Andover The Annual Report of Phillips Academy Fiscal Year 2025
July 1, 2024–June 30, 2025
From the President of the Board of Trustees and the Head of School We are pleased to share Andover’s financial and state of the Academy report for the fiscal year ending June 30, 2025. This report includes program highlights and an overview of the operating budget and endowment performance. As you delve into this narrative, you will see that Andover is a complex institution that is incredibly well run—and expensive to operate. The Board of Trustees and school leadership believe strongly that transparency builds confidence in an organization. Understanding the fiscal health of the school is especially important to those who invest in our extraordinary people and programs. Now in its 248th year, Andover is always evolving to fulfill its mission to educate youth from every quarter. Today that means opening our doors to the most talented and promising students from across the United States and around the world—and supporting them with nearly $28 million in scholarship aid.
Students shape the purpose of everything we do. Students shape the purpose of everything we do. And we remain devoted to sustaining this remarkable education for them and for those who follow. This means hiring and developing world-class faculty and continually enhancing our academic and residential programs, knowing that students learn and experience the world in an entirely different way than previous generations. It also means stewarding a campus that, no matter what is built or renovated, always feels like home. In this era of rapid change, it means drawing strength from our values, especially knowledge and goodness, knowing that together they forge our highest standards of excellence. Sincerely,
Amy C. Falls ’82, P’19, ’21 President, Board of Trustees Phillips Academy Annual Report FY25
Raynard S. Kington, MD, PhD, P’24, ’27 Head of School Introduction
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State of the Academy 2025 Guided by its founding principles, Phillips Academy fostered transformational learning, holistic growth, and a community rooted in the ideal of non sibi. The following highlights from fiscal year 2025 illustrate these commitments in action.
Phillips Academy Annual Report FY25
State of the Academy 2025
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Mapping Andover’s Future The second year of long-range planning included the development of proposals across academics and residential life, with a focus on creating community and prioritizing student health and well-being. Led by faculty, the Learning Steering Committee continued its work guided by five cornerstones: Transformative education: Coming to Andover to change your mind—and to change others. Community connection: Helping students feel connected to one another and to Andover’s mission and history. Joy: Replacing the pressures of learning with the joy of learning. Clarity: Creating “guardrails” for the sake of well-being and depth—doing fewer things (which does not mean doing less). Meaningfulness: Emphasizing transferable skills, systems thinking, connections, and relevance in a rapidly changing world.
Phillips Academy Annual Report FY25
Five cornerstones— transformative education, community connection, joy, clarity, and meaningfulness— guided the ongoing work of the Learning Steering Committee. Recommendations to support and strengthen the teaching profession, revitalize the student experience, and run the school more efficiently and effectively will be forthcoming in the 2025–2026 academic year. Mission-centered proposals will focus on community connection, the academic and residential programs, grading and assessment, co-curricular activities, the faculty workload model, and fiscal sustainability.
State of the Academy 2025
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Milestones and Celebrations In September 2024, Andover dedicated the Gendler Peace Circle, a contemplative space near Cochran Chapel that honors Rabbi Everett Gendler P’83, ’86, the Academy’s first Jewish chaplain. Made possible by the generosity of alumni and community members, the space celebrates Gendler’s legacy of equity, inclusion, and civil discourse—reflected in every gathering and conversation within its granite spiral. Falls Music Center, the first new academic facility since Gelb Science Center was constructed over 20 years ago, opened in January 2025 and was dedicated in May with a concert featuring student and faculty musicians and Broadway star Carrie St. Louis ’08. Students, teachers, and guests have embraced this dynamic teaching and performance space from the moment its doors opened. State-of-the-art systems in music production invite innovation, while three concert halls and 19 practice studios inspire creativity and collaboration. With more than 94% of students taking part in classes or individual instruction at all levels, musical arts hold an important place in the curriculum. The Class of 2020 made history with their return to campus in June for their Fifth Reunion and to celebrate Commencement in person—a culmination of their Andover experience that they missed in 2020 due to
Phillips Academy Annual Report FY25
the pandemic. Clan MacPherson Pipes and Drums led the traditional procession, and Head of School Raynard Kington warmly welcomed the hundreds of alumni and families gathered in front of Samuel Phillips Hall. Jim Ventre ’79, interim head from 2019 to 2020, gave the keynote address, and John Palfrey P’21, the class’s first head of school, delivered a moving baccalaureate address.
