Exploring Milton’s Endowment
by Nina Taneja on Friday, February 20th, 2015
With its perfectly manicured green grass and contemporary glass buildings, Milton Academy often gets categorized with other New England prep schools as one of the wealthiest high schools in the country. But what work goes into earning this money, and where does it come from? Mr. Bland and his team are currently in the process of holding twelve meetings with alumni to improve their fundraising strategies.
While full tuition for high school students ($51,330 for boarders and $42,130 for day students) covers a significant amount of the school’s income for spending and funding, other sources of income are necessary to keep the school running. Starting February 26, our school will run solely on money from fundraising. Some of this money comes from Milton’s endowment, which was about $254 million as of June 30, 2014. According to the Milton Academy website, 70 percent of Milton’s income comes from tuition, 17 percent from the endowment, 8 percent from annual giving, and the rest comes from other forms of gifts.
So what exactly is an endowment? An endowment is a fund that ensures the long-term viability of an institution. In Milton’s case, donations from alumni, parents, and friends of the school flow into this fund annually. Those who donate $1,798 or more in one fiscal year become members of the “1798 Circle,” a recognition society for donors that reflects Milton Academy’s year of establishment.
In addition, the Investment Committee of the Board of Trustees invests the fund so that it grows year after year. In the last fiscal year, for example, Milton’s endowment grew “17.4 percent and outpaced benchmarks on one-year, three-year and five-year through one-month performances,” according to Lisa Winick, Chief Advancement Officer at Milton’s Development Office. She adds that endowment’s earnings is spent yearly “to invest wisely and plan for the long-term financial health of the Academy.” This percentage, also known as a drawdown rate, is kept low intentionally so that any earnings in excess of this amount can be used to further build the endowment’s market value. The current drawdown rate approved by Milton’s Board of Trustees is 4.65 percent of the endowment’s average value from the previous twelve quarters (three years).
Twenty percent of Milton’s endowment is unrestricted and supports the day-to-day operations of the Academy; the remaining 75 percent is restricted for specific priorities and programs. Seventeen percent of Milton’s operating budget depends on the endowment. The endowment, therefore, directly impacts faculty compensation, financial aid, curriculum renewal, and extracurricular programming. Elizabeth Foster-Feigenbaum (IV) says that the endowment and its significant funds allow her and all other Milton Academy students to have the “unique high school experience.” Isabel Greenberg (IV) believes that the financial aid aspect of the endowment was particularly valuable, saying that it helps “amazing people from a wide variety of backgrounds to attend Milton.”
While $250 million of an endowment may seem large, Milton’s endowment is the lowest in comparison to those of other boarding schools such as Andover, Exeter, St. Paul’s, Deerfield, Hotchkiss, Choate, and Groton. As reported in December 2014, Andover and Exeter have endowments well into the billion dollar range, while other boarding schools’ endowments range from $356 to $552 million dollars. So why does Milton have such a relatively low endowment? The answer may lie in Milton Academy’s different community structure from its contemporaries’.
“One of the challenges in comparing our endowment with other private schools is that there is no independent school quite like us,” states Winick. She explains that Milton’s peers in the ISL represent a mix of boarding and day programs. The majority of the schools are just 9-12 grades, while a few have middle schools. No other ISL school has a K-8 division and most do not have a 50:50 ratio of day students to boarders in their high school divisions.
While the endowment is spent in certain areas of the academy, students express opinions that Milton Academy should invest more money into other aspects of school life. Technology support is currently 3% of Milton’s budget, but Jack Weiler (IV) stated that more money should go into turning Milton “more virtual, like transferring textbooks onto iPads.” Anna Desan (III) says, “School spent more money on funding clubs, specifically social rights and social community groups like GASP and the feminist paper, which both met resistance to funding from the school.” No matter how it is spent, the endowment is a major financial force behind both the school’s day to day actions as well as long term goals.
Short URL: http://miltonmeasure.org/?p=6860