Greensboro Day School Finance FAQs
When asked to share why families choose an independent school education - and, Greensboro Day School in particular - the answers are revealing and speak to the heart of our school:
- a challenging academic program
- great faculty who know their students and develop their potential
- a safe environment
- a culture where relationships, trust and respect are welcomed and nurtured
- incredible extra-curricular programs
Our families, teachers, administrators and volunteer leaders embrace GDS’s core values, and have chosen to be part of GDS, a community filled with tradition and steadfast relationships. GDS families recognize that the challenge of providing the best possible education for their children is made better in an institution that mirrors their family's values.
Families today are faced with some hard decisions about financial priorities, as are those individuals who make the financial decisions for GDS. The choices we make with our financial resources are a reflection of our values and our commitment to providing the best education for students.
Unlike public and charter schools, Greensboro Day School (GDS) does not receive funding from taxes. Additionally, as a non-sectarian independent school, GDS does not receive support from any religious group. We are completely responsible for funding our educational, arts and athletics programs.
GDS is a non-profit 501(c)(3), and as such, we are exempt from paying federal and state income taxes; charitable gifts made to the School are tax-deductible, to the extent allowed by IRS law.
Current families pay for the majority of the costs of their child's education through tuition and voluntary philanthropic support. Each student who attends GDS also benefits from the generosity and hard work of the families and community friends who preceded them.
After 43 years, GDS supports a mature development (fundraising) program. Our goal is to maximize long-term voluntary financial support through fundraising and stewardship programs, and to encourage donors to make GDS a priority when considering charitable contributions. Our development program is part of the Advancement Office and is the clearinghouse for all fundraising activities. The development program is staffed to raise funds for GDS through ongoing programs in annual and planned (major and deferred) giving from individuals, corporations and foundations. Periodically, the Board of Trustees will authorize a specific timeframe for a Capital Campaign to raise additional funds for new construction, building renovations, land purchases or endowment needs.
The Head of School (Mark Hale) has the ultimate oversight for the finances, along with CFO Pam Hemphill, CPA, within the policies set by the Board of Trustees. An independent audit firm performs an annual audit of the School's financial statements after each fiscal year, which runs July 1 through June 30. Two Board volunteer committees are involved in financial budgeting, reporting and policies: the Finance Committee (David Brown, chair) and the Audit Committee (Pat Burns, chair). A subcommittee of Finance, chaired by J. Scott ‘90, oversees our investments. Skilled local accounting, banking, and financial professionals volunteer their time to serve on these advisory committees.
The 2013-2014 operating budget of $15.5 million funds GDS operations. Included in the operating budget are such diverse items as staff salaries and benefits, instructional expenses, campus maintenance, extracurricular programs and technology expenses.
The Head of School and senior administrators prepare a budget based on program needs (submitted by the faculty) and estimated enrollment for the coming year. This recommendation is reviewed by the board Finance Committee. The committee then submits the proposed budget to the Board of Trustees for further review and approval at the February Board meeting in order to set tuition for the following school year.
This committee is made up of trustees, senior administrators, past trustees, and parents and includes current and former professionals in finance-related fields. This group understands the mission of GDS, and is committed to providing our families with the best value for their tuition dollars.
2013-2014 Finance Committee Members:
David Brown, Chair
Fran Tewkesbury, Board Chair
Pam Hemphill, CFO and liaison
The budget as presented is examined closely for reasonableness and conservatism. The process includes reviewing comparisons to our state and regional peer schools and various Board- and committee-established benchmarks for expenses and teacher salary increases. Tuition increases at local and regional competitors are also examined. The goal is to fund the things that support the essential mission of the school, while bearing in mind the expense to GDS families and the economic realities of our community. This committee spends many hours in meetings, especially in January and early February.
Roughly 77% of our budget is made up of faculty, administrative and staff salaries and benefits.
Faculty: Our excellent faculty and low student-to-teacher ratio are keys to the educational value we provide. GDS competes for faculty talent with public schools and with other independent schools. In order to attract and retain the best teachers, the Board has set a parity formula for compensation that keeps us at rough equivalence or above with the salaries offered by NC schools and local and regional independent schools.
