Phillips Exeter Alumni/ae - Annual Giving Fund Mission

Understanding Exeter's finances is the first step to under-standing its need for financial support. Within the larger picture of Exeter’s finances, the Annual Giving Fund is the only source of immediately available, flexible funds besides tuition.

How does Exeter cover its costs?

Quite simply, Exeter could not operate without the generosity of its alumni/ae, parents and friends. At this time, 59 percent of its yearly budget comes from gifts in some form: either the endowment or the Annual Giving Fund.

As a rule, schools have three main sources of annual income: tuition, earnings from an endowment (if they are fortunate enough to have one) and gifts. Some schools also earn a small income from side enterprises, such as bookstores or summer programs. However, because schools are focused on teaching, and not on profit-making ventures, most depend on these three primary sources of income.

This year, Exeter will cover 31 percent of its costs with tuition. Because of wide support from the Annual Giving Fund and the endowment, the Academy has been able to limit tuition increases in recent years and keep this figure comparatively low.

The Exeter endowment currently provides about 47 percent each year. This figure demonstrates just how powerful gifts can be. Without the donors who made gifts to endowment over the past 150 years, students today would be paying much higher tuition.

The same is true of the Annual Giving Fund, which will provide 10 percent of the budget this year. The Annual Giving Fund has a direct bearing on the quality of an Exeter education and the price of tuition. Because there are restrictions on how most of the endowment can be used, the Annual Giving Fund is the highest financial priority of the Academy each year.

What is the Exeter endowment?

Exeter's endowment is actually a collection of 1,400 individual funds, pooled and invested together, much like a mutual fund. The purpose of the endowment is to generate annual income that can be used today, next year, and 100 or 200 years from now to run the Academy. The financial goal of the endowment is to be predictable—to provide roughly the same level of income each year, while also growing to keep pace with inflation.

The endowment is huge—why can't it pay all of Exeter's costs?

Many people assume that the Exeter endowment is like a checkbook: we should use it to cover any costs at any time. In reality, there are rules Exeter must follow, laid down by each donor who makes a gift to the endowment.
Most donors create their endowment funds for specific purposes. Exeter is both legally and morally bound to use each fund as the donor wished. For example, if a donor created a teaching fund to support the history department, the Academy cannot use this fund for any other purpose, no matter how worthy. The majority of the Exeter endowment is restricted in this way.

Furthermore, only a small portion of the endowment can be spent in any given year. The trustees employ a strict spending policy that preserves the size of the endowment for the future. Donors support the endowment because they know that their funds will be invested prudently and continue to exist next year and for hundreds of years to come. They expect their gifts to be protected and to create a steady income for the school year after year.

If tuition covers roughly 31 percent of the costs, and the endowment provides roughly 47 percent, how does Exeter fill the gap?

Exeter's top financial priority every year is the Annual Giving Fund. It covers 10 percent of the costs, and it is invaluable because it is substantial and flexible. Nearly 11,000 alumni/ae, parents and friends banded together last year to contribute $7.4 million through the Annual Giving Fund. The power of that many Exonians coming together, with gifts of every size, is tremendous. It would take roughly $170 million in endowment to generate equivalent income each year.

Why does an Exeter education cost so much?

Exeter's costs are high because it is a people-intensive enterprise. The 12:1 student-teacher ratio at the Harkness table equals a substantial line item for salaries and benefits. In addition, a school like Exeter needs more than just teachers to function. For example, dining hall workers serve three meals a day, seven days a week; custodial staff keep 25 dormitories running. A team of reference librarians staffs the reference desk whenever the Library is open. Sixty interscholastic teams across 20 different sports require coaching. One thousand student computers and a networked campus need IT specialists. Most important, the entire enterprise needs the best students from every walk of life. Approximately 57 percent of Exeter's annual budget is devoted to Exeter people, in the form of salaries and benefits. In addition, Exeter awards a substantial amount of financial aid each year: $12 million in 2007-08.

Costs also grow because knowledge continually expands. When new fields of inquiry demand the addition of computer science, Arabic or genetics, the Academy does not discontinue Latin, calculus or beginning biology. Growth in teaching means growth in teachers, books, equipment, technology, training and even, over time, facilities. With discipline, Exeter's budget must grow, because the alternative is to stagnate and eventually lose relevance.

Does all this giving really benefit the students?

If you were to divide the total cost of running the school by the number of students, the cost per student would equal $69,670 for 2007–08. This year, however, Exeter charges a fee of $36,500 for boarding students and a fee of $28,200 for day students. Thus, every student, regardless of whether he or she receives financial aid, actually receives a substantial subsidy made possible through our endowment and robust Annual Giving Fund. Exeter's financial aid program provides an even greater subsidy to 43 percent of the student body this year. The average award for 2007-08 is $29,754 per boarding student. Quite simply, none of this would be possible without gifts to the endowment and to the Annual Giving Fund.

The numbers are all so big. Do small gifts really make a difference?

They really do. In fact, more than a quarter of gifts made to Exeter’s Annual Giving Fund are gifts of $100 or less. Last year, these gifts accounted for approximately $359,000 of the total raised. It would take millions of dollars of endowment to generate that amount for the operating budget. The absence of those gifts would certainly have a negative impact on Exeter students and faculty.