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Amy is Prizmah's Senior Director of Catalyzing Resources

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Dan is Prizmah's Senior Director of Prizmah School Services

Endowments: It’s Time

By Amy Adler and Dan Perla

Over this past year, Prizmah’s work in the area of school advancement shifted to meet the urgent needs of the field during the pandemic. Much of our work was in response to supporting schools to adapt their fundraising strategies to a virtual environment, navigating the challenges of recruitment and enrollment during an economic crisis, and adapting financial plans to address growing tuition assistance needs as well as addressing the issue of increased Covid-related school costs. With these rapid changes, many schools had unforecasted expenses; there was an immediate need for fundraising to offset these expenses.

A survey Prizmah recently conducted to collect data about fundraising reported that donors, federations and foundations rose to the challenge in support of operating funds for our schools. Eighty-six percent of major donors gave the same or increased their contributions, and 75% of contributions from other donors remained steady or increased since March of 2020. Much of the increase was due to the COVID crisis and a willingness among donors to provide emergency funding.

Schools are understandably concerned that annual fundraising may decline once the urgency of COVID has diminished. Not only is tuition assistance likely to remain at historically high levels, but many of the COVID-related expenses (smaller class sizes and more staff) that schools are experiencing may continue for years to come.  The larger question many are asking is how can schools sustain this level of fundraising in the longer term? 

One answer is endowment. In the midst of a pandemic and the pressing fundraising needs to support rising staff and school related expenses, it may seem daunting to think about or even begin an endowment campaign. However, endowment is a mechanism for long-term financial sustainability. The existence of an endowment has been especially valuable to the schools that made the decision to lower tuition or roll back planned tuition increases.  Endowments also enabled some schools to provide even higher levels of tuition assistance without the need to reduce staff or sell assets.

According to Prizmah’s survey, 75% of respondents indicated that they have an endowment. The mean endowment size is $7.4 million and the median value is $3 million. Based on an average size school of approximately 300 students, the data suggests that the majority of day schools have an endowment per student of $1,000 or less. By contrast, many independent schools have endowments of $25,000 per student or more. Even more disappointing is  the fact that nearly half of day schools are not actively soliciting endowment gifts at the current time. 

The influx of public school students into Jewish day schools and yeshivas over the last year suggests that the value proposition for day schools has never been stronger. The extraordinary fundraising successes of the past year support this assertion. If ever there was a time for endowment building, the time is now. 

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 or increased endowment gifts 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 U.S. 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.