Wall Street Rebound Brings Optimism to Peer Schools

After three years of budget restraints, most of New England’s prominent boarding schools are enjoying a strong rebound in endowments and alumni giving this year. Like Phillips Academy, many boarding schools were forced to make significant cutbacks over the last three years, but under today’s markets, these same schools are now enjoying the benefits of an improving economy. Phillips Exeter Academy Phillips Exeter Academy faced financial challenges very similar to those Andover dealt with, and in this year’s apparent economic recovery, they too are enjoying a strong rebound. “We are challenged just like others are… We have kept a short leash on any expense increases in our budget for the last few years,” Chief Financial Officer Jeff Fellows said. Exeter’s tuition increases for next year are expected to be on par with most other boarding schools, though somewhat higher than those proposed for Andover. Faculty salaries will also be increased for next year. Unlike Phillips Academy, Exeter had not cut any programs or staff because of finances, according to Director of Alumni Affairs and Development Jim Theisen. Additionally, Mr. Theisen has been encouraged by an improvement in alumni giving. “Last year was a down year, but this year has been exceptionally strong,” he said. “We are about 50% ahead of where we were last year at this time.” Last summer, Exeter finished raising $27 million in large gifts that will go toward a new student center. In addition to serving as a gathering place for students, this “Academy Center” will house the mail facilities, the student clubs, and all student activities. Presently, the Mr. Theisen and his colleagues in the Development Office are raising money for scholarships, new faculty positions, and a new squash center. Deerfield Academy Like most schools, Deerfield suffered from the recent economic downturn, but according to Communications Director Lee Wicks, the school was able to recover from the difficulties without making any significant program cuts. “Mostly, the way we handled the situation was very painless… nobody lost their job and no programs were cut,” she explained. At its highest point, Deerfield Academy claimed an endowment upwards of $250 million, and though it dropped significantly in the past three years, the endowment now appears to be rebounding. “We’re still being economically prudent… we’ve looked for opportunities to consolidate where we can,” noted Ms. Wicks. Nonetheless, Deerfield has benefited from generous alumni support and continues plans for long-term projects. The school is in the process of constructing a new 78,000 square-foot center that will house their science, math, and technology departments. Northfield-Mount Hermon The Northfield Mount Hermon School (NMH) felt the economic decline of the past few years, but with the recent recovery and with a pending consolidation to one campus, Chief Financial Officer Richard Wood looks toward the future with optimism. Like other schools, NMH has been working to control expenses. After the market declines of the recent past, NMH’s endowment has recovered to approximately $115 million. According to Mr. Wood, however, the endowment is not as large as many other boarding schools, and the school is not as dependent on endowment income. “We are certainly affected by the economy and by the performance of financial markets. However, the larger change for NMH relates to becoming a smaller school on one campus,” Mr. Wood said. The school’s trustees recently announced a historic decision to move to the Mount Hermon Campus and to reduce its enrollment to 600-750. While this change is difficult for many alumni, the educational and financial improvements will dramatically strengthen the school, Mr. Wood commented. According to Mr. Wood, the campus consolidation will allow Northfield Mount Hermon to remain financially strong. Choate School Negative returns in the stock market from 2000 to 2003 forced the Choate School to reduce expenses by approximately $1.2 million and significantly raise tuition, but according to Vice President of Administration and Finance John Burditt, this fiscal restraint has brought the school a more positive financial future. “This effort combined with much improved investment returns this year have resulted in our being essentially back on track with regard to our ideal financial parameters,” remarked Mr. Burditt. The Choate School is currently reporting an endowment of $190 million, a considerable improvement over its recent low of $160 million. Mr. Burditt added, “We are back to normal times… planning for the future, continuously trying to enhance the quality and effectiveness of our programs and support services, and raising the funds to support these efforts.”