Enduring School Riddles, Part 1

IS Families,

Striking the right balance on a series of tough allocation questions is a mandate for any thoughtful school. We bring together a diverse group of people with a diverse set of wants, needs, ideas, and capacities—and then we find ways to make something happen together, for the benefit of students and of our communities. Island School is no exception—maybe it’s a prime example, actually, of this balancing act in action. With that in mind, my plan is to use this column to highlight how tricky it all is with a monthly case in point, so let’s start with one of the biggies, tuition. Here we go:

Independent school budgets are really simple, they’re just not easy. Unless something earth-changing happened sometime in a school’s past (like the establishment of a huge permanent endowment), tuition provides the vast majority of the revenue each year. The arithmetic tends run like this—A (tuition) + B (fundraising) + C (endowment) + D (everything else) = M, the money we have to underwrite our whole enterprise. And especially for pretty new places like ours, typically A=90%+, B=5-10% if you hustle, C= 1-2% if you are lucky, and D is a fraction of a point, no matter how hard you work at renting out your space or selling merchandise of some kind. And that’s kind of the world we live in—M is pretty modest.

The other side of the ledger is similarly simple, with expenditures being X (wages and benefits) + Y (operations) + Z (financial aid and other programs). It’s typical here and elsewhere that X=70%, Y=15%, and Z=15%, very roughly—be grateful we don’t have one more variable, debt, to work into the equation. Thank goodness that has not been part of the model here. So, M has to balance to make this world work.

The other world we live in is this beautiful island home, loved, maybe too much, by people across the globe, creating serious pressures on our cost of living. At last check, life in Hawai’i costs about twice the US national average, and our island may be higher still, especially for housing, where we are by recent count 310%+ of the what’s typical in other states. With that escalating trend, it seems to me (as a newcomer) that people have collectively agreed, ironically in response, that keeping school costs low makes sense as a form of relief. But again, as a newcomer, how is that supposed to work?

It's not just us, but it is us. The average tuition for our largest member organization, the National Association of Independent Schools (NAIS), 1400 strong, stood at $27,950 two years ago (the most recent data I can find). And the average HAIS tuition, for the 90+ schools in the islands statewide, sits remarkably at just $12,997, with only three at or above the national average—even with our cost of living. It’s a head scratcher. Not surprisingly, faculty salaries in Hawaii lag behind in both public and independent schools when cost of living is included, landing us dead last, 51st place, after D.C. is included. 

The DOE here in Hawai’i responded this summer with a reset that moved educator salaries up 30% in the case of the most experienced and valued staff, facing record turnover and trouble finding teachers at all. Friends, here’s the big question—how will we at Island School respond to pressures on our household budgets when it comes to providing more for the core of our school budget—our teachers? The modest increases of recent years, compared with the tight budgets of our entire history, leave us stretching to catch up to material pressures faced by my dear colleagues, and the tradeoff is a very real thing, a hard thing, a long game issue. No doubt it will take our best, most determined work, at the center of the next chapter for our story.

Don’t shoot the messenger. I see how much people care about the Island School community, and this is my brief chance to shine a light, so take these observations in that spirit. And every month or so, I’ll try to add some more to the big balancing act I’m inviting you to consider. Whatever we do, we’re better off doing it together. My guess is that you know and understand much of this stuff already—we’re just looking for the right opportunity to act. For my money, this seems like a pretty important time.

And you know I’m game for a conversation, as deep as you’d want to go, whenever works for you.

Hoping not to have overstepped,