What are the operating costs / budgetary items for running a private school? Seeing a few school budgets would be amazing, but a full cost breakdown in a spreadsheet would be just as nice. Sources for the stats would be helpful too.
After exhaustive research, we have established that there are no preexisting reports profiling the full cost breakdown of budgets from private schools in the U.S. Second, articles addressing some costs for operating a private school were very limited and provided little information, even in the best sources we found. This is because, unlike public schools, private schools are not required to publicize their operating costs. Despite this, we found three private schools that have mentioned their operating budget/budgetary items. They provided this information to the public as a form of transparency while requesting donations, in an effort to supplement tuition fees received from students. These sources were not detailed with regard to providing an entire budget breakdown, but were sufficient in helping us triangulate the average cost for operating a private school per child. Aside from this, we found articles that gave statistics on some expenses incurred while running a private school. Generally, the costs of operating a private school vary widely, but we can estimate it to be between $17,000 and $81,000 per child per year with the biggest expense being salaries and benefits for the staff/ teachers.
In running a private school, it’s important to base the decision on sound data that addresses costs and strategies needed to successfully run the school. Aside from identifying a suitable niche, forming a committee, incorporating and developing a business plan, it is essential to develop a budget, recommendable for 5 years. The financial person in your committee is responsible for developing this document. This critical document can take either of the two forms: an operating budget or a capital budget. An operating budget normally covers a one-year time period; for example, planning for social security expenses. Capital budgets are long-term decisions that are developed for either expansion or replacement; for example, planning for a swimming pool or an art facility.
The founder or founders of private schools should expect to have an overall budget percent break down as follows:
• A larger part of the budget should go to salaries and benefits (65%).
• 10 percent for admissions and marketing.
• Around 5 percent for financial aid (this can go up to 11 percent for day).
• Another 5 percent for financial contingency.
• And lastly, 15 percent for everything else.
To elaborate, running a medium scale but a standard private school in the U.S. is estimated to be around $1 million. This amount includes both the starting costs and salaries (a running cost) of all the staff for the first 3 months of business.
Deerfield; a private school budgeted operating costs for 2017 showed the following:
• Around $12.6 million for tutoring instruction
• Roughly $5.9 million for student support
• About $475,000 for summer programs
• Approximately $8.1 million on operations and maintenance, as well as 11.9 million on general administration
• Nearly $6.3 million for depreciation and amortization
When it comes to determining the tuition fee to charge, most private schools start by projecting students enrollment for that year. “They then calculate the amount they will need for salaries and benefits — the biggest expense — plus academics and operations.” The tuition figure is arrived at by “dividing the cost by the number of expected students.”
The average cost for operating a private school is triangulated to range between $17,000 and $81,000 per child per year. This is a reasonable estimate given that the government of the united states spends roughly $12,509 per public school student and that private schools are known to be expensive.
Three private schools, the Altamont School, Crossroads Schools of Arts and Deerfield are the only private schools to have published their operating budget expenditure. We could triangulate the average operating cost per child using data from these organizations.
1. Crossroads School of Arts and Sciences
The operating budget for the school for the period 2016-17 was $50 million; during the period, the school had a total of 1,172 students. Therefore, the resulting average operating cost per child is estimated at $42,662.
2. The Altamont School
The operating budget for the school for the year 2018 is $6.7 million. It has a total of 376 students. Therefore, the resulting average operating cost per child is estimated at $17,819.
Deerfield budgeted $52.8 million on operating costs for the year 2017.
The school has a total of 648 students (79-day students and 569 boarding students). Therefore, the resulting average operating cost per child is estimated at $81,481 per child.
In conclusion, the research above profiles the operating costs or budgetary items incurred or expected in running a private school, with the key expense being salaries and benefits to teachers. There was limited data in addressing the question and much of it was scarce even in the best sources we found. We have also triangulated the average cost of operating a private school to be around $17,000 and $81,000 per child per year.