Leadership Appointments Andover welcomed two new senior administrators to campus in spring 2025. Ben Temple was appointed dean of faculty, having previously served as head of the Upper School at Francis Parker School in San Diego. Temple is working closely with school leadership and the Learning Steering Committee on proposals that will shape Andover’s long-range planning. Patrick O’Conner was named Andover’s first chief information and technology officer. Formerly associate vice president for technology at Massachusetts College of Art and Design, O’Connor now leads Academy-wide information and technology initiatives, including legacy systems, emerging technologies, cybersecurity and risk management, and data and network infrastructure.
State of the Academy 2025
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Academy Advancement Each year, philanthropic support from generous and thoughtful donors elevates every facet of our learning community. From annual operations to capital projects to new endowments, these investments are critical to the school’s mission and vision for the future. Benefactors often designate their contributions and pledges to financial aid, academic endeavors, student programming, or other specific areas. Many others choose to make unrestricted gifts to the Andover Fund, allowing the Academy to direct these finances to where they are needed most. In fiscal year 2025, total cash gifts—including pledge payments received—tallied $36.7 million. This represents a 7% decrease from fiscal year 2024, which benefited from the remaining commitments to the Knowledge & Goodness campaign.
The number of donors in FY25 increased to 7,537, with more than 1,160 PA families and over 1,350 members of Reunion classes contributing to the final figure. Among the year’s key highlights, Falls Music Center opened in January 2025, with the official dedication in May. The stunning 30,000-square-foot facility was made possible through a transformational gift from Board President Amy C. Falls ’82, P’19, ’21, her husband, Hartley Rogers P’19, ’21, and their family—with more than 540 donors, including over 80 leadership benefactors, and the Academy investing the remainder to see the landmark project to fruition. Additionally, a new class of endowed faculty positions, Distinguished Academy Foundations, was established with gifts of $5 million each. They may be allocated to salute faculty excellence in teaching, coaching, or residential life—and represent a dynamic investment in education. Through these foundations, the Academy will recognize individuals who anchor the values at the heart of PA’s ethos.
Phillips Academy Annual Report FY25
The first Distinguished Academy Foundation will be introduced through a lead gift and challenge from Charter Trustee Keith Flaherty ’89, P’23, in tribute to retiring faculty member Lou Bernieri P’96, ’10. Meanwhile, a second Distinguished Academy Foundation has been created by the parent of an alumnus who wishes to remain anonymous. In January, Andover investors convened in New York for the Future of the Endowment Conference X. The semiannual event delves deep into the finances and budgeting of the Academy and features discussions facilitated by the New York-based Investment Office and the alumni-led Investment Committee, as well as the Office of Operations & Finance. More than 120 alumni and parents attended—and examined endowment performance and the fiscal road ahead.
State of the Academy 2025
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The Peabody Institute of Archaeology also embarked on the final stage of its historic renovation, with Andover supporters donating $4.7 million and counting. The Academy completed the collections housing revitalization for the 600,000-plus cultural objects in the Peabody’s care, and the new phase will address the institute’s ground and upper floors. The project will create optimal spaces for offices and programming, dedicate a consultation room for ongoing dialogue and repatriation with Indigenous partners, and expand the number of interdisciplinary classrooms from two to four. Lastly, in fiscal year 2025 the Academy continued to prioritize non-tuition financial aid—committing more than $2 million to Student Experience Funds, further bolstered by philanthropic support. Non-tuition financial aid strengthens Andover’s inclusive environment by funding everything from laptops, health care, and warm clothing to music lessons, athletic equipment, college application costs, Learning in the World travel, and more. Approximately 500 scholars annually benefit from Student Experience Funds, with these vital resources allocated discreetly to ensure equity for all. In May, female leaders from across the Academy community similarly gathered in New York for the first Founders’ Forum of the Andover Women’s Endeavor. This major development initiative emerged from the milestone celebrations honoring 50 years of coeducation at the school. AWE seeks to honor and advance the profound philanthropic impact women continue to have across campus life. Each of the more than 50 founders has invested over $100,000 to launch this venture, which will grow to embrace female donors at multiple giving levels and offer mentoring, networking, and other companion programs.
