Casesi07.Endowment Fund Raise

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Casesi07.Endowment Fund Raise

  1. 1. CASE Summer Institute in Independent School Advancement <ul><li>Endowment Fundraising </li></ul><ul><li>Herb Soles </li></ul><ul><li>Monday, July 30, 2007 </li></ul><ul><li>10:00 - 11:15 AM </li></ul><ul><li>& </li></ul><ul><li>Wednesday, August 1, 2007 </li></ul><ul><li>8:00 - 9:15 AM </li></ul>
  2. 2. Question One: What do YOU think? <ul><li>It is crucial to understand exactly what the term endowment means. </li></ul><ul><li>So let’s have a quick opinion poll. </li></ul>
  3. 3. What do you think? <ul><li>What do most people consider to be the top three colleges/universities in the United States? </li></ul><ul><li>1)_______________________ </li></ul><ul><li>2)_______________________ </li></ul><ul><li>3)_______________________ </li></ul>
  4. 4. What do you think? <ul><li>What do most people consider to be the top three independent schools in the United States? (excluding your own) </li></ul><ul><li>1)_______________________ </li></ul><ul><li>2)_______________________ </li></ul><ul><li>3)_______________________ </li></ul>
  5. 5. What do you think? <ul><li>What do all of these school have in common? </li></ul><ul><ul><li>Criteria for greatness… </li></ul></ul><ul><ul><ul><ul><li>Vision </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leadership/management </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Resources </li></ul></ul></ul></ul>
  6. 6. <ul><li>Challenges for Independent Education </li></ul><ul><ul><li>Tuition inflation </li></ul></ul><ul><ul><li>Maintaining enrollment </li></ul></ul><ul><ul><li>Class size </li></ul></ul><ul><ul><li>Program expansion and development </li></ul></ul><ul><ul><li>Faculty compensation </li></ul></ul><ul><ul><li>Parent expectations </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Market demands </li></ul></ul><ul><ul><li>Diversity </li></ul></ul><ul><ul><li>Aging facilities </li></ul></ul><ul><ul><li>Security </li></ul></ul>
  7. 7. Let’s look at where schools get their resources. <ul><li>Traditional ways </li></ul><ul><ul><li>Tuition </li></ul></ul><ul><ul><li>Annual Giving </li></ul></ul><ul><ul><li>Auxiliary Services </li></ul></ul><ul><li>New Sources of Revenue </li></ul><ul><li>New Efficiencies </li></ul><ul><li>Cut and Slash </li></ul><ul><li>Endowment </li></ul>
  8. 8. <ul><li>What is endowment? </li></ul>
  9. 9. Definition by Purpose: <ul><li>An endowment is an independent school’s </li></ul><ul><li>savings account . </li></ul><ul><li>Proceeds from an endowment pay for the expenses not covered by tuition, the Annual Giving, or other income. </li></ul>
  10. 10. Definition by Purpose: <ul><li>An endowment provides additional permanent annual resources to maintain and improve the quality of education we provide our students. </li></ul>
  11. 11. Definition by Purpose: <ul><li>An endowment protects the school’s future financial well-being. </li></ul>
  12. 12. Most Common Endowment Uses <ul><ul><ul><ul><li>Quality faculty and administration </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Diverse and talented student body </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Extraordinary programs </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Well-equipped and maintained facilities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Other possibilities? </li></ul></ul></ul></ul>
  13. 13. Variations: <ul><li>1) Quasi versus pure endowment </li></ul><ul><li>2) Restricted versus unrestricted </li></ul><ul><li>3) Donor specified versus trustee designated </li></ul><ul><li>4) Book value versus market value </li></ul>
  14. 14. <ul><li>Let’s create a comparison with peer schools by using: </li></ul><ul><li>The Volunteer Support of Education </li></ul><ul><li>Annual Report* </li></ul><ul><li>*Note: Data for the following table was compiled from Volunteer Support of Education 2005. </li></ul>
  15. 15. 3.604 X 13,689,000 49,331,000 1867 Montgomery Bell Nashville, Tennessee 3.482 X 14,816,000 51,590,000 1890 St. Catherine’s School Richmond, Virginia 5.240 X 18,816,000 98,598,000 1906 St. Mark’s School Dallas, Texas 8.197X 22,814,000 187,000,000 1898 Woodberry Forest Woodberry Forest Virginia. 4.909 X 38,158,000 187,329,000 1951 Westminster Schools Atlanta, Georgia Ratio to Budget Operating Budget Endowment Established School
  16. 16. 0.940 X 15,000,000 14,000,000 1956 Marin Country Day School Conte Madera, CA 1.053 X 42,905,000 45,181,000 1900 1986 Harvard-Westlake Los Angeles, CA 1.368 X 12,002,000 16,424,000 1922 1981 Webb School Claremont, CA 1.998 X 11,663,000 23,300,000 1973 San Francisco University High School San Francisco, CA 4.532 X 13,259,000 60,093,000 1910 Cate School Carpinteria, CA 6.264 X 12,812,000 80,249,000 1889 Thacher School Ojai, CA Ration to Budget Operating Budget Endowment Established School
