Financial Stewardship

Over the last several years, St. Andrew's has developed new strength and commitment to faculty salaries and benefits, the educational program, the technology program, the physical plant, development and admission outreach, campus security, student support and financial aid. This intentional program of investment in human and physical resources has yielded what we believe is the strongest boarding school faculty in the country and an educational program whose rigor and authenticity is a model for schools everywhere. Our investments in these areas have placed us in a very strong competitive position among boarding schools, but we face the same financial pressures and realities other schools and colleges face:

  • Our costs are great. Our per-student cost in 2006-2007 will be $58,166.
  • Among our 10 competitor schools, our tuition in 2006-2007 is ninth at $35,500.
  • Forty-two percent of our students receive financial aid. We receive fewer tuition payments than our peer schools. Tuition will cover only 35 percent of our budget this year. The rest will come from endowment draw and annual giving.
  • Because we are a small school with generous financial aid and an ambitious educational program, we experience diseconomies of scale in some areas, such as food service, fuel use and facilities care.
  • Our endowment draw is 4.7 percent, a number we believe does not give us adequate cushion in case of unexpected changes in our budgets, especially in areas such as energy cost, insurance fluctuations and other operating expenses.
Noxontown Pond

To rebuild the cushion and move the School back towards a 4.5 percent endowment draw without sacrificing program quality, we will adopt a number of important measures. In 2000, we developed a financial model to track expenditures over five years. We have managed that model very well, but our endowment growth over that period of time has been less than expected, hence our endowment draw is close to the accepted 5 percent ceiling. Each of these measures applies positive pressure on certain "levers" within our economic model that result in lower endowment draw.

  • The tuition lever. We will continue to increase tuition, carefully monitoring increases among our peer schools. Our tuition increases over the past seven years have not raised our tuition relative to other schools. Seven years ago, our tuition was tenth in our selected peer group, and today our tuition ranks ninth among the same group of schools. At the same time, we will continue an aggressive campaign to educate middle- and low-income families about the availability of financial aid at St. Andrew's.
  • The financial aid lever. We must maintain our current commitment to financial aid, but without significant increase in endowment funds for financial aid, we cannot at this point increase it beyond where it is now, equivalent to 35 percent of our total tuition dollars. If we were a School enrolled entirely in full-pay students, we would collect about $10 million in tuition—instead, at present, we collect $6.5 million.
  • The philanthropic support lever. We will be more ambitious in raising support for St. Andrew's. We will ask for increased giving to the Annual Fund so that annual support for the School will provide 10 percent of our operating budget each year. To create the financial aid program that St. Andrew's aspires to deliver, we must also raise substantial new endowment to fully fund new calls on financial aid.
  • The investment return lever. We will continue working for excellent endowment returns. If we achieve a 6 percent investment return over the next five years, our endowment draw will fall to 4.48 percent by 2012; with flat investment returns over the next five years, our endowment draw would rise to an unacceptable and unsustainable 6.04 percent in 2012.
  • The expenditure lever. We will institute a conscientious program to monitor and balance expenditures carefully. We will sharpen our preparation of budgets, aiming for quality and checking carefully for areas that can be scaled back. We cannot add programs, sections or new initiatives that will push our personnel and costs higher. The faculty will continue to share the multiple tasks of boarding education and we will keep our faculty from growing.

Ultimately, the greatness of St. Andrew's as a school rests on its role in the lives of students, teachers, staff members, alumni, past and present parents and friends. St. Andrew's is a place that inspires us all to be hopeful, optimistic and idealistic men and women. St. Andrew's is a school of inspiration, transformation and creativity. We strive to ensure that St. Andrew's and St. Andreans work each day to make the world a more patient, loving, discerning, human and generous place. Thank you for inspiring this vision for the future.