Dear Parishioners, +JMJ
We had a finance council meeting this past week, and with this bulletin letter I really want to focus primarily on what is happening with school finances – i.e., the vision. This is because I’ve gotten some feedback that makes me believe there’s still some confusion in the wider parish community about the financial vision of the school. I have tried to include snippets of school finances for the past several years, but hopefully this letter can present it all as a whole vision.
Let’s start with the school subsidy from the parish. The subsidy is the amount the parish has to pay to keep the school going each year because the school itself does not bring in enough income to stay open year after year. When I began at the parish in July 2014, almost 70% of all of our parish income (from all three campuses combined) – Sunday and holiday collections primarily – was going to support Divine Mercy School. I have a feeling that most parishioners did not even know this fact. The parish has had to foot this much of the cost of the school, because the school was only charging about $1,100 per student for tuition each year. But it was actually costing the parish over $4,650 per student per year to educate each student. So, the parish for years has had to make up the difference. This difference is what we call the “subsidy” from the parish towards the school.
It’s also worth knowing that more than half of the students in the school do not belong to our parish, and many are not even Catholic. Not enough parishioners send their children to our school to keep it open, so years before I arrived the parish also began welcoming students who do not belong to our parish, and some of whom are not even Catholic. So, what happens – sooner than later – in a small country parish like ours that is trying to keep up maintenance on three times the buildings of a normal parish with our population (since we are three campuses, yet without the large population of three churches)… Sooner than later, we end up asking how long we can keep up the outreach that is our school. I say “outreach”, because in more than half the cases we are not educating our own children. In other words, we are reaching out to the wider community, even the non-Catholics, and educating them.
And, let me say very bluntly that we are educating them very well. We have an amazing team of teachers who are wonderfully dedicated to their students. And, together, we have a vision for Catholic education that seeks to be academically on the cutting edge as best as we can be, always with the light of Jesus Christ, from the Heart of the Church, guiding us to form our students intellectually and spiritually and in character to be the most outstanding disciples of Jesus Christ and citizens of the USA that they can be. Our vision is not at all minimal!
Our goal financially is to make the school as independent as it can be, so that we never have to ask a question about whether we can afford “this outreach” that is Divine Mercy School. Over the past four years, we’ve reduced the parish subsidy from almost 70% of our parish income to 39%. We anticipate the subsidy to continue to decrease but we will not have the final figure until the fiscal year end report. A healthy goal for a school that is educating its own children would be 20% of our income going to the school. I would like to suggest that we make the school stand as financially as independent as possible. I would love to see a 5% subsidy. That means only 5% of all of our income – primarily counting Sunday and holiday collections – would go to the school. That is more like a “social outreach tithe”. But I realize that might be a dream unreachable. Here are the sources of income now for our school:
Our Parent Teacher Organization does fundraisers every year which primarily focus on reducing some of the extra costs for families who attend and financing some wonderful extra-curricular events for students and faculty throughout the year. There are some cases where PTA money helps to fund special projects such as $6,000 paid this year for Mr. Grant’s new desks and they will be contributing funds towards the office and library renovations. Their contributions are greatly appreciated but their funds never go towards normal operating expenses that the parish incurs for the school. The balance for the PTA account at the end of the fiscal year will be around $9,000 and the PTA always has control of this money.
Our income from tuition receipts has gotten much better over the past four years. We have matched tuition with actual cost to educate, so tuition for a year is now $4,650. Being real about that amount means that more families are able to gain financial aid from Ed Choice State Scholarships. And we have also tapped into other financial assistance for families, such as the Jon Petersen scholarships for children with special education needs. (From parish funds we offer scholarships to lower tuition costs for active Parishioner families and active Non-Parishioner families along with a family discount for multiple students, which makes us still one of the least expensive schools in the entire Diocese.) It is primarily this restructuring of our tuition system that has lowered the parish subsidy from almost 70% to 39% in four years.