Phillips Academy Annual Report FY25
Philanthropy by the Numbers
7,537
$6.2M
$36.7M
$11M
Donors in FY25
Raised for the school’s mission
Contributed by PA families
Designated to the Andover Fund
State of the Academy 2025
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Admission and Financial Aid 2024–2025 The incoming class in fall 2024 was the 18th to be admitted under Andover’s need-blind policy, which removes financial need as an obstacle to admission. The Academy continues to rely on the generosity of alumni and parents to sustain its commitment to our needblind admission process. In addition to tuition and room and board, the school’s financial aid program also includes support for other essential items, depending on a student’s level of need. These items may include laptops, books, athletic equipment, warm winter clothing, and travel expenses. Participation in our signature Learning in the World programs on a fully need-blind basis is ensured as well.
Financial Aid Students receiving financial aid
Admission and Matriculation Admit rate
Overall matriculation rate
Matriculation rate for underrepresented students of color
Percentage of newly enrolled underrepresented students of color
13%
78%
83%
20%
Andover Welcomed 12 New Global Scholars in FY25
Average grant for returning students
Five Davis International Scholars (Jamaica, Germany, Ukraine, South Africa/Barbados, and Paraguay/Argentina) for a total of 12 scholars in the school year
Students receiving full scholarships
One Caroline D. Bradley Scholar for a total of 14 domestic CDB Scholars in the academic year
48%
$45,000 13%
For entrance in September 2024, Andover received 3,322 applications from 50 states and two U.S. territories and 114 countries, a 1% increase from 2023 to 2024. Of those applicants, 776 were underrepresented students of color. The 370 new students enrolled at Andover in the 2024–2025 academic year represented 32 U.S. states and 28 foreign countries.
Phillips Academy Annual Report FY25
Three Kemper Scholars (Hungary, Spain, and Sweden), one Crown Prince’s International Scholar (Bahrain), one Thai Scholar (Thailand), and one Keio Scholar (Japan) Each of these scholars helps enrich the geographic diversity of Andover’s student population.
State of the Academy 2025
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Academy Financials Phillips Academy fulfills its mission and upholds its values by investing in students, faculty, and staff—and its robust programs. This section highlights PA’s financial health in fiscal year 2025 with reports on operating revenue and expenses and the endowment. Solid endowment performance combined with the continued generosity of alumni, parents, and friends gave rise to another strong year for the Academy.
Andover Annual Report FY25
Academy Financials
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Operating Revenue and Expenses Philanthropy continues to be the Academy’s largest source of revenue, accounting for 52% of its total income. The draw from the endowment contributed $66M and donations to the Annual Fund added another $12.8M. Andover also received $19.2M in new gifts into the endowment, which adds to the endowment’s level of support in future years. Combined with the endowment’s performance, this led to an effective endowment draw rate of 5% for FY25.
FY25 Revenue in millions Net Boarding Tuition Other Income Summer, Outreach, LITW & Other
12% 36%
Net Tuition
52%
$13
Philanthropy Endowment Draw
On the expense side, overall employee compensation increased by 6%—in large part due to the rising cost of health insurance, which increased by over 10%, and the increase in cost of other employee benefits. Inflation and tariffs impacted goods and services expenses, and we also saw a substantial increase of over 13% in utility costs.
$41
Other Income
$13
Annual Fund
The remainder of the Academy’s revenue came from net tuition, Summer Session programs, and other smaller sources, such as Learning in the World programs and the sale of a property on the periphery of campus.
Benefit costs increased by 10.5%, primarily due to higher health insurance premiums, and utility costs rose by more than 13%.
$10
$7
$66
Net Day Tuition
FY25 Expenses in millions Salaries & Wages Debt Service
$6
Facilities & Tech Renewal
$19 Infrastructure
Utilities
$5
17% $57 54%
29% Goods & Services
$37
People
Operations
$21 Benefits
Phillips Academy Annual Report FY25
Academy Financials
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Balance Sheet The Academy finished FY25 in a strong financial position. The return on the endowment was 9.1%, which increased its value to over $1.47B. (Additional information can be found in the endowment section of this report.)
