Baltimore-area prep schools’ endowments are dwindling along with any other investment in the current economy.
While schools declined to give specific numbers on their losses, local private school leaders revealed that the losses to their endowments were comparable with those of colleges and other institutions.
“Certainly the market decline has affected our endowment, by approximately 30 to 40 percent,” said Taylor Smith, headmaster at the Oldfields School in Glencoe. “Just like everyone else, we tighten the belt.”
School heads said that they did not think their endowment funds had been invested in too-risky securities.
“We were conservatively invested in diversified funds,” said Peter O’Neill, headmaster of the Garrison Forest School in Owings Mills. “Fiscally, financially, we are in good shape. The school will look for long-term conservative investments going forward,” O’Neill said.
Local independent schools said they will make their budgets leaner and more efficient this year.
“The first step is to look for efficiency any place you can get it,” Smith said. “This economic climate forces you to do things you could have done earlier.”
Smith said some vendors have been more willing to cut a deal, hoping to keep the school as a customer even as the school hopes to cut costs.
Each school has had a different level of fundraising success. In spite of the harsh economic climate, private schools benefit from the special position they hold in the hearts of parents of current students and alumni.
“In recessions, people support institutions which provided comfort and stability,” said Myra McGovern of the National Association of Independent Schools. “Independent schools are shelters form the storm,” she added.
But parents have also felt the pinch as the market has declined. Smith said more parents have asked to restructure their tuition payments and are opting to pay in monthly installments.
However, most parents are not pulling their children from private schools in large numbers.
“Because education involves longer-term issues, parents will not make decisions on one day’s market decline,” said McGovern. “Parents value their children’s education so highly they are willing to make sacrifices.”
