As schools are preparing their audits and looking back on the 2024 fiscal year, I wanted to dive into the 2023 fiscal year and examine schools’ budget results. Using data from NBOA’s Business Intelligence for Independent Schools (BIIS) signature reporting platform, I analyzed the income and expenses data for more than 670 schools, as well as staffing, plant debt and endowment information. I was especially interested in uncovering any differences in the finances between schools that ended the 2023 fiscal year with a surplus (66% of schools) and those with a deficit (34%). My analysis revealed the following findings.
Schools with a deficit relied more heavily on net tuition revenue. Among schools with a deficit, 77.3% of their income came from net tuition revenue, compared to 74.6% among schools with a surplus. Schools with a deficit had a higher median sticker price per student ($30,137) compared to schools with a surplus ($29,387), but schools with a deficit also had a higher tuition discount rate (20%) compared to schools with a surplus (16%).
Schools with a deficit brought in more annual giving dollars per student. Schools with a deficit brought in $1,337 in annual giving dollars per student compared to $1,234 among schools with a surplus. Schools with a deficit relied more heavily on annual giving dollars as a percentage of their income (5.7%) than schools with a surplus (4.5%).
Schools with a deficit had a larger proportion of their income come from funds drawn from the school’s accumulated surplus/reserves. Schools with a surplus saw only 0.7% of their income come from funds drawn from the school’s accumulated surplus/reserves. Schools with a deficit saw 1.6% of their income come from this source.
Schools with a deficit relied more heavily on endowment income. Among schools with a deficit, 7.2% of their income came from funds drawn from the school’s endowment, compared to 3.7% among schools with a surplus. Schools with a deficit that had an endowment were more likely to have a permanently restricted endowment valued between $10 million and $50 million (32% of schools) than schools with a surplus (23% of schools), but schools with a surplus were slightly more likely to have a permanently restricted endowment valued at more than $50 million (7% of schools) than schools with a deficit (6%). Schools with a surplus saw a larger proportion of their income coming from interest and investment income (2.6%) compared to schools with a deficit (1.7%).
Schools with a surplus had lower median operating expenses per student. Schools with a surplus had a median of $31,428 in total operating expenses per student compared to $34,420 among schools with a deficit.
Schools with a surplus had a higher student to employee ratio. Schools with a surplus had a median of 4.6 students per all employees and a median of 7.3 students per faculty. Schools with a deficit had a median of 4.3 students per all employees and a median of 6.7 students per faculty. Schools with a surplus allocated a larger proportion of their total operating expenses to payroll and benefits (62.4%) than schools with a deficit (61.6%).
Schools with a surplus were less likely to have plant debt. 76% of schools with a surplus had plant debt compared to 80% of schools with a deficit.
