It was spring 2020, and Covid-19 was running rampant in Los Angeles. Schools, both public and private, had closed their buildings, and many had moved to online education. The timing of the pandemic coincided with re-enrollment for the upcoming school year. One prominent Los Angeles Jewish day school, Sinai Akiba, was looking for a way to support its families and to keep the community together. Their solution was to offer a 30% tuition reduction for any time that students spent learning virtually. Sinai Akiba understood that this tuition reduction could potentially cost them several million dollars in lost revenue. How could they make up for this lost tuition revenue? The answer was clear; they would utilize their endowment.
Over the last two decades, Sinai Akiba has amassed a nearly $30 million endowment, thanks, in part, to its participation in Generations, a community-based endowment building program run by PEJE (now part of Prizmah). Sinai Akiba was one of seven participating Los Angeles schools that benefited from this community-based approach to endowment building. To quote Rebecca Kekst, a Sinai Akiba board chair, “We learned firsthand that having a large endowment is critical not only for long-term sustainability but also to help weather unexpected circumstances along the way.”
Communal Endowments Pay Dividends
Similar to Los Angeles, day school communities across North America are increasingly looking to endowments as one way to mitigate the high cost of tuition and to help ensure their financial sustainability. The existence of an endowment has been especially valuable to schools that made the decision to roll back planned tuition increases during Covid. Endowments also enabled some schools to provide even higher levels of tuition assistance without the need to reduce staff or sell hard assets.
Prizmah estimates that approximately 75% of day schools have an endowment, with a value totaling nearly $1 billion. Less discussed, but equally important, are community-based endowments, representing nearly $500 million.
Toronto is just one example of a community that has utilized a communal endowment as a source of funds for tuition subsidies for its day school families. (See the article by Daniel Held in this issue of Kaleidoscope.) Over the last five years, Toronto’s Generations Trust, a community-based endowment-building program, has raised over $100 million. Income from the trust enables several Toronto day schools to offer lower tuition rates to middle-income families. In the case of TanenbaumCHAT, Toronto’s Jewish high school, every school family benefited from a 40% tuition reduction that was made possible, in part, due to endowment dollars.
Communal endowments in Montreal and in Greater Metrowest, New Jersey, have similarly provided critical funds for school affordability. With tens of millions of dollars in communal funding, Montreal schools are able to offer middle-income families significant tuition reductions. The Montreal program has provided hundreds of middle-income families with a more affordable tuition level. The Greater Metrowest N.J. Day School Initiative has supported each of the four Jewish day schools in the community to be able to offer its own, customized middle-income tuition program.
At least half a dozen additional communities across North America are considering a communal endowment program. For some, a communal endowment is seen as a way to attract funders who would prefer to give to a group of schools rather than an individual one. For others, a communal endowment is a way to galvanize Jewish day schools in their community and to get a group of otherwise independent entities to work together for a common good and cause. It is also a way for schools to learn from one another and to adopt a series of best practices in fundraising.
Prizmah's Partnership in Endowment Building
Over the next few months, Prizmah is expanding its work in the field of endowments. Our work will focus on school-level endowments as well as communal endowments. We are exploring ways in which incentive funds might help catalyze new endowment gifts or increase existing ones to individual schools or communities. The Prizmah team is ready to work with your school and your community to strengthen your capacity for endowment building. We are positioned to work with federations, foundations and other central agencies to support your work in development of communal endowment funds.
Today, there are more than a half dozen communal endowment funds throughout the US that provide millions of dollars each year toward initiatives such as school excellence, middle-income affordability, and enrollment management. Please reach out to Prizmah to discuss ways in which we can help your school and your community build its endowment.