September 2017 | Volume 93, Issue I | Honolulu, Hawai‘i | A Voice for Students Since 1923
Funding ONE TEAM: ‘Iolani’s Financial Operations By Isabella Chang ’18 & Eve Huddleston ’19
‘I
olani is the third most expensive high school on O‘ahu with a current tuition of $22,550. Each February, parents receive a letter in the mail informing them of the coming year’s tuition, which increases approximately four percent annually. No family enjoys seeing a tuition hike; however, knowing that each ‘Iolani student receives an $8,000 scholarship–whether or not the VWXGHQW UHFHLYHV ÂżQDQFLDO DLGÂąPD\ OHVVHQ WKH EORZ “Tuition only covers about 75 percent of what it costs to educate a child; so in dollars, the tuition gap is roughly ´ VDLG Âľ,RODQLÂśV &KLHI )LQDQFLDO 2IÂżFHU 0U 5HLG Gushiken. In other words, if tuition alone were used to cover all of the school’s costs, admission to ‘Iolani would amount to approximately $30,550. Tuition itself accounts for only $43 million of ‘Iolani’s PLOOLRQ \HDUO\ EXGJHW ZKLFK LV QHHGHG WR ÂżQDQFH everything from teacher salaries to utilities. The rest of the money is acquired through the endowment draw, fundraising, and summer school/after school programs. The Endowment $V D QRQ SURÂżW RUJDQL]DWLRQ Âľ,RODQL 6FKRRO GUDZV IURP its $185 million endowment in order to supplement the annual budget. Following the Yale Formula, the school FDOFXODWHV WKH DYHUDJH VL]H RI WKH HQGRZPHQW IRU WKH SDVW WKUHH \HDUV DQG ZLWKGUDZV ÂżYH SHUFHQW RI WKDW QXPEHU At its current level, the school’s endowment draw has approximated $8 million in recent years. Although now a formidable sum of money, ‘Iolani’s endowment was founded only about 40 years ago. The roughly two-acre property currently occupied by WKH 5R\DO ,RODQL FRQGRPLQLXPV ZDV RQFH SDUW RI WKH Âľ,RODQL 6FKRRO FDPSXV ,Q WKH ODWH V WKH VFKRRO sold the property, and the proceeds received from the sale served as the initial seed money for the school’s HQGRZPHQW 6LQFH WKDW WLPH WKH HQGRZPHQW KDV EHHQ further supplemented by the sale of additional properties RQ 0DXL DQG LQ .DQHÂľRKH WKDW ZHUH GRQDWHG WR Âľ,RODQL 6FKRRO E\ &DVWOH &RRNH 7KHVH WZR WUDQVDFWLRQV DORQJ with favorable investment returns over the years and generous donors who support the school, have enabled WKH HQGRZPHQW WR JURZ VLJQLÂżFDQWO\ “Back in 2010, which is a little more than seven years ago, the endowment was only $126 million, but in that seven- to eight-year window, we were able to grow the $126 million to a little over $185 million,â€? said Gushiken. :LWK VXFK D SURVSHURXV HQGRZPHQW JURZLQJ LQ VL]H each year, questions arise as to why tuition continues to increase when the school could plausibly withdraw more money in order to maintain a constant tuition rate. In answer to this, Gushiken explains the importance of adhering to the endowment’s current management strategy.
“Tuition only covers about 75 percent of what it costs to educate a child; so in dollars, the tuition gap is roughly $8,000.â€? -Mr. Reid Gushiken ‘+QNCPK %JKGH (KPCPEKCN 1HĆ‚EGT Âł*URZLQJ WKH HQGRZPHQW EHQHÂżWV WKH VFKRRO LQ VHYHUDO ZD\V 0RVW QRWDEO\ LW SURYLGHV XV ZLWK ORQJ WHUP ÂżQDQFLDO VWDELOLW\ LQ WKH HYHQW RI XQIRUHVHHQ circumstances, and it enhances our ability to support school operations by supplementing the school’s operating budget through increased endowment draws,â€? VDLG *XVKLNHQ Âł%HFDXVH RI WKH VXEVWDQWLDO EHQHÂżWV WKDW our endowment affords the school over both the long and short term, preserving and growing our endowment is a FULWLFDO FRPSRQHQW RI WKH VFKRROÂśV ÂżQDQFLDO SODQQLQJ ´
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$57 Million Budget Breakdown
67%
9% 4%
Where Does the Yearly Budget Go?