Behind the endowment, the Academy’s physical plant is its second largest asset—and continues to remain a focus of the Board of Trustees.
The Academy started FY25 with $141M in total debt. However, a portion of that debt was refinanced earlier in the year and the Academy began to pay off the principal on its overall debt, enabling the Academy to start FY26 with an overall debt at $133M. The entire debt is scheduled to be paid off by 2052.
The Academy has continued to increase its investment in facilities renewal to help address its deferred maintenance backlog.
Endowment Budget Impact Fiscal Year Ending June 30
2021
2022
2023
2024
2025
Endowment Value (millions)1
$1,438.8
$1,302.8
$1,322.5
$1,407.4
$1,477.5
Endowment Draw for Operations (millions)
$50.4
$47.1
$50.4
$58.7
$65.8
Total Operating Expense (millions)
$105.8
$114.8
$125.2
$136.0
$145.1
Operating Draw as a Percentage of Total Operating Expense
47.6%
41.1%
40.3%
43.2%
45.3%
Additional Draws from Endowment2
$1.2
$43.6
$1.9
$1.6
$1.8
FY23
FY24
Endowment Growth in millions $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 -$200
FY16
FY17
Endowment size start of fiscal year
Phillips Academy Annual Report FY25
FY18
FY19
Endowment performance
FY20 Endowment gifts
FY21
FY22 Endowment spending
FY25
Endowment size end of fiscal year
Academy Financials
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The state-of-the-art Falls Music Center opened in January and continues to inspire student and faculty musicians as well as those attending performances. Renovations are underway at the old music facility, Graves Hall, which will soon become an administrative building housing finance, human resources, and other campus departments. The relocation of those departments in late 2025 will clear the way for renovations in George Washington Hall to make it a more student-centered building. In addition, the Academy has continued to increase its investment in facilities renewal to help address its deferred maintenance backlog.
From FY22 to FY26, the facilities renewal budget has risen from nearly $7.5M to $18M—an increase of over 125%.
Phillips Academy Annual Report FY25
Endowment by Donor Designation in millions Financial Aid Outreach Addison & Peabody Annual Fund Campus Maintenance Other Restrictions
$78 $40 $21 5% 3% $57 2% 4%
$477
$153
32%
10%
$183 12%
Foundations & Instructorships
$142
Salary & Development
10%
$326 22%
General Purposes/Unrestricted
Academy Financials
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Endowment Performance Andover Endowment at a Glance at Fiscal Year End, June 30, 2025
$1.5 Billion
9.1%
Market Value of the Andover Endowment
FY25 Portfolio Return on Endowment Fund
Performance Review The Andover Endowment returned +9.1% for fiscal year 2025. The Academy continues to materially outperform traditional liquid benchmarks (MSCI ACWI/Barclays Aggregate portfolio) over the long term at lower volatility. However, because Private Equity and Venture Capital (PE/VC) meaningfully lagged strong public equity markets for the past three fiscal years, Andover and most larger endowments have recently underperformed those traditional benchmarks. Given Andover’s high budgetary reliance on the draw, the endowment continues to maintain a defensive posture relative to peers, which will serve as a headwind when the equity market rallies, as it did during FY25.
