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Endowment fund raising

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  • 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 threecolleges/universities in the United States?1)_________________________2)_________________________3)_________________________
  • 5. What Do You Think?What do most people consider to be the top threeindependent schools in the United States (excluding yourown)?1)_________________________2)_________________________3)_________________________
  • 6. College and University Endowments (Year-End Market Value) As reported by 2007 Voluntary Support of Education1) Harvard University $34,306,642,0002) Yale University $22,364,717,0003) Stanford University $17,164,836,0004) Princeton $15,787,200,0005) M I T $9,980,400,000
  • 7. Independent School Endowment (Year-End Market Value) As reported by 2007 Voluntary Support of Education1) Phillips Exeter Academy (MA) $1,047,909,0002) Phillips Academy Andover (MA) $780,300,0003) St. Paul’s School (NH) $438,200,0004) Hotchkiss School (CT) $425,745,6945) Deerfield Academy (MA) $385,600,000
  • 8. 6) Peddie School (NJ) $306,585,6427) Groton School (MA) $293,720,9798) Choate Rosemary Hall (CT) $267,000,0009) Lawrenceville School (NJ) $260,116,69010) 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 forIndependent 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 SchoolsGet Their Resources• Traditional ways  Tuition  Annual Giving  Auxiliary Services• New sources of revenue• New efficiencies• Cut and slash• Endowment
  • 12. What isEndowment?
  • 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 PurposeAn endowment provides additional permanent annualresources to maintain and improve the quality ofeducation we provide our students.
  • 15. Definition by PurposeAn endowment protects the school’s future financial well-being.
  • 16. Most CommonEndowment Uses1) Quality faculty and administration2) Diverse and talented student body3) Extraordinary programs4) Well-equipped and maintained facilities5) Other possibilities?
  • 17. Variations1) Quasi versus pure endowment2) Restricted versus unrestricted3) Donor specified versus trustee designated4) Book value versus market value
  • 18. Let’s create a comparison withpeer 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 BudgetWestminster Schools 1951 209,000,000 43,000,000, 4.860XAtlanta, GeorgiaWoodberry ForestWoodberry Forest, 1898 204,000,000 22,935,000 8.912XVirginiaSt. Mark’s School 1906 105,155,000 22,395,000 4.695XDallas, TexasSt. Catherine’s School 1890 52,452,000 15,496,000 3.385XRichmond, VirginiaMontgomery Bell 1867 54,000,000 14,623,000 3.693XNashville, 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 $216,981Boarding-day 56,288,890 179,043 Day 10,706,224 19,321Day-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 $33,559Middle 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 LongTerm Goal for endowment Building.1) 2.5 to 3 times the annual operating budget2) 20% of the cost of every new facility3) 30% to 50% of all capital campaigns4) 10% to 25% of annual giving
  • 27. Strategies for Growth1. Creative Investment • Identify priorities • Evaluate asset mix • Select investment managers • Monitor progress2. Budget Discipline • Reduce distribution • Designate annual funds for endowment • Transfer annual giving proceeds in excess of goal • Find alternative income sources
  • 28. Strategies for Growth3. Unrestricted Capital Giving • Leave allocation up to the school • Create greatest flexibility during a campaign • Name facilities with endowment gift4. An Endowment Campaign • Faculty chairs • Financial aid endowment • Program endowments • Facility maintenance endowment • Endowing an annual gift
  • 29. Strategies for Growth5. Focus on planned giving • Produce outright and deferred support • Help the donors and the school • Offer many gift vehiclesThe source of most educationalendowments
  • 30. QUESTIONS?
  • 31. Advisory Services Membership• Consulting • Consortium• Publications• Workshops Financial Aid• E-learning • FAST®—powered by ISMInsurance Services Career Corner• Employee Benefits • Employee Resources• Domestic and International Student Accident and Health Surveys• Section 125 (Flex Spending) • Attrition• Group Long Term Disability • Alumni• Long Term Care • Faculty/Administration• Voluntary Products• Group Life
  • 32. ISM Inc. Websites isminc.com facebook.com/ismfanpage twitter.com/isminc youtube.com/indschmgt