Even as the 40 members of the Fairchester Independent Schools look for future growth at their annual admissions fair Sept. 25 in Purchase, N.Y., private school trustees will be gathering in New Haven to share lessons learned during the recession on stemming revenue declines ”“ and the impact those declines can have on schools.
Whereas Fairfield County private schools in general managed to increase program service revenue during the recession ”“ that is, tuition and fees ”“ many took huge hits on other parts of the balance sheet, including donations and investment returns.
The same day the Fairchester Independent Schools holds its admissions fair at SUNY Purchase, the Connecticut Association of Independent Schools scheduled its annual conference for trustees of private schools at the Hopkins School in New Haven.
Speakers are to include Patrick Bassett, president of the National Association of Independent Schools, who is to discuss governance issues.
Bassett knows Connecticut well ”“ he was once headmaster of the Pomfret School in Windham County. More to the point, he knows the trials headmasters and trustees nationally have undergone the past 18 months, as they have attempted to balance revenue needs against the recessionary pressures facing parents and donors.
Addressing the topic earlier this year at a gathering of the Consortium of Independent Schools of Ontario, Canada, Bassett said that the recession had differing impacts on private schools, depending on their locations and demographics.
“I represent 1,400 schools in the United States, and more than half of them opened smaller this year than last year,” Bassett said. “We actually told our schools to anticipate smaller enrollment, and how to manage that, because we knew it was coming. Everybody knew it was coming.
“Not only did more than half lose enrollment, they all virtually right-sized,” Bassett added.
For good reason ”“ while parents appear to have been steadfast in keeping their children in private high schools, those institutions saw their budgets knocked askew during the market turmoil caused by the credit crisis.
For instance, after the Brunswick School pocketed nearly $19 million in excess revenue in 2007, in the recession year of 2008 the Greenwich boy”™s school reported a $1 million loss as overall revenue dropped 34 percent to just over $35 million. In a filing with the Internal Revenue Service, the Brunswick School indicated it invests its endowment assets in vehicles that pose a “moderate” level of risk.
The Hotchkiss School, the Lakeville institution that is among the most financially secure schools in the nation, actually reported a $10 million increase in investment income in the 2009 fiscal year. The value of its net assets still plunged 20 percent however, due to extra debt it carried on its books.
Schools are quick to point out that revenues and expenses can swing wildly year to year, due to one-time fundraising campaigns and donations, or one-time costs like new facilities. And schools undoubtedly fared better in 2010 as the securities and jobs markets recovered.
Still, some of the longer-term trends are worrying. Throughout the United States, 5,000 fewer high-school students enrolled in private institutions in the academic year that began last fall, the first drop in at least a decade, according to preliminary estimates by the National Center for Education Statistics (enrollment in grades 8 and lower have fallen annually since 2002).
Including religious schools, private high schools were expected to see an additional 8,000 seats go empty this year ”“ if accurate, a nearly 1 percent drop in just two years, and it gets worse ”“ by 2018, NCES expects private high school headcount to drop by another 10 percent, or by 139,000 students. Public school enrollment is expected to rise nationally during that period. The percentage of students in private elementary and secondary schools declined from 11.4 percent in 1997 to an estimated 10.4 percent this year.
