Dear MPH Community,
In a recent message I described the major marketing project on which we are embarking. This will help us focus and clarify our message as well as get it to a broader, yet targeted audience. Over time this should increase admissions inquiries and, as a result of that, enrollment, which is necessary for short- and long-term sustainability. In this message I want to address the long-term financial health of the School.
Independent schools typically receive little or no financial support from local, state, and federal funds. Rather, major funding comes from several other sources. Tuition and fees account for the majority of operating expenses. A second form of revenue is from gifts to the annual fund, used to enhance or make possible various programs at the School. Third, there is the occasional capital campaign, typically, as the term suggests, for capital projects such as buildings, but also for building endowment. Fourth, we have revenue from auxiliary programs such as summer camps and courses. Finally, there is income from interest on endowment funds.
In simple terms, an endowment is a kind of savings account. The principal, ideally growing, is typically left untouched, while a portion of the interest is used for a variety of needs outside the operational budget. For example, a donor may designate an endowment gift for scholarships to make our student body more economically diverse, or to support faculty and staff professional development. The interest on such gifts is then used to support those purposes. Another donor might make a gift to the endowment without restricting its use, leaving that to the School's judgement. In addition, there are unrestricted gifts to the School that the Board of Trustees may vote to put into the endowment. What these gifts have in common is that, because the principal remains untouched, they continue to benefit the School in perpetuity.
In a recent article in Harvard Magazine, Harvard President Drew Faust uses the term "vigorous immortality" to describe the purpose of an endowment. On the one hand, we want to be conservative with it because part of its purpose is to ensure that the institution is here after we all are gone. That's the "immortality" part. But we also want to make "vigorous" use of interest on the endowment to boldly make ourselves into an "ideal MPH."
While our endowment and institutional funds have grown over the past several years, they still are well below what they need to be. A rule of thumb is that endowment should be at least three times the annual operating budget. MPH's operating budget this year is about $8 million, while, as of June 30, the endowment stood at just over $5.5 million, not the $24 million the rule of thumb prescribes. The Board and I are committed to increasing endowment in the coming years. To that end, I want to tell you about several recent gifts to the endowment that will continue to give back to our School well into the future. At the same time, I hope you will see that these also are examples of the improving fiscal health of the School.
Alan Marcum '74, who was our 2014 Commencement speaker, has been an active alumnus for many years, often bringing his professional expertise in the field of technology to MPH classrooms. Last spring, his mother, Helen Marcum, attended the MPH production of Cabaret and was so impressed, she has made a gift to the endowment to establish the Marcum Family Endowment for the Arts. This restricted gift will help to ensure our performing arts program continues to be the best in Central New York.
Just a few weeks ago we received a $200,000 gift from the estate of the late Robert "Dudley" Harrington '51C. The Harrington family have been long-time supporters of the Manlius Alumni Annual Giving Campaign. While Mr. Harrington did not restrict the funds to any particular purpose, I am pleased that, at my recommendation, the Board of Trustees has voted to place this gift in our endowment. Because of this, Mr. Harrington's gift will be a fitting and long-lasting legacy. His bequest also highlights the importance to the School of planned giving, a major source of gifts in most schools.
Finally, for some time, even prior to my appointment as head of school, my wife and I have discussed how we might best express our gratitude and commitment to--and our confidence in--the School. In a sense, like many MPH parents, we did that when we decided early on to re-enroll our daughter for this school year. But we wanted also to make a financial gift to the School. Like most people, we have over the years made modest contributions to our colleges and graduate schools and the schools where we have worked. Knowing the financial situation of the School, and committed to its flourishing well into the future, we agreed that we should make a gift to the MPH endowment in an amount equal to a year's tuition, a significant commitment for us. I relate this, not to call attention to us, but as an indication that, like so many of you in the MPH community, our family believes strongly in the mission of MPH and is committed to perpetuating that mission into the future. Just as we are proud to be parents of a soon-to-be MPH graduate, we are proud to be a part of the future of the School. We are giving back some of what the School has given to us--and will give to others after we are gone. It's the best investment we can make!
I could give other examples, but I have gone on now at great length. I have marveled at the many testimonials I have heard from former students and current parents and grandparents about what MPH has meant to them, their children, and their grandchildren. Those conversations are about changed lives in which the School has made a world of difference. I hope these stories serve not only as examples of the strength of MPH's future, but also inspire you to think seriously about what impact your family can make to help secure the long-term stability of this great School.
Warmly,
Jim Dunaway
Head of School