  17. 17. <ul><li>Create a comparison with </li></ul><ul><li>NAIS Benchmarking Statistics* </li></ul><ul><li>*Note: Data from the following tables was compiled from NAIS website, 2004 StatsOnline/NAIS, Last updated 1/25/06 </li></ul>
  18. 18. How Much Do You Need? Compare by school type. 53,558 26,800,164 Day-boarding 19,321 10,706,224 Day 179,043 56,288,890 Boarding-day $216,981 $49,688,638 Boarding Average Per Student Average Per School School Type
  19. 19. How Much Do You Need? Compare by school type. 59,899 25,495,876 All Boys 44,938 21,269,807 All Girls $30,664 $16,313,648 Coed Average Per Student Average Per School School Type
  20. 20. How Much Do You Need? Compare by school type. 31,976 32,232,254 Above 700 35,619 20,663,716 501 – 700 33,340 12,847,772 301 – 500 41,178 10,088,687 201 – 300 $34.958 $5,087,089 Under 201 Average Per Student Average Per School School Size
  21. 21. How Much Do You Need? Compare by school region. 20,503 10,301,786 West 25,098 13,869,038 Southwest 14,546 10,569,855 Southeast 83,481 32,745,423 New England 27,567 15,546,665 Midwest 36,895 17,620,248 Middle Atlantic $33,559 $16,063,903 East Average Per Student Average Per School School Region
  22. 22. How Much Do You Need? Compare by school region and three-year growth. 55.5% 20,503 13,181 West 28.1% 25,098 19,734 Southwest 14.8% 14,546 12,667 Southeast 24.6% 83,481 67,018 New England 10.4% 27,567 24,968 Midwest 25.4% 36,895 29,427 Middle Atlantic 37.9% $33,559 $24,330 East % increase Average Per Student 2004 -2005 Average Per Student 2001 -2002 School Region
  23. 23. Create a policy of setting a long term goal for endowment building. <ul><li>2.5 to 3 times the annual operating budget </li></ul><ul><li>20% of the cost of every new facility </li></ul><ul><li>30% to 50% of all capital campaigns </li></ul><ul><li>10% to 25% of annual giving </li></ul>
  24. 24. Five Strategies for Growth <ul><li>1. Creative Investment </li></ul><ul><li>Identify priorities </li></ul><ul><li>Evaluate asset mix </li></ul><ul><li>Select investment managers </li></ul><ul><li>Monitor progress </li></ul>
  25. 25. Five Strategies for Growth <ul><li>2. Budget Discipline </li></ul><ul><li> Reduce distribution </li></ul><ul><li> Designate annual funds for endowment </li></ul><ul><li> Transfer annual giving proceeds in excess of goal </li></ul><ul><li> Find alternative income sources </li></ul>
  26. 26. Five Strategies for Growth <ul><li>3. Unrestricted Capital Giving </li></ul><ul><li>Leave allocation up to the School </li></ul><ul><li>Create greatest flexibility during a campaign </li></ul><ul><li>Name facilities with endowment gift </li></ul>
  27. 27. Five Strategies for Growth <ul><li>4. An Endowment Campaign </li></ul><ul><ul><li>Faculty chairs </li></ul></ul><ul><ul><li>Financial aid endowment </li></ul></ul><ul><ul><li>Program endowments </li></ul></ul><ul><ul><ul><li>Facility maintenance endowment </li></ul></ul></ul><ul><ul><ul><li>Endowing an annual gift </li></ul></ul></ul>
  28. 28. Five Strategies for Growth <ul><li>5. Focus on Planned Giving </li></ul><ul><li>Produce outright and deferred support </li></ul><ul><li>Help the donors and the School </li></ul><ul><li>Offer many gift vehicles (ways of giving) </li></ul><ul><li>THE source of most </li></ul><ul><li>educational endowments </li></ul>
  29. 29. <ul><li>Any Questions ? </li></ul>
  30. 30. Appendix # 1 <ul><li>College and University Endowments </li></ul><ul><li>( Year-End Market Value) </li></ul><ul><li>As reported by </li></ul><ul><li>2005 Voluntary Support of Education </li></ul><ul><li>1) Harvard University $25,221,804,000 </li></ul><ul><li>2) Yale University 15,091,021,000 </li></ul><ul><li>Stanford University 12,205,035,000 </li></ul><ul><li>Princeton 11,200,000,000 </li></ul><ul><li>University of Texas System 11,101,608,000 </li></ul><ul><li>Massachusetts Institution of Technology 6,712,400,000 </li></ul><ul><li>Columbia University 5,190,564,000 </li></ul>
  31. 31. Appendix # 2 <ul><li>Independent School Endowment </li></ul><ul><li>(Year-End Market Value) </li></ul><ul><li>As reported by </li></ul><ul><li>2005 Voluntary Support of Education </li></ul><ul><li>Phillips Exeter Academy (MA) $706,000,000 </li></ul><ul><li>Phillips Academy Andover (MA) 622,863,000 </li></ul><ul><li>St. Paul’s School (NH) 353,636,000 </li></ul><ul><li>Hotchkiss School (CT) 328,812,000 </li></ul><ul><li>Deerfield Academy (MA) 309,363,000 </li></ul>
  32. 32. Appendix # 2 Continued <ul><li>Independent School Endowment </li></ul><ul><li>(Year-End Market Value) </li></ul><ul><li>As reported by </li></ul><ul><li>2005 Voluntary Support of Education </li></ul><ul><li>6) Peddie School (NJ) 238,483,000 </li></ul><ul><li>7) Groton School (MA) 230,655,000 </li></ul><ul><li>8) Lawrenceville School (NJ) 213,986,000 </li></ul><ul><li>9) Choate Rosemary Hall (CT) 213,000,000 </li></ul><ul><li>10) Westminster Schools (GA) 187,329,000 </li></ul>

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