This article appeared as "Money Matters" in the Winter 2024 issue of Independent School.
My paternal grandmother was a force of nature. By the age of 12, she had lost both of her biological parents and was working in the textile mills in Connecticut to help support her stepmother and half-sister. When I was growing up, I remember how she’d stress the importance of education and self-sufficiency to her grandchildren, particularly her granddaughters. We’d need to be able to “butter our own bread” and “keep a roof over our head,” she’d remind us. While money doesn’t buy happiness, she would say, her times without it—and raising young children during the Great Depression—were “hard.” I have often thought about how these early and ongoing conversations with my grandmother were foundational to my own feelings about money and its impacts.
Indeed, most people’s behaviors and attitudes around money are emotional and deeply held, influenced by those who raised them. They can be generational too, shaped by external context and world events. (Think about how millennials’ life choices and consumer behaviors have been so distinctly shaped by factors such as economic uncertainty, college debt, and technological advancement.) Money evokes intense feelings—sometimes stress, often guilt and shame, and just as often pride and self-sufficiency. Money is one of the most common issues couples fight about and the top source of stress in general, according to the American Psychological Association’s annual Stress in America survey. It’s also one thing most people don’t like talking about; in the same study, only 52% of adults said they are comfortable talking with others about money/finances.
And while money may be an uncomfortable topic of conversation for many, school leaders in particular have to get comfortable with it—to not only be able to manage the school’s budget and finances, but also to understand all the ways in which money plays a part in the life of the school, its culture, and its community. Money is crucial to how schools run—the long-term viability of most institutions is reliant upon tuition, giving, investing, and auxiliary income—and heads, boards, and many others in schools play a role in managing it. But beyond the intricacies of the business model, there are many undercurrents about money, status, privilege, and influence that are playing out in schools in ways that are visible and less visible. We have to pay attention, to listen for these undercurrents, because they impact students’ full educational experience and speak to larger questions of value, access, and purpose.
The Layers of Money
The independent school financial model is challenging in large part because both the expense and revenue sides are so people-driven. According to DASL data, on average, 65% of schools’ expenses are spent on people—that is, paying the salaries, benefits, and taxes for teachers, administrators, and other staff. At the other end of the equation is net tuition revenue, which makes up 80% of an average school’s revenue, and is limited to the amount a family is able and willing to pay in a given market.
While a large part of school budgets are committed primarily to compensation, teacher salaries (in public and private schools) are simply not cutting it in most markets; they lag behind salaries of other professionals with college degrees by nearly 25%, according to the Economic Policy Institute. They have also stagnated; an NAIS analysis found that independent school teachers’ salaries in 2022–2023, when adjusted for inflation, were lower than in the previous four years.
One of schools’ biggest challenges of the moment is trying to find the balance between hiring and keeping the best people while still being accessible and affordable to a broad economic range of students. Some schools have managed to continue to increase salaries, while others are investigating different kinds of benefits packages. Still others are building retention efforts around creating more sustainable working conditions and focusing on the aspects of teaching that are most meaningful; Hillel Academy (FL), for example, is starting to experiment with more flexible teaching schedules. Other schools are experimenting with flexible workplace policies for administrators whose daily physical presence is not as crucial, allowing the schools to compete for talent with companies outside our sector. Meanwhile, artificial intelligence is presenting both opportunities and questions for our staffing models.
Beyond understanding the undercurrents of sustainability and the financial model, schools also need to remember that how we talk about—and reflect—money matters. In the media and in public discourse, independent schools are often described as “elite” and “privileged”—even though this characterization overlooks the diversity of schools’ financial profiles and the socioeconomic diversity of their student bodies. Our schools serve families from a broad range of financial backgrounds. While many families are on the upper end of the income scale, 26% of students at NAIS schools, on average, receive need-based aid, according to DASL data. (For a closer look at who applies for and who receives aid and the changing profile of “need,” check out my colleague Mark J. Mitchell’s article, “The Face of Financial Aid.”)
As it has grown across the country, the gap between the extremely affluent and other families has grown at many schools, contributing to a deeper sense of “haves and have nots” that impacts school culture and threatens students’ sense of belonging. When students don't feel they can fully participate in all activities at a school because of cost, it takes a collective toll.
I recently discussed the hidden costs of school with Peter Park, director of financial aid and associate director of admission at The Peddie School (NJ), who has been studying the Education Data Initiative to understand such costs and their impact across independent schools. In his research, he found that extra costs such as fees for trips, extracurricular activities, uniforms, etc., can add up to another third of the overall cost of attendance, beyond tuition. For students who receive financial aid, this additional burden might lead them to choose not to participate in these “extras,” which are such an important part of the full educational experience. It’s important for school leaders to understand the true cost of attendance, be transparent with families about these costs, and take steps to make sure every student can fully participate in the educational experience. Some schools, for example, ensure that these extras are taken into account with the financial aid package and underwriting trips, equipment, uniforms, and other add-ons.
The Opportunity
The missions and financial profiles of independent schools vary widely—tuition at NAIS day schools in 2022–2023 ranged from $150 to $92,348, according to DASL data. And while heads from small schools with fewer resources might envy the budgets of larger schools, and heads of larger schools might feel vexed by the complexity of their financial picture and the pressure to provide ever more opportunities to broad student bodies, I think this range of profiles and experiences presents an opportunity to further the collective conversation about financial sustainability and the business model.
A few weeks ago, a head of school asked what inspires me most about our community of independent schools. My answer was pretty fundamental: Every school has something to share with the rest. In other words, I have never been in a school that has not figured out something that other schools would really benefit from understanding. Perhaps it’s how to turn a gym into a flexible performing arts space, as my alma mater, The Williams School (CT) did; how to run a glass-making studio for students and the community like The Crefeld School (PA); how to build multipurpose community learning spaces for the campus and community like Westminster School (GA); or how to develop a partnership with a local professional soccer league that leads to updated facilities and fields, like at Currey Ingram Academy (TN). In these cases, the schools had a good idea or took advantage of an opportunity that ultimately enriched the educational experience for their students—and very likely contributed to the financial sustainability of the school. I’m sure they learned from mistakes along the way, lessons that could be shared within the independent school community.
I hope NAIS can be a gatherer of such ideas and experiences—a convener, bringing together schools of all types, sizes, budgets, and cultures, so we can learn from one another. This can help schools individually deliver on their missions and be more financially sustainable—and add to the impact our schools have on the greater world.
On the Road
This past fall, I met with and presented to more than 10 groups of schools across the country, from Connecticut to Colorado, throughout the South, and beyond. My goal has been to deepen my understanding of the experience for schools of all different types, sizes, regions, and markets. I’ve been listening, and I’m so thankful for the invitations and the insights these opportunities are giving me.
In addition to learning more about individual schools and about the challenges and opportunities in certain regions and markets, I'm hearing a lot about the experiences of leadership. This moment in time is asking a lot of leaders—for example, to learn and lead simultaneously and to quickly and publicly reflect on an event or issue that is complex and far-reaching. These conversations are helping me see how these universal leadership experiences are playing out in very different school environments. They have me thinking deeply about how we can harness the power of our community and network to support each other most effectively, so we can meet these challenges together.
