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How important is endowment size?

Portmanteau55Portmanteau55 Posts: 19Registered User New Member
edited November 2008 in Prep School Admissions
The schools we're looking at have a wide range of endowment sizes (from $25M to $200M). I see from Boarding School Review that the national average is $16M. How much should this be a factor in our school choice?
Post edited by Portmanteau55 on

Replies to: How important is endowment size?

  • PeriwinklePeriwinkle Posts: 2,594Registered User Senior Member
    I think each family must decide for themselves how important endowment size is. On the positive side, a large endowment usually means that the school has been a fine school for many years, and that it is supported by a large community of alumni. A large endowment allows a school to recruit able students, of all income levels. It also allows a school to recruit wonderful faculty members, and to offer them generous benefits. In an economic crisis, schools with large endowments are unlikely to go out of business.

    So what's the negative side? Well, a large endowment can insulate a school from the market. This can be positive, as the school can create a curriculum without an eye to current fashions. It can also be negative, though, as the most appealing prep school applicants may decide to attend more up-to-date schools.

    Schools with a large endowment are likely to be schools with many legacy students. This means that there may be fewer spots available for an applicant without any connection to the school.

    A school with a small endowment may be a more vibrant place, and really be in touch with its mission. Some schools, especially Quaker schools, may not have large endowments, because they offer generous financial aid, or low tuition.
  • Balto55Balto55 Posts: 52Registered User Junior Member
    ..of the post below, except for the vibrancy part. I don't think there is any correlation between size of endowment and campus energy. Going ahead, a larger endowment will enable a school to pursue greater economic diversity (if they choose to).

    Make sure you look at size of endowment PER STUDENT - that is a better measure of capital available to support the infrastructure/programs required by the size of the student body.
  • other shoeother shoe Posts: 14Registered User New Member
    A large endowment enables a school to offer more financial aid .
    Groton,School will wave tuition to accepted students whose income is below 75,000. Saint Paul's School will do the same for income below $65,000, and Phillips Exeter waves its tuition for $36,500 .
    The Groton School is the first boarding school of its size in the country, and the third in New England -- after St. Paul's and Phillips Exeter -- to dedicate its endowment for this cause.
    Phillips Exeter offers no loans to prevent its students from graduating with debt, and Groton School is discontinuing the loan program for the same reason.
    a free-tuition program helps to ensure a larger applicant pool and diversity.
    I seriously doubt that a large endowment will "insulate a school from the market" as Periwinkle stated above . On the contrary a large endowment helps a school in all aspects of the maintenance high educational standards and facilities .
    ALL schools aspire to have a large endowment .
    and this last statement by periwinkle "A school with a small endowment may be a more vibrant place, and really be in touch with its mission" is just plain hogwash sorry but it just is not true. endowment has nothing to do with this . The school community and its predecessors do.
    so to answer your question a school with a large endowment will have the resources to stay current,maintain its facilities, employ highly educated teachers and be able to offer a sizable amount of financial aid .
    More classes, 2 rinks , turf fields, new athletic centers,performing art centers, these things take money and alumni want these things for their school.
    This being said .... it does not mean that schools with a smaller amount of endowment are not equally wonderful places to receive a quality education. Not every student wants the bells and whistles . But some of the really great small schools will not have the resources to offer economic diversity .
    To put this in perspective here is a quote from the Groton Schools 08 fin aid announcement.
    "two-thirds of families across the U.S. earn less than $75,000 a year, and the school could not ignore the financial challenges they face. It's important to make sure students come from all walks of life with different socio-economic, religious and ethnic backgrounds."
    sooooo a school without this financial resource really could not offer this same diversity.
    again it is really all in what you are looking for in a school, how much aid they can give you and how your child feels. That is why a student needs to apply to different schools with different endowments .
    THEN... you can make your decision by what is offered to you .
    good luck !
  • PeriwinklePeriwinkle Posts: 2,594Registered User Senior Member
    other shoe, there's a significant difference between having a large endowment, and being willing to spend it.

