Affordable Tuition: Paths Forward

Written by Gabe Aaronson on . Posted in Features

In Part 1 of Kol HaBirah’s investigative series on Jewish day school tuition, we explored how the high cost of a day school education affects the Jewish community, and what supports local schools and institutions currently have in place. In Part 2, we identified some of the different challenges faced by Orthodox versus non-Orthodox schools as well as schools in the DC metro area versus schools in Baltimore.

For the third and final part of the series, we've sought out practical options for easing the financial burden on families while sustaining the diverse day school options our community has to offer.

Setting a Target

How much money would it take to have a noticeable impact on school and family finances? The experience of the Florida Jewish community can serve as a benchmark.

Florida’s school choice program provides about $1,980 per student to Florida’s Jewish day schools. The Florida program has made a tremendous impact for Jewish families and day schools, according Dr. Allan Jacob, president of TEACH Florida, a project of the Orthodox Union (OU). The additional money has enabled schools to hold tuition steady, improve school quality, and pay teachers on time, he said.

Based on Jewish day school enrollment figures from the National Center for Education Statistics and IRS and survey data used earlier in this series, raising an additional $2,000 per student would cost $5.5 million annually in the DC area (a 7.4 percent increase in per-student spending) and $8.4 million in the Baltimore area (a 17.5 percent increase in per-student spending).

What are the practical options for securing an additional $2,000 per student per year for Jewish day schools in Greater Baltimore and Greater Washington?

Tax Deductions

Jewish day school families could save thousands of dollars each if they could deduct tuition payments from their taxes. Unfortunately, the U.S. 9th Circuit Federal Court ruled unequivocally in Sklar v Commissioner of the IRS that no portion of Jewish day school tuition is tax deductible, said attorney Izaak Bozof of Fairfax, Virginia. Only an act of Congress could change this.

What about replacing a portion of tuition with a tax-deductible donation to your child’s Jewish day school? This would only work, said Bozof, if the donations were completely uncoerced and there was no quid pro quo. Any penalty for parents who don’t donate or benefit for parents who do would mean it wasn’t a tax deductible donation.

Peter Karpoff, a retired attorney from White Oak, Maryland, once worked with a non-Jewish private school in DC that tried this approach. The school considered lowering tuition and relying on each family to voluntarily donate enough to cover the difference. Karpoff said the effort failed because of the free-rider problem: Each family feared that the others would skimp in their donations. The idea may work in Jewish schools if families trust each other to pay their share.

Kehillah Funds

The idea of a kehillah (community) fund is that all community members, not just parents, should support local Jewish schools by donating to the fund. Once the donations come in each year, the kehillah fund allocates money to each local Jewish day school based on enrollment. Nesanel Siegal runs the Chicago Kehillah Fund in Illinois. In an ideal world, he said, everyone in the community would pay a voluntary “tax” to the Fund.

Currently, the Chicago Kehillah Fund has 1,500 regular contributors donating a total of $80,000 monthly — roughly $350 per Jewish day school student per year. This is close to the per-student allocations the Baltimore and Washington Jewish federations give to local Jewish day schools (about $650 per student and $470 per student, respectively).

Of course, there’s a reason taxes aren’t voluntary. According to the Berman Jewish Data Bank, the Fund’s 1,500 monthly donors constitute less than one percent of Chicago’s Jewish population. While the Fund’s $350 per student allocation makes a difference, Siegal said, it isn’t enough to measurably impact day school tuition in the Chicago area.

Nonetheless, the Chicago Kehillah Fund has successfully broadened the base of community members supporting Jewish schools: Half of the monthly contributors have no children attending a Jewish day school. Crucially, Siegal said, the Chicago Kehillah Fund has brought in new money to the Jewish day school system instead of simply poaching existing donors from schools. The money schools receive from the Chicago Kehillah Fund comes in addition to day school support from Chicago’s Jewish federation.

Any community can start a kehillah fund, he said, but a successful fund requires a full-time professional to fundraise and manage it. In Chicago, the Kehillah Fund was started by Dr. Yosef Walder, and his initial and ongoing support made it viable.

Perhaps an intrepid community member could start a kehillah fund in our community as well.

Community Endowments

The idea behind most endowments is that once a donation is made, the principal is invested and only the investment income is paid out each year. If we created a community-wide day school endowment that pays out 4.4 percent each year, then a $125 million community endowment would provide $2,000 to each day school student in the Greater Washington area, and a $190 million community endowment would do the same in Greater Baltimore. According to data from the Avichai Foundation, the endowments would need to grow by about 2.2 percent each year to keep up with enrollment growth.

The Jewish Federation of Greater Washington similarly estimated that a $100 million community endowment is needed to provide annual funding to seriously impact the affordability of DC Jewish schools. According to Marci Harris-Blumenthal, Federation’s managing director for Community & Global Impact, four years ago their working group on day school affordability considered a community endowment, but did not pursue the idea because raising $100 million was not realistic at that time.

Many day schools already operate their own endowments. According to the heads of school at the Charles E. Smith Jewish Day School (CESJDS) in Rockville, Maryland, and Krieger Schecter in Baltimore, the schools possess $33 million and $6 million endowments, respectively.

These endowments would be even larger if Jewish day schools had started amassing them earlier — CESJDS recently completed a two-year $18 million endowment campaign for its 50th anniversary. Randy Getz, co-chair of the Day School Commission (a standing committee of The Associated: Jewish Community Federation of Baltimore), said The Associated began working with local day schools to focus on endowment fundraising four years ago.

“If endowment thinking had been prevalent 30 years ago,” Getz said, “then we would be in a very different situation now.”

According to Siegal, the most practical way to raise money for such large endowments is through estate giving. Even current day school parents, burdened by tuition as they are, can afford to pledge five or 10 percent of their estate when they eventually pass, he said; and if everyone in the community made this commitment, schools could eventually reduce tuition by 50 percent or more.

As with a kehillah fund, organizing a community endowment in Baltimore or DC would require full-time professional staff to solicit estate pledges, track pledges over time, and collect when the time came. Given that estate pledges are generally not collected until many years later, this is not a short-term solution to the day school finance problem.

Another challenge faced by communal endowments (and it applies to kehillah funds as well) is that most people choose to donate to their school rather than to the school community at large, said Getz.

Government Support

Government support for Jewish schools has already brought significant relief to Jewish day schools in Florida, Pennsylvania, Wisconsin, Arizona, and several other states with school choice programs.

Maryland, too, has a government program; called BOOST, it provides $6 million in scholarships to private school families. To be sure, Jewish families receive less from Maryland’s program ($1 million last year) than from Florida’s ($17 million last year) or Pennsylvania’s ($7.5 million last year) programs. However, said Agudath Israel of Maryland Director Ariel Sadwin, in a heavily Democratic state like Maryland the BOOST program is a tremendous achievement. It’s the result of many years of advocacy and a close partnership among Jewish, Catholic, and other private school communities, he said.

Does the Maryland Jewish community have the political influence to expand BOOST to match the scale of the Florida and Pennsylvania programs? Probably not in the short term, said Sadwin; Many Maryland legislators, especially those in Montgomery County, view any school choice programs as an unacceptable attempt to undermine the public school system.

What would it take to score a victory in the long term?

The OU’s success in New York may provide a model that Marylanders can emulate. Their grassroots political advocacy campaign for government funