8. Why do people make donations to schools?
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Answer:
Nearly every private school has an annual fund, which is pretty much what the name says: an annual sum of money that is donated to the school by constituents (parents, faculty, trustees, alumni, and friends). Annual Fund dollars are used to support operational expenses at the school. These donations are usually gifts that individuals give to the school year after year, and are used to supplement the "gap" that most schools experience. Believe it or not, tuition at many private schools— and the vast majority of independent schools (Wondering about the difference between private and independent schools? Read this.)—does not cover the full cost of an education. It's not unusual for tuition to only cover 60-80% of what it costs to educate a student, and the annual fund at private schools helps make up this difference.
Answer:
Did you know that at most private schools, tuition doesn't actually cover the full cost of educating a student? It's true, and this discrepancy is often called "the gap," representing the difference between the true cost of a private school education per student and the cost of tuition per student. In fact, for many institutions, the gap is so great that it would put them out of business rather quickly if it weren't for donations from loyal members of the school community. Private schools are typically classified as non-profit organizations and hold the proper 501C3 documentation to operate as such. You can even check out the financial health of non-profit organizations, including most private schools, on sites like Guidestar, where you can actually review the form 990 documents that non-profits are required to complete annually. Accounts on Guidestar are required, but are free to access basic information.
Ok, all great information, but you may still be wondering, where does the money go ... the truth is, the overhead of running a school is quite large. From faculty and staff salaries, which often accounts for a majority of school expenses, to facility maintenance and operations, daily supplies, and even food expenses, especially at boarding schools, the cash flow out is quite large. Schools also offset their tuition for families who can't afford the full cost with what is called, financial aid. This grant money is often funded by operating budgets, but ideally would come from endowment (more on that in a bit), which is the result of charitable donations.
Let's look at the different modes of giving and find out more about how each type of fundraising effort can benefit the school.
Explanation:
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