Administrative: Our administrative salaries are benchmarked against regional and national salaries using data from the National Association of Independent Schools (NAIS) and our peer schools in the Index Group. Senior administrators' salaries are reviewed by the Executive Committee of the Board and must meet rebuttable presumption guidelines as provided by the IRS.
Staff: Staff salaries are determined by using data from national organizations as well as local comparisons.
In all cases, Greensboro Day School works to make certain that its salaries are competitive so that we can attract and retain the best possible professionals in every position. Healthcare and benefit costs continue to rise faster than the overall inflation rate and impact our budget. To ensure cost-efficiency to the School while providing competitive medical and retirement benefits to employees, we annually review our benefit package and adopt adjustments and changes as needed.
General and administrative costs are benchmarked against industry standards and are constantly scrutinized for savings and value. The goal is to fund the things that support the essential mission of the school, while bearing in mind the expense to GDS families and the economic realities of our community.
The administration has undertaken a program to evaluate overhead costs and expenses in each division in an effort to assure that tuition dollars are being spent wisely. This program resulted in significant savings of 3.8% in non-instructional expenses since 2009. This concerted cost-containment effort, put into place by the administration and supported in each division and at every cost center, has kept tuition increases at the absolute minimum, especially over the past four years.
In 2013-2014, approximately 93.55% of the School's operating revenue will come from tuition. Other sources of income are the GDS annual fund (3.72%), investment income including endowment (1.93%), and auxiliary activities (0.8%).
25% of students at GDS received financial aid grants in the 2013-2014 school year, comprising one out of four students. The average grant per student is $11,500. The financial aid committee, made up of qualified school administrators, endeavors to spread aid evenly across each grade level.
A student desiring financial aid must go through the standard need-blind application process and be admitted to GDS before applications for financial aid are considered. The financial aid application process begins with submission by the family of financial information to the Financial Aid for School Tuition (FAST) service, which computes the family's need and ability to pay based on the financial information submitted. If financial aid dollars are available, GDS grants are made based on 95% of the family's need (i.e., GDS requires a family to pay slightly more in tuition than the FAST system determines it is able). For purposes of computing need, the potential income of non-working spouses and income of stepparents are considered, and expenses of club memberships, second homes, hobby businesses and depreciation are assumed available to pay school expenses.
In 2013-2014, $2.6 million in financial aid is provided to students, with first priority being given to returning families. Like many of our peer schools, GDS increased financial aid granted in recent years to accommodate and retain current families who are struggling with the economic downturn, as well as to offer enrollment to new students who qualify for admittance and financial aid. In light of current economic pressures and the desire to offer a full program at each grade level, the Board continues to monitor its established goal of providing financial aid. It is important to note that students who cannot pay full tuition still contribute revenue and help us cover expenses above costs.
Greensboro Day School does not award athletic scholarships. Every GDS family is eligible to apply for need-based financial aid through the Admission and Financial Aid Office. Priorities for awarding financial aid are guided by policy and give no recognition or preference to a student's athletic interest. Families are attracted to our school for a wide variety of reasons including the strength and success of our academic program, our college acceptance record, our arts programs and our athletic programs. We welcome all interested families to apply to our school. A strong, need-based financial aid program ensures students can attend GDS regardless of socioeconomic status.
Tuition paid to Greensboro Day is generally not tax deductible; however, some extended family members of students may find there are tax advantages to paying a student's tuition directly to the school and should contact their tax advisor for more information. There may also be a tax benefit associated with childcare below kindergarten (BB& JK). IRS regulations prohibit schools from accepting charitable gifts that designate specific students to receive them; to do so would jeopardize the school's tax exempt status.
The Annual Fund First is a yearly campaign for unrestricted gifts that is crucial to help meet annual expenses. Parents, alumni, faculty, grandparents and friends are asked to make voluntary contributions to GDS a priority in their family's charitable giving. The Annual Fund helps make up the difference between what tuition covers and the actual cost of operations. Success of this standard independent school finance model depends upon every family's annual commitment to make a charitable gift to the school commensurate with their level of ability.