Long-Term Endowment Performance vs. Benchmarks as of June 30, 2025
Institution/Benchmark Type
1-Year
3-Year
5-Year
10-Year
10-Year Vol
Andover
9.1%
8.0%
9.4%
7.7%
8.0%
Cambridge Associates $1B+ Endowment & Foundations3
11.0%
8.6%
10.7%
8.2%
N/A
Cambridge Associates Endowment Composite
11.0%
9.9%
10.1%
7.5%
N/A
60/40 MSCI ACWI/Barclays Aggregate
12.1%
11.4%
7.9%
6.9%
10.0%
MSCI All-Country World Index
16.2%
17.4%
13.7%
10.0%
14.9%
S&P 500 TR
15.2%
19.7%
16.6%
13.6%
15.5%
Barclays Aggregate Bond Index
6.1%
2.6%
-0.7%
1.8%
5.0%
3
4
Source: Phillips Academy Investment Office, Bloomberg, and Cambridge Associates
During this period, the endowment portfolio was well served by our secondary sale that closed in March 2022 and divested 25 non-core PE and VC funds. The reduction of PE/VC exposure subsequently benefited Andover’s relative performance as sale proceeds were reinvested into public equities to maintain the
Phillips Academy Annual Report FY25
endowment’s target allocation to Total Equity. The endowment’s improved liquidity position also enabled the Academy to maintain consistent participation in what may prove to be attractive vintage years for PE/VC capital deployment, laying the foundation for the next decade of endowment returns.
Endowment Performance
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Endowment Performance by Strategy vs. Benchmarks 10-Year Performance as of June 30, 2025
14.0%
14% 12%
10.5%
10% 8%
7.8%
7.7% 5.4%
6%
4.4%
4.3%
4%
1.9%
2% 0%
Marketable Equity
PE
PA
Market Benchmark5
Total Equity
Absolute Return
Real Assets
Fixed Income & Cash
Total Diversifying
Total Endowment
Policy Benchmark (current)6
Source: Phillips Academy Investment Office, Bloomberg, and Cambridge Associates
For the 10-year period shown, the endowment has been in line with the blended policy benchmark6 and outperformed the traditional liquid 60/404 MSCI ACWI/Barclays Aggregate. PE has been the strongest category over the long term, despite more recent lackluster performance. Most asset class categories, including PE, Absolute Return, and Real Assets, have outperformed their benchmarks, while Marketable Equity is in line. The Marketable Equity portfolio was hurt by an under-allocation to strong-performing U.S. markets during much of the past 10-year period as well as by poor performance of growth-focused U.S. long-only managers in FY22 following abrupt rate hikes that year. Our Public Equity allocation was restructured in recent years to have a better underlying geographic and factor balance.
Phillips Academy Annual Report FY25
Endowment Performance
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Long-Term Performance Objectives The long-term goal to preserve or grow the endowment’s real purchasing power into the future requires achieving nominal returns that meet or exceed the Academy’s annual draw rate plus inflation. The challenge of this compounding high nominal return hurdle is reflected in the chart below.
Growth of $100: Andover Endowment vs. Benchmarks and Key Hurdles 20 Years through June 30, 2025 500
Sustainable Draw
Nominal Net Draw + > = Return Inflation
Growth of Value from $100 Base
400
300
200
100
0 2005
2006
2007
2008
Endowment
2009
2010
2011
2012
60/40 MSCI / Barclays Agg
2013
2014
2015
2016
MSCI ACWI
2017
HEPI + 5%
2018
2019
2020
HEPI + 4%
2021
2022
2023
5% Draw
2024
2025
4% Draw
Source: Phillips Academy Investment Office, Bloomberg, and Commonfund for HEPI (Higher Education Price Index)
The dark blue line in the chart above shows the cumulative value of $100 as if it were invested beginning 20 years ago, based on actual nominal returns of the Andover Endowment, compared to the nominal return required to meet the draw range (gray lines) plus the actual inflation impact (the aggregate inflation-adjusted hurdle represented by green lines). The Andover Endowment has met this hurdle over the longer term, but for periods of time may lead or lag this objective. Thoughtful portfolio construction is key, particularly for endowments that distribute a draw each year.
Phillips Academy Annual Report FY25
Endowment Performance
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Asset Allocation Andover’s portfolio strives to effectively balance the need for growth with the importance of mitigating losses, enabling the endowment to sustainably provide the annual budget funds on which the Academy so heavily relies. Allocation to various forms of equity exposure, including liquid U.S. and International Equity and Hedged Equity as well as illiquid Private Equity and Venture Capital, helps the Andover Endowment achieve strong long-term returns.
Additionally, diversifying strategies, including Cash and Fixed Income, Real Assets, Absolute Return, and Tail Hedge, all help to mitigate the impact of equity market downdrafts and provide balance throughout different market environments. Having increased the total equity target since 2021, the Academy’s endowment asset allocation looks similar to many larger endowments at a high level, though with currently less illiquid PE/VC exposure than many of our largest peers.
