities
5) Other possibilities?
17. Variations
1) Quasi versus pure endowment
2) Restricted versus unrestricted
3) Donor specified versus trustee designated
4) Book value versus market value
18. Let’s create a comparison with
peer schools by using:
The Volunteer Support of
Education Annual Report
* Note: Data for the following table was compiled from Volunteer Support of Education 2006.
19. Operating Ratio to
School Established Endowment
Budget Budget
Westminster Schools
1951 209,000,000 43,000,000, 4.860X
Atlanta, Georgia
Woodberry Forest
Woodberry Forest, 1898 204,000,000 22,935,000 8.912X
Virginia
St. Mark’s School
1906 105,155,000 22,395,000 4.695X
Dallas, Texas
St. Catherine’s School
1890 52,452,000 15,496,000 3.385X
Richmond, Virginia
Montgomery Bell
1867 54,000,000 14,623,000 3.693X
Nashville, Tennessee
20. Create a comparison with NAIS
Benchmarking Statistics*
* Note: Data in the following tables was compiled from NAIS Web site, 2004 StatsOnline/NAIS,
last updated 1/25/06
21. How Much Do You Need?
Compare by school type:
School Type Average Per School Average Per Student
Boarding $49,688,638 $216,981
Boarding-day 56,288,890 179,043
Day 10,706,224 19,321
Day-boarding 26,800,164 53,558
22. How Much Do You Need?
Compare by school type:
School Type Average Per School Average Per Student
Coed $16,313,648 $30,664
All Girls $21,269,807 $44,938
All Boys $25,495,876 $59,899
23. How Much Do You Need?
Compare by school type:
School Size Average Per School Average Per Student
Under 201 $5,087,089 $34.958
201–300 10,088,687 41,178
301–500 12,847,772 33,340
501–700 20,663,716 35,619
Above 700 32,232,254 31,976
24. How Much Do You Need?
Compare by school region:
School Region Average Per School Average Per Student
East $16,063,903 $33,559
Middle Atlantic 17,620,248 36,895
Midwest 15,546,665 27,567
New England 32,745,423 83,481
Southeast 10,569,855 14,546
Southwest 13,869,038 25,098
West 10,301,786 20,503
25. How Much Do You Need?
Compare by school region and three-year growth:
Average Per Average Per
School Region Student Student % increase
2001–2002 2004–2005
East $24,330 $33,559 37.9%
Middle Atlantic 29,427 36,895 25.4%
Midwest 24,968 27,567 10.4%
New England 67,018 83,481 24.6%
Southeast 12,667 14,546 14.8%
Southwest 19,734 25,098 28.1%
West 13,181 20,503 55.5%
26. Create a Policy of Setting a Long
Term Goal for endowment Building.
1) 2.5 to 3 times the annual operating budget
2) 20% of the cost of every new facility
3) 30% to 50% of all capital campaigns
4) 10% to 25% of annual giving
27. Strategies for Growth
1. Creative Investment
• Identify priorities
• Evaluate asset mix
• Select investment managers
• Monitor progress
2. Budget Discipline
• Reduce distribution
• Designate annual funds for endowment
• Transfer annual giving proceeds in excess of goal
• Find alternative income sources
28. Strategies for Growth
3. Unrestricted Capital Giving
• Leave allocation up to the school
• Create greatest flexibility during a campaign
• Name facilities with endowment gift
4. An Endowment Campaign
• Faculty chairs
• Financial aid endowment
• Program endowments
• Facility maintenance endowment
• Endowing an annual gift
29. Strategies for Growth
5. Focus on planned giving
• Produce outright and deferred support
• Help the donors and the school
• Offer many gift vehicles
The source of most educational
endowments
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