Annual Fund contributions are not segregated or restricted for certain purposes such as field trips, educational speakers or class parties. The dollars given to the Annual Fund finance the basic operations of the school —teacher salaries, grounds maintenance, the arts program, athletics, teacher education, the computer help desk, libraries, admissions office, the school nurse, and more. Every aspect of the School is directly affected by the Annual Fund's success in meeting its goal. GDS is known among its peer schools as having one of the most successful parent annual funds.
This year’s Annual Fund First chairs are Marianne and Jim Bennett, parents of James '16 and Meg '19.
We believe that the FIRST charitable gift or pledge commitment you make to GDS each year should be to the Annual Fund First campaign. This is a policy supported by the Board of Trustees, the faculty and the Parents Association in the best interest of our students and teachers. We endeavor to limit the number of times our parents are asked for contributions, asking that parents make their commitment to the Annual Fund first, as we depend on it for funds to pay our operating expenses.
Tax-deductible contributions to the Annual Fund allow us to keep tuition increases low and enable families who could not otherwise afford a GDS education to send their children here. Independent schools locally and nationally budget for philanthropic contributions and a tuition gap, making the cost of an independent education accessible to more families. The Annual Fund helps GDS fulfill our commitment to our mission and be good stewards of our community values
We are very grateful for the time our volunteers give our children. Without their help we could not continue to provide the quality educational program that we do now. Gifts to the Annual Fund are important and necessary to maintain and support that quality program.
Pledge payments are due no later than June 30, 2016; however, pledges paid off earlier in the fiscal year provide a much-appreciated cash flow source for School expenses. Pledge payments may also be made through installments or by charging a credit or debit card.
GDS owns outright most of our land and buildings as well as land contiguous to our campus, guaranteeing options for future programs. We own all but one of the houses that back up to us on Lake Brandt Road between our campus and Lake Brandt Baptist Church. We also own most of the land north of us on Lake Brandt Road up to the North Beech neighborhood, along with the Elingburg baseball field and residential properties on the northeast corner of Lake Brandt and Kello Drive and Kingsland Drive to our south (adjacent to our new tennis courts.) All of the houses as well as the church are leased, providing additional income for GDS. The administration and a trustee Buildings & Grounds committee, chaired by Trustee Robert Smith, oversee the physical plant and properties.
Through the years, generous donors have established permanent endowment funds at GDS. An endowment is a fund of money, the principal of which is held in perpetuity and invested, and from which an organization may use only the return on investment. That is the formal definition. In the simplest terms, endowment is the school's savings that provides a source of income in addition to tuition, fees and annual funds.
Endowment earnings from educational institutions with millions and even billions in endowments – Harvard and Yale among them – provide about one-third of their operating budgets. Like many younger independent schools, GDS has a permanent endowment of less than $10 million, which provides earnings to fund less than two percent of operating expenses. It is obvious why GDS and other independent schools are much more dependent upon tuition, fees and annual giving to balance annual budgets.
In 2002, when GDS made growing endowment a priority, our endowment funds totaled $2.5 million. As of June 30, 2013, donor-restricted and board-designated endowment funds totaled almost $9 million. This year from its endowments, GDS will bring into its operating budget $298,000, based upon the Board spending policy. Four and a half percent (4.5%) of the Fund's three-year December 31 average market value will be used for operations. Consistent with other schools with similar-size endowments, this important source of funding typically provides 1.5-2% of the operating budget.
GDS donors generously stepped up for the Generations Campaign (2008-2014) committing over $7.1 million to construct the Lake Brandt Road entry, new tennis complex, the Bell Family Middle School building, auxiliary gymnasium, and central quadrangle. The Greensboro Day School community was asked to make the school a priority in their multi-year giving plans and some families will be fulfilling their pledges over the next few years. Another capital campaign will be considered when there is sufficient financial support and enthusiasm. Capital needs include (not in any priority order) a backstage workshop and bathrooms for the theatre, carpool lanes and parking on the Lake Brandt Road side of campus, and building permanent endowment funds.