Tuition 72%
Endowment 14%
Personnel Costs Department Budget Financial Aid School Support Physical Plant
14% 6%
Donations 5% Summer & After School Programs Other 7% 2%
The ‘IO Society 7KH Âľ,2 6RFLHW\ along with other fundraising, adds Did you know? approximately $1.8 million to the budget. The Âľ,2 6RFLHW\ Âľ,RODQLÂśV DQQXDO giving leadership group, was founded three years ago with the purpose of encouraging people to make unrestricted donations to the school. 0HPEHUV RI WKH Âľ,2 6RFLHW\ PDNH DQ XQUHVWULFWHG ÂżYH \HDU SOHGJH RI donating $1,000 or more annually to the ‘Iolani Fund. Graduates from the last ten years have the option to join with a pledge of $250 annually. ‘Unrestricted giving’ means donors entrust the school to use their money wisely, to wherever the need is greatest, LQVWHDG RI FKRRVLQJ WR VXSSRUW D VSHFLÂżF GHSDUWPHQW RU SURJUDP 7KH Âľ,2 6RFLHW\ FRQtributions allow the school to maintain its ‘Three Pillars of Education.â€? 7KH ÂżUVW SLOODU SHUWDLQV WR SUHVHUYLQJ Âľ,RODQLÂśV VPDOO FODVV VL]HV ZKLOH NHHSLQJ WXLWLRQ LQFUHDVHV PLQLPDO Âł7KH VPDOO FODVV VL]HV DOORZ RXU WHDFKHUV WR JHW WR NQRZ the students so there is a relationship that can help to improve learning in the classroom and provide support for the students should issues arise in or out of the class,â€? VDLG 0U 0LNH 0RVHV GLUHFWRU RI WKH $QQXDO )XQG The second pillar concerns increased access to ‘Iolani 6FKRRO WKURXJK HQKDQFHG ÂżQDQFLDO DLG DQG VFKRODUVKLS opportunities. “We want to ensure that as many students and families as possible can afford to attend ‘Iolani,â€? said 0RVHV The third pillar is the school’s commitment to providing world-leading education programs, like those within the 6XOOLYDQ &HQWHU IRU ,QQRYDWLRQ DQG /HDGHUVKLS WR HQVXUH students’ college competitiveness. Everyone in the ‘Iolani community is represented in the Âľ,2 6RFLHW\ IURP DOXPQL DQG SDUHQWV WR IDFXOW\ DQG VWDII Depending on the level at which they give, donors are hosted at various ‘Iolani events such as performing arts shows and sports games. Âł:KHQ ZH EULQJ Âľ,2 6RFLHW\ PHPEHUV WR VD\ +DZDLL 7KHDWUH IRU WKH 6SULQJ 0XVLFDO RU DQ RUFKHVWUD FRQFHUW WKH\ DUH DPD]HG E\ WKH WDOHQW RI WKH VWXGHQWV ´ VDLG 0RVHV Âł,W UHDOO\ PDNHV WKHP IHHO JRRG DERXW WKHLU contribution to the school and that they are helping to support these programs and the students who are in them.â€? :KLOH WKH Âľ,2 6RFLHW\ KDV FRQWULEXWHG JUHDWO\ WR Âľ,RODQL 6FKRROÂśV UDSLG JURZWK DQG LPSURYHPHQW LQ UHFHQW \HDUV
gifts from others in the community are just as essential. â&#x20AC;&#x2DC;Iolani fundraising UHFHLYHV GRQDWLRQV DQ\ZKHUH IURP ÂżYH dollars and above. 0RVHV VDLG WKH Âľ,2 VRFLHW\ QHHGV WKH VXSSRUW of the entire community. â&#x20AC;&#x153;At whatever level people are able to support the school, we are so grateful for it,â&#x20AC;? he said. The Summer/After School Programs Once the endowment draw and annual giving is factored in, revenue from summer and afterschool SURJUDPV SURYLGH WKH ÂżQDO LQVWDOOPHQW RI SHUFHQW 'XULQJ WKH UHJXODU VFKRRO \HDU Âľ,RODQL KRVWV VWXGHQWV +RZHYHU GXULQJ WKH VXPPHU WKH VFKRRO services 2,500 students, including those from other VFKRROV LQ +DZDLL DQG LQWHUQDWLRQDO VWXGHQWV 7KH ODWWHU comprises 60 percent of the students who attend summer school. By offering over 135 classes with 300 sessions, UDQJLQJ IURP WR VXPPHU VFKRRO DFFRXQWV IRU about 6.4 percentof the 7.5 percent total contributions. After-school programs and supplemental classes such as WKH IDOO ZHHNHQG 36$7 3UHS DQG $GXOW &HUDPLFV FRXUVHV supply the additional 1.1 percent of the 7.5 percent by offering multiple enrichment programs as well as VXSHUYLVLRQ IRU VWXGHQWV LQ . Âł7KH SULPDU\ JRDO RI WKH after- school care programs is not so much to create a net SURÂżW EXW WR EH D VXSSRUW PHDQV ´ VDLG (ULN <DPDPRWR GLUHFWRU RI Âľ,RODQL 6SHFLDO 3URJUDPV Although holding the title of the third most expensive high school on O`ahu may seem daunting, strategic investments, reputable summer and afterschool programs and generous donations from the â&#x20AC;&#x2DC;Iolani community allow students to attend for the best price possible. â&#x20AC;&#x153;Everyone is working to make attending â&#x20AC;&#x2DC;Iolani as DIIRUGDEOH DV SRVVLEOH ´ VDLG +HDG RI 6FKRRO 'U 7LPRWK\ Cottrell. â&#x20AC;&#x153;There is the idea that none of us really achieves alone. Even though so many of the students here are really super stars, part of what you get out of `Iolani is that knowledge and humility.â&#x20AC;?
9/23/17 10:46 AM