    I agree, a large endowment allows a school to do marvelous things. I notice that CFS, The School at Church Farm, manages to land in the top 20 boarding schools for:
    • Diversity - High percentage of students of color
    • Affordability - Least expensive tuition
    • Affordability - High percentage of students on financial aid
    • School Resources - Large financial endowment
    • School Resources - Highest endowment/student
    • Selectivity - Low acceptance rates

    And, "may" is a modal verb expressing possibility. Under Frank Boyden, at some point, Deerfield Academy had an endowment far smaller than many of its current peer schools. I'm willing to bet that it was a very vibrant place.
  • BrooklynGuyBrooklynGuy Posts: 666Registered User Member
    also,other shoe: for Exeter the income amount is $75,000. And, Andover has a similar policy,but just does not set a specific cut-off.
  • other shoeother shoe Posts: 14Registered User New Member
    oops yes your right about Exeter I Typed that wrong. Thanks

    Periwinkle:
    I am not saying the a school with a small endowment is not vibrant but I also do not think as you stated that

    "A school with a small endowment may be a more vibrant place, "

    I just do not feel that a schools endowment size large or small is a factor in what you call the "energy" of the place. Quite frankly It sounds as if you think all these old largely endowed schools are behind the times,a sort of reverse elitism? It is baloney.
    IN GENERAL Most schools with large endowments will be able to offer more aid per student.
    That is not to say that a school with smaller endowment will not bend over backwards to give an accepted applicant what it can to help them attend.

    I am not familiar with CFS but I believe it is a very small day/boarding school for Boys only ? 180 students?
    The size and make up and physical structure of a school should and will have a lot to do with how a school spends its endowment. If you have a large day student population your costs will be in different areas than a boarding school would be, even the fact that it is an all boy school will change how money is spent.
    My point is .
    There is a school out there that will fit the need for every kid, and every budget.
    We were lucky that my child was accepted into one of the schools that was able to offer her the amount of aid we needed to attend.
    That may not have been the case at a school with a much smaller endowment . I don't know .
    But we are very happy with her choice and with the "energy and vibrancy" of the place.
  • baseballmombaseballmom Posts: 1,429Registered User Senior Member
    Endowment size should not be a primary factor when choosing a school. If you don't have the stats to get into SPS or Deerfield, then the size of the endowment or average FA per student is meaningless.

    If a school has a decent size endowment and they want you, they will find the funds for you. It's that simple.

    My D attended a school with an endowment of under $20 million. She was granted more than 50% FA. The FA was based upon OUR income and assets, not the school's total endowment or average FA per student. Another school accepted her, but waitlisted her for FA. That school was Loomis Chafee. I don't know the size of their endowment, but it is far in excess of $20 million. They didn't want my D as much as the other school did.

    If you need FA to attend do not make the mistake of excluding schools with small endowments and do not make the GIANT error of only applying to the elite preps because of their mega-endowments.

    Another area to look at is the condition of the facilities on campus. I've heard complaints from Exonians that their theater is horrendous. And yet the school is flush with cash. "What does THIS school do with its money?" is a better study than the simple comparison of millions. What is the condition of buildings and athletic facilities? What programs are growing? Focus on these areas and not on how much cash is in the bank and you'll wind up at a good match.
  • other shoeother shoe Posts: 14Registered User New Member
    baseballmom
    I agree that if a school really wants you they will try to find a way to help you afford it.
    But I don't agree that they will always be able to come up with the funds no matter what . It is a sad truth . It doesn't mean that these schools are better or worse. Just different.
    I am so happy for you that your D got 50% FA but the truth of it is many folks can not afford 50% that is a big chunk of money .
    That is why the schools that offer the No tuition Policy for certain income levels are doing so much good, and that.... is due to their endowment.
    Again please don't get me wrong ,no one should apply to a school simply because of endowment . They should however apply to a variety of schools so that they may be offered more than one choice.
    But you are right do not exclude a school because of its small endowment.It is sometimes it seems the luck of the draw.
    How great it would be if everyone could ignore the fact that some schools will offer more money than others.A students dream school may just not have the FA package that a student needs, the student needs to be aware of that before they apply . .
  • baseballmombaseballmom Posts: 1,429Registered User Senior Member
    other shoe--"But I don't agree that they will always be able to come up with the funds no matter what ."

    I didn't say that anything like that.

    The schools that are offering a free ride for families that make under $75,000 have incredibly low admission rates. My point is that families should not LIMIT their search to these schools due to the FA policy. It is a recipe for disaster.
  • prettyckittyprettyckitty Posts: 1,363Registered User Senior Member
    As with everything else, endowment size is exactly as important as you want to make it. If you need financial aid, then it is important; if having a high percentage of other students on FA is important to you, then it is important. Essentially, do not base your choices on the dollar amount. If you must base it on numbers, base it on the more important ones: % of students on FA, quality of the buildings, $ available to student organizations, etc.
  • nhsportsdadnhsportsdad Posts: 39Registered User Junior Member
    endowment makes a difference. the cost of most boarding schools is around $40K per year. while endowments mean more financial aid, it means more money spent against all students. at saint paul's, for example, the tuition only covers around half of what is spent on each student. this means that all saint paul's students are receiving "aid."

    as we considered schools with smaller endowments, we could not help but notice how resources beyond the classroom (namely student support like health) varies based on finances.
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