So...What *Is* An Annual Fund
Stone Community,
First, an acknowledgement: some of the trickiest and most complex conversations to foster around independent schools are those regarding “fundraising”. Handled poorly, they can engender uncertainty and frustration; handled positively, they create spaces and opportunities which welcome entire communities into the larger work of a School.
Today, I am beginning a conversation about Stone’s Annual Fund, and over the next 3 blog posts I intend to share:
So...What Is An Annual Fund?
So...What ‘Counts’?
So...How Do I Get Involved?
The goal of this blog series is pretty straightforward: I’m writing to establish support for the Annual Fund. But because the language of fundraising can sound foreign at a school as young as ours, before I do anything else I want to be sure to move slowly, to spend some time building common terminology, to invite conversation. Today’s post -- “So...What Is An Annual Fund?” -- is written as a kind of “School Fundraising FAQ Sheet”: it covers the basics of fundraising and development work, and the role of an Annual Fund in the lifecycle of a school.
There is no specific ask in this post other than this: I hope you’ll take about three or so minutes to read below, and I hope you’ll reach out directly to me with any questions or comments.
Without any further ado: “So...What Is An Annual Fund?”
Let’s Cut to the Chase: What Is An Annual Fund?
An Annual Fund is exactly what it sounds like -- a yearly fundraising endeavor, one which typically runs from about August through about June, whose sole purpose is to support the “annual“ work of the school. Here’s a quote I came across in a National Association of Independent School ‘Trustee Series’ guidebook which frames the urgency of an Annual Fund:
“Why Fundraising Matters: For the vast majority of independent schools, tuition revenue alone does not cover the cost of educating a child. Tuition typically covers only three-quarters of the cost to run the typical independent day school and slightly over half at a boarding school.”
This indeed is the strange truth about our schools -- tuition doesn’t cover the cost of running a school, schools are not “break-even” propositions. As you just read, NAIS suggests that a “typical” financial model is one in which between 75% and 90% of a school’s operations are covered by tuition and the rest is covered by “fundraising”. Here at Stone, our goal is 85%, which means our goal is to make up the other 15% by establishing an Annual Fund and inviting our entire extended community to participate in its support.
Okay. Private Schools Talk All The Time About Capital Campaigns and Endowments and Other Kinds Of Funds -- What’s The Difference Between This Fund And All The Other Funds I Hear About?
It’s true: Independent schools talk a lot about “fundraising” (or, Development). Older and more established schools all have “Annual Funds”; older and more established schools also have dozens of additional funds designed to support specific endeavors. For example:
Funds targeted to develop specific kinds of program (e.g. scholarships, computers, lab equipment, travel programs, scoreboards, etc);
Funds targeted to support long term sustainability: (e.g. an “Endowment” or an “Emergency Fund”);
And, Funds targeted to build new wings, gymnasiums, campuses, etc (e.g. “Capital Campaign”).
Annual Funds are very much the first, and perhaps most important, step on the Development scaffold. When you put the entire picture together, you see that independent schools typically design around “the very short term” (that’s the annual fund); around “near horizon” opportunities (that’s targeted fundraising for program support); and around “the future” -- (that’s Endowment building, emergency fund development, and capital campaigns). While we do continue to seek support for targeted programs and strategic growth, the specific purpose of an Annual Fund is typically “operations”.
Did Stone Have An Annual Fund between 2017 - 2020?
Yes and no. We have always lived with a “gap” between operations and tuition; as a start-up school which scaled much more quickly than predicted, there have been times when the gap was pretty far outside of that suggested 10% - 25% range. Now that we are maturing, our approach is changing in both pragmatic and strategic ways:
Pragmatic: as discussed at last year’s December and January Parents’ Association meetings, we have adjusted tuition so that we can work from a more sustainable model;
Strategic: now we want to use that pragmatic change to develop sustainable approaches to the work of the school.
Long story short: is all this gap stuff “new”? No. Is it specific to Stone? No. Is our approach evolving as we mature? Absolutely.
Okay. So 20-21 was the first year of the Annual Fund. How did it do?
In 20-21 we worked strategically to build our first Annual Fund campaign and it was an incredible success. We received a total of 85 gifts ranging in size and every single dollar contributed to our success. Last year (21-22) the Annual Fund grew again – we received a total of 113 gifts varying in size from $25.00 to $50,000.00 and every gift helped us accomplish our two primary goals (see below!).
Okay. So Schools Have Annual Funds, And Now Stone Does Too. Who Benefits From An Annual Fund?
An Annual Fund powers a school year and quite honestly everyone -- faculty, students, everyone -- benefits from it directly. Specific to Stone, our Annual Fund also allows us to remain “need blind” -- over six admissions cycles we have never turned away anyone for financial reasons, and with help from this extraordinary (and extraordinarily supportive) community we hope never to do so. But to be really specific, the Annual Fund allows us to:
Remain Need Blind;
While continuing to increase our faculty’s compensation.
Does This Mean You’re Going To Ask Us For Money All The Time?
That’s a really tricky question! In my limited experience, the best way I can answer that question is to be 100% forthright: if you look at my job description, you’ll see that I have five primary areas of focus (Governance, Culture, Marketing, Admissions, and Development) -- much of my work is indeed connected to revenue creation. But that’s not “new” -- that’s been my job since we first began working on “The TBA School” in 2015, that continues to be my job today as we receive financial support of every imaginable size from a vibrant community of supporters who are passionate about “The Future, At Stone”.
We work hard to be strategic (read: thoughtful) about the way we talk about financial support here at Stone; it is important to me personally that the way we talk about financial support is a direct function of our Mission and our institutional values. But, that doesn’t necessarily mean that those conversations will be “invisible” or will happen “off-stage”.
Okay, I Get It: Independent Schools All Do This. What Happens Now?
For now, I’d just ask that you keep learning. I have two more emails to send you, and I’d really appreciate it if you’d read both. The next one is going to discuss giving very specifically; the last one will cover “next steps”.
Between now and then, you can always email me at simpsonm@stoneindependent.org to learn more. Between now and then, know how grateful I continue to be for your time, your patience, and the many ways you choose to support us,
Mike Simpson, Head of School
See Also: So…What Counts?; How To Support the Annual Fund;