More on The Endowment!
Your guide to the Annual Fund and Parent Giving Day Why does The Lexington School ask for gifts to the Annual Fund every year when I already pay tuition?
How does the endowment factor into The Lexington School’s annual budget?
Like most independent schools, The Lexington School’s Board of Trustees sets tuition at a level that only covers about 80% of the cost of educating each student.
The Lexington School endowment was initially funded by the Board of Trustees to create an investment that would provide long-term financial stability for TLS.
The remaining 20% is covered through fundraising (the Annual Fund and CELEBRATION) as well as income from the endowment. (For more on the endowment, see the back panel of this booklet.)
Originally started in the 1980s, the endowment has grown over the past 40+ years. Ensuring the endowment can continue to be a financial resource for the school requires the Board to adhere to a spending policy. This policy is designed to make funds available for the budget while allowing for continued growth. The Board may draw 4-5% of the interest generated from the endowment each year. This year, the school budget will receive a little under $2 million from the endowment. All three revenue sources — Tuition, Fundraising, and the Endowment — are important in helping to keep a balanced budget while providing the exceptional Lexington School education!
Why don’t you just charge more for tuition? By building a budget that includes revenue sources beyond tuition, the Board of Trustees is able to help control tuition increases while ensuring the continued quality of The Lexington School education. Annual Fund gifts have the added benefit of providing a potential tax deduction to the donor that is not available for tuition payments. (Donors should consult their tax advisors to determine the deductibility of their gifts).