Catholic Schools Turn Toward Endowments

At a time when tuition dollars and parish subsidies are no longer sufficient to keep Catholic schools in the black, some school administrators are establishing foundations and endowments to ensure their doors stay open.Earlier this week, an Upper East Side parish school, St. Francis de Sales — facing declining enrollment amid rising tuition — announced it would close in June. “The tuition is beyond the pockets of working-class Catholics,” its pastor, the Reverend Victor Muzzin, said of the school’s $3,000 annual tuition, which recently went up by about 10%.“Endowment funds are truly a long-range answer, and will provide schools with financial security, and with financial aid and scholarship money,” the director of educational development for the Archdiocese of New York, Joseph Gerics, said.Mr. Gerics said many archdiocesan schools have the short-term goal of eliminating their operating deficits, and the longer-term goal of establishing endowments. He noted that only a handful of area schools have such funds.The Epiphany School in Gramercy Park each year puts $600,000 of the money it raises into a private, nonprofit foundation. While most of those funds are used for annual operating expenses and scholarships, about $100,000 is placed into long-term investments, the school’s principal, James Hayes, said.So far, the elementary school has invested $500,000 — and interest from those investments will remain untouched until the school has at least $2 million in reserve, according to Mr. Hayes. “You can’t expect the increased cost of running a school to be borne by tuition, so you have to find other means to support the school,” he said.In recent years, St. Jean Baptiste High School on East 75th Street has stepped up its fund-raising efforts and alumni outreach with the hopes of one day establishing an endowment, its principal, Sister Ona Bessette, said. “You don’t always want to feel like you’re facing an emergency situation,” she said. “You don’t want to feel like your stability is in jeopardy.”Although foundations and endowments have long been de rigueur at the city’s independent academies, Catholic schools have been slower to create such investment vehicles.The average independent school has an $18.3 million endowment, though many New York private schools have much larger, income-deriving funds, according to statistics provided by the National Association of Independent Schools. The Dalton School on the Upper East Side, for one, has a $47 million endowment, according to its Web site.“Catholics are Johnny-come-lately to this,” the principal of the Kellenberg Memorial High School in Uniondale, N.Y., the Reverend Philip Eichner, said.Kellenberg’s five-year-old endowment now stands at $2 million. Rev. Eichner said he plans to increase it to more than $50 million, interest from which would be used to indefinitely stave off tuition increases and provide scholarships. “We must come to terms with the fact that Catholic schools are very successful if people can afford them,” he said.For a long time, Regis High School, a tuition-free Jesuit high school on East 84th Street, was among just a few Catholic schools with a significant endowment. The fund was established in 1975, when its anonymous benefactor left the school about $5 million, the school’s vice president for development, James Buggy, said. Today, that endowment has surpassed $70 million, thanks to alumni gifts, and moneymaking investments.The school earns about 5% interest, some of which funds day-to-day operations, while some is reinvested in the endowment to keep pace with inflation, according to Regis’s vice president for development, James Buggy, said.Several factors have made it difficult for many Catholic schools to set up an endowment, Mr. Buggy said. For one, many schools haven’t been diligent about keeping in touch with their alumni — making it harder to cultivate new major donors among them.In addition, Mr. Buggy said Catholic schools have long relied heavily on tuition, and on parish subsidies. But with school operating costs skyrocketing, and parishes increasingly hard-pressed to make ends meet, this is no longer a sustainable model, he said.Because creating an endowment is a major fund-raising challenge for Catholic schools, there’s the Endowment for Inner-City Education, a private $76 million endowment established a decade ago by three New York City philanthropists. The endowment provides scholarship money, capital improvement grants, and special project funds at Catholic schools at which the majority of students live below the poverty line.“So many of the schools have operating deficits and emergency capital needs from deferred maintenance that they don’t always get the luxury of stepping back and planning for the future,” the organization’s executive director, Caren Howley, said. “But that’s also keeps them in perpetual crisis mode.”The Endowment for Inner-City Education provides “long-term sustainability and support” to those schools, Ms. Howley said.

Catholic Schools Turn Toward Endowments

Catholic Schools Turn Toward Endowments

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