Subject: Message from Board of Trustees
From: "Bryan Garman" <[email-masked]>
To: "R. Hunter Biden" <[email-masked]>
Date: Fri, 15 Jan 2016 13:30:10 -0500

Friday, January 15, 2016

		

		 
			
				Dear Parents and Guardians:We hope that the New Year is off to a wonderful start for you and your family. As representatives of the Board of Trustees, we are writing today to share information about tuition and the operating budget for the 2016/17 academic year. In an effort to improve understanding of the budget, we are providing more details than we have in previous communications.Determining the budget and setting tuition is a complex process led by the Board&rsquo;s Finance Committee, which works diligently to fund strategic objectives and contain operating costs, maintain programmatic excellence, and moderate tuition increases. Discussion in the committee and at the Board level is always vigorous, as trustees take seriously their fiduciary responsibility and their obligation to represent the perspectives of various stakeholders, including you, the parents and guardians of Sidwell Friends students. Most members of the Board of Trustees are current or past parents, five are alumni, and, in accordance with our bylaws, half are members of the Society of Friends.Sidwell Friends is fortunate to have a generous parent and alumni community that provides significant revenue through contributions to the Annual Fund, endowment, capital projects, and other fundraising activities. Without this important philanthropic support, along with income from summer programs and rentals, we could not fund the School at current levels. Nevertheless, like most independent schools and colleges, the School derives the vast majority of its revenue (about 80 percent) from tuition, and the Board is acutely aware that it needs to develop a long-term strategy that will reduce our dependency upon this source. To that end, the Board is establishing a Financial Sustainability Task Force (FSTF), which will examine the current financial model and make recommendations with the intention of moving the School toward a less tuition-dependent budget.Initial recommendations from the FSTF are expected in the fall of 2016, but given the School&rsquo;s endowment and current debt, the movement away from tuition dependency will require time, patience, and innovation. That said, the Board and administration have continued to work together to contain costs and set clear priorities for the 2016/17 academic year. After rigorous analysis and planning, the Board has set the 2016/17 tuition at $39,360 (a 4.25 percent increase) for all grades. This tuition will enable the School to fund a budget that meets the following key priorities:		Provide a salary and benefits package that positions the School to recruit, retain, and reward a highly talented faculty and staff committed to academic excellence, the well-being of our students, and our Quaker mission. Given the rising cost of living in the DC market and unpredictable increases in health care, the School needs to be especially attuned to maintaining competitive faculty and staff compensation packages. In addition, it is important to note that the School has added key positions to enhance student and family services, including a Lower School counselor, the Director of Equity, Justice, and Community, and the Director of Parent Relations. Some staffing additions have been funded (or initially funded) through one-time grants, the elimination of positions through attrition, and/or through the discontinuation of relationships with consultants.			Fund increased costs in educational and administrative technology. Since 2010, the School has upgraded its technological infrastructure and platforms and, like most organizations, has been compelled to evaluate and invest in cybersecurity measures. As a result, technology costs have more than tripled over this period, increasing at a rate significantly higher than inflation. Investments on the educational side&mdash;which include the Lower School iPad program, the Middle School laptop program, and the addition of 3D printers across divisions&mdash;have responded to emerging trends in education. Administrative upgrades have largely focused on replacing systems that have become obsolete, and while new technologies will ultimately be more efficient and effective, they have resulted in ongoing training costs. Newly implemented purchasing practices and controls will dramatically flatten the rate of increase in the technology line over time, but such efficiencies have yet to have a material impact on our budget.			Implement security measures that enhance safety and maintain a sense of community. World events require that the School continually assess its security procedures, and costs in this area outpace the rate of inflation. School safety and security policies are overseen by the Board&rsquo;s Infrastructure and Security Committee, which will continue to evaluate School procedures and recommend funding as appropriate.			Ensure the financial sustainability of the School by maintaining healthy reserves and identifying opportunities to minimize long-term financial risk. In 2007, the School took advantage of low variable interest rates and borrowed $50 million to complete a number of urgently needed building projects, including the Middle School, the Athletic Center, the Robert L. Smith Meeting Room, and the Kogod Arts Center. On July 1, 2015, the School refinanced the remaining debt ($47 million) at an extremely favorable fixed rate for 26 years. The Board&rsquo;s decision to lock in a historically low interest rate mitigates risk and will yield long-term financial benefits, but the cost of closing the loan required us to utilize cash reserves.			Maintain our current financial aid commitment, which apportions 16.8 percent of gross tuition revenue to the financial aid budget. Providing financial aid is central to our mission as a Quaker institution. Currently, one in four students receives financial aid, and the School remains committed to serving all students equally well by offering the full range of the Sidwell Friends School experience to all who are admitted.	We trust that these priorities illuminate the rationale for the budget. We believe we have balanced the important objective of controlling tuition increases with our shared obligation to maintain a financially sound institution that offers an extraordinary education. We are honored to steward this dynamic organization and thank you for entrusting your children&rsquo;s education to the School.In friendship and with gratitude,						Margaret Plank			Neal Wilson			Bryan Garman							Clerk of the Board of Trustees			Clerk, Finance Committee			Treasurer of the Board of Trustees			Head of School			

		

		

					

					

					

					

					

					

				

		

		
			3825 Wisconsin Avenue NW   Washington, DC  20016   Tel: 202-537-8100   Fax: 202-537-8138

	
		
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