Next we have our School Endowment. Recently I heard that people are saying that we have all this money in the
school endowment that we could be using, but we refuse to do so. Let me clarify this misconception, the endowment was set up years before I came to the parish, and the by-laws of the endowment forbid the pastor from using the principal in the endowment. The whole purpose of an endowment is to build up a huge sum of money that produces great interest, so that the institution can benefit greatly from the interest on a consistent basis each year. It would be totally contrary to the endowment by-laws, and totally defeating of the whole purpose of the endowment, to try to spend the principal from it and whittle it away to nothing. The whole purpose of an endowment is to build a huge sum that yields significant interest each year – which you can then spend on school needs. Our goal is to build the endowment as big as possible, so there can be one more source of stable funding for the school for many years to come. I hope that our parishioners really think about leaving the School Endowment money from their own estates. Currently, the School Endowment is only at about $121,000; so it really doesn’t yield much interest yet. (This is also because we have invested very conservatively, so as never to lower the principal of the endowment.)
What financial benefits do we gain from the School Endowment now? The endowment portfolio is broken into about five individual investment tools. A couple of these investments yield interest on a yearly basis, and a few of the instruments yield interest on a bi-annual basis. So, for example last year the endowment yielded only about $1,800, which we put towards a specific school improvement that included new classroom desks. This coming November, the Endowment committee will meet to talk about how best to use about $7,000 of interest which we expect the endowment to yield, because the other three investment tools which are bi-annual will yield some more income for us than we got this prior year.
Bottom line, the school endowment helps us a little bit each year, but not very much yet. I hope our parish community and even friends of the school beyond our immediate community give abundantly to the School Endowment, so that we have literally millions in it, which can yield a yearly interest for us. (Imagine being able to pay our teachers the salaries they deserve – and retain them – because we can actually afford it!!) It is only the yearly interest that we can use, and that’s what the bylaws of the endowment permit. It’s totally contrary to the logic of an endowment to break into the principal and start spending it. Please give millions to the School Endowment!
So, there are the sources of income we have had for the school up to today.
Now, my most recent idea was to begin an Alumni Association. This was a brainstorm that came from a non-parishioner, yet a relative of a school family, who in our parking lot one day after an event mentioned all the alumni who are out there who could help us accomplish our mission in the school. (Wow! You never know how a short line of yours can set inspiration into this pastor!) Every school I have been part of for decades has had an Alumni Association. It just never dawned on me to start one for our school. The primary mission of an Alumni Association is to raise money that can be put towards every aspect of the school. Yes, it goes to specific improvements each year, which we can highlight in our promotional materials. But it also goes to any cost the school incurs whatsoever. I truly hope that alumni and friends of the Alumni Association give generously to school each year, in such a way that the parish subsidy can be reduced directly, since income through the Alumni Association can cover so many costs. The school absolutely needs sources of beyond-tuition income in order to remain financially vibrant for many years to come. I really think the idea of an Alumni Association was straight from the Holy Spirit, through a humble friend of the school. And I’m grateful for this. And, I am very, very grateful for our Alumni Association Committee that has done so much efficient and effective work to put together an impressive list of alumni from around the country, and some beautiful promotional materials. Our first alumni mailer is about to go out as I write these words. It looks amazing!
If you have any questions about the academic and/or financial vision of the School, please do not hesitate to contact Joe Linder, Principal, Dianne Jones, Finance Manager, or myself. We would love to help you come to understand our school operations more thoroughly…. and to love our school more deeply!
So, that’s the financial vision of the school. I want our school to remain open for many years to come. I think it’s an awesome outreach to our own parishioners, and beyond. These organizational steps we’ve taken over these past few years, and this new step of an Alumni Association, and sticking to the original by-laws of the School Endowment, are all necessary elements to achieve a school outreach for years to come. Thank you so much to all of our parishioners who have supported the school for so many years! It really is an awesome little school…. worth all of our effort! (I wouldn’t spend one morning a week there, if I didn’t believe it.)
Have a blessed week!
In cordibus Iesu et Mariae,