Asset Allocation History as of June 30, 2025 100%
Fixed Income & Cash
90%
Tail Hedge
80%
Real Assets
70%
Absolute Return Funds
60%
Secondary Sale7
50%
Equity Exposure
40%
Equity Target4
30%
Private Equity Hedged Equity
20%
International Equity
10%
U.S. Equity
0% 2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
Source: Phillips Academy Investment Office
Phillips Academy Annual Report FY25
Endowment Performance
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Endnotes 1. The Endowment Value represents the value as of the audited financial statement cutoff date, August 31. It may not include all final valuations for the fiscal year ending June 30. 2. Represents additional draws from the endowment beyond the operating draw, in accordance with endowment fund terms. The 2022 value includes a board-approved extraordinary draw of $42M. 3. As of October 24, 2025, median of the Cambridge Associates $1B+ Endowment & Foundations peer group (sample set 131–141 reported, depending on the time period) and Endowment Composite peer group (sample set 365–398 reported). 4. Andover switched at the end of FY21 from a 60/40 to 65/35 benchmark comparison, along with the target asset allocation shift to 65% equity. 5. Market benchmarks: MSCI ACWI for Total Equity, Barclays Aggregate for Diversifying, and 60/40 ACWI/Aggregate for Total Endowment. 6. Policy benchmarks have evolved for marketable equity over the years. Current policy benchmarks shown are as follows: • Marketable Equity: 0.8x MSCI ACWI • PE/VC: blended Cambridge Associates benchmarks based on actual PA PE/VC allocations • Absolute Return: HFRI RV: Multi-Strategy Index • Real Assets: 50/50 NCREIF Property Index (for Real Estate) and Bloomberg Commodities Index (for Natural Resources) • Fixed Income & Cash: 50/50 Barclays Aggregate and 3 Month T Bills respectively Subtotal and total blended benchmarks are aggregated based on PA actual historical target weights of subcategories. Though not included in either the Equity or Diversifying subcategories, PA’s Total Endowment returns include the cost of Tail Hedge since the program began in April 2021, and the Total Endowment benchmark includes a comparably sized 3-, 6-, 9-, and 12-month 20% out-of-the-money ACWI put ladder. 7. A secondary sale of legacy private equity fund positions, with a reference date as of September 30, 2021, was closed March 31, 2022.
Phillips Academy Annual Report FY25
Endowment Performance
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Phillips Academy Board of Trustees 2024–2025 Amy Falls ’82, P’19, ’21 Charter Trustee, Board President
Aisha Jorge Massengill ’88 Alumni Trustee
Chris Auguste ’76, P’09, ’12 Charter Trustee
Carlos Montemayor ’92, P’23, ’27 Charter Trustee
Robert Barber ’68, P’03 Alumni Trustee
Uche Osuji ’91 Alumni Trustee
Gil Caffray ’71, P’20 Charter Trustee, Treasurer
Loyce LaShawndra Pace ’95 Alumni Trustee
Amy Christodoulo ’98 Charter Trustee
Allison Picott ’88 Charter Trustee
David Corkins ’84, P’25 Charter Trustee
Tamara Elliott Rogers ’70 Charter Trustee
Sanjiv Desai ’89, P’24 Alumni Trustee
Stacy Schiff ’78 Charter Trustee
Anna Durham ’78 Charter Trustee
Michael Schmertzler ’70, P’05, ’07 Charter Trustee
Keith Flaherty, MD, ’89, P’23 Charter Trustee
Henry Smyth ’88 Charter Trustee
Drew Guff ’79 Charter Trustee
Kent Strong ’89, P’27 Alumni Trustee
Raynard Kington, MD, PhD, P’24, ’27 Head of School, Clerk of the Board
Yichen Zhang ’82, P’18, ’20, ’25 Charter Trustee
Tristin Batchelder Mannion ’82, P’19 Charter Trustee
Eric Zinterhofer ’89, P’18, ’19 Charter Trustee
Phillips Academy Annual Report FY25
Phillips Academy Board of Trustees
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