To some, a discussion about ‘financial issues in private schools’ may seem like a non-sequitur. Independent schools are able to set their own fees, vary the salaries offered to staff, take decisions about investment and plan for the future. So why do they have concerns about finance? Why is considerable effort put in to fundraising by these schools year after year? And why do independent schools often become the target for criticism about the way their ‘wealth’ is or isn’t shared with the wider community?
These issues are incredibly complex but it’s important that they be addressed so that public perception of independent schools’ behaviours and attitudes towards finance can be improved.
Why do independent schools have such real concerns about finance?
One of the great advantages of the independent sector’s financial freedom is exactly that – the freedom to determine what is best for the school, its students and staff at any given time and to make provisions accordingly. Whether appointing new members of staff, reducing class sizes or offering alternative examination options, independent schools can make instant decisions to improve the school experience for students and staff. Concurrently, and possibly paradoxically, this freedom can also be a drawback: there is no government support or any external safety net in case of emergency. The responsibility to plan for a fiscally prosperous future lies firmly with the bursar, who should be prepared for irregular outgoings – some of which can be anticipated, but not always! – from ongoing building maintenance to urgent repairs and national increases in teacher pension contributions to unexpected teacher shortages, as well as coping with fluctuating levels of income year on year, dependent on the number of fee-paying students.
Should the financial planning of a school be a concern for fee payers? The answer is, of course, yes! As with any investment, parents and guardians should be enquiring about the health of the school’s budget – whether money is available for development projects as well as day-to-day expenditure.
The concerns over financing independent schools arise from the very real fact that these schools typically generate only a very small surplus each year from fees alone, after day-to-day running costs are accounted for. Day–to-day running costs, by their very nature, are not sufficient to fund out-of-the-ordinary expenditure. How then are capital projects funded? How are bursaries afforded to families who are struggling financially? And how is the sometimes enormous job of maintaining and renovating the portfolio of school property and grounds (often featuring beautiful period properties which are inevitably financially draining, given energy inefficiencies and constant repairs) to be afforded?
The need for fundraising
Many schools benefit from historical endowments or income from livery companies and receive supporters’ gifts and contributions. As a pioneer of women’s education, St Mary’s School, Cambridge has no such historical wealth to speak of, and prospers now thanks to sensible and conscientious management of finances as well as the generosity of parents and alumnae. Often it is the case that those individuals who have seen first-hand the role the school plays in empowering and equipping women to play their part in the world are those who are inspired to support it. The school is firm in its commitment to offering an education which is unashamedly tailored for girls and to continue providing the best possible education by investing in important future improvements. But to so do so it needs to raise funds beyond its financial resources. The school is not willing to borrow money, so instead financing for large and small projects comes from its reserves, which are being continually built up through saving and fundraising.
Parents are actively encouraged to support, participate in and contribute to fundraising for the school’s development projects – the most recent of which is a newly opened science hub. The school’s perception of such projects is that they are an investment for the future. Offering supporters the opportunity to contribute to a project about which they are passionate enables the school to fund projects like the science hub, in addition to other essential initiatives, rather than instead of. Another benefit of fundraising is that short, sharp bursts of support and contribution allow planned projects to get off the ground much more quickly than if the full amount of a project is paid for from the school’s reserves, and the ability to plan and deliver projects such as the science hub in good time is essential for a modern educational institution.
What is the alternative to asking parents and guardians to support the school in this way after having already contributed considerable amounts through termly fees? Is the answer to increase fees for all, in order to increase the surplus and thus the school’s ability to invest and save for the abovementioned costs? St Mary’s doesn’t believe raising fees to cover all outgoings is the answer. There is already much public commentary on whether independent schools are accessible to families earning £50,000 to £100,000, and raising fees beyond current levels would preclude this demographic, ensuring independent schools really are only an option for the wealthiest 10 percent of families.
Surely it is better to raise funds for essential projects in a way which means external supporters of the school can donate; parents with the desire and resources to commit more can do so without all being put under pressure; and students too can contribute in their own ways to projects they are passionate about?
Fundraising also supports St Mary’s in its commitment to providing a stable education for girls throughout their school careers. The Sister Christopher bursary fund is awarded to girls who would benefit in a pastoral sense from either joining or staying at the school. Whether the girls need a stable school career to balance a difficult home life or are likely to suffer from moving schools during examination courses, the bursary allows these students to continue their education without disruption. The school offers a number of other bursaries, some of which support vulnerable and disadvantaged students through national contributing schemes as well as the school’s own bursary fund.
The awarding of bursaries can be a moral minefield and in reality there is only one finite pot from which bursary support can be offered. The dilemma is often whether it is better to offer a handful of families a larger donation towards their daughter’s education or to offer a larger number of families a smaller level of financial support. The latter is the school’s current position, mindful of the long-term financial implications of supporting families on an ongoing basis, as well as the long-term prospects of the individuals in question.
Of course, awarding bursaries is not the only way for an independent school to share its ‘wealth’ with the wider community, and St Mary’s works with other schools in areas which will benefit students from both schools – language clubs or lessons, for example, offer languages such as ancient Greek which are not available at these other schools.
I would like to see the perception of finance in independent schools and for fee-paying families changed; independent schools are restricted in their spending and fee-paying families’ budgets limited. That said, both sides are united in the sincere pursuit of providing the next generation with an outstanding all-round education and real-world preparation, giving parents choice whilst retaining the independent sector’s freedom and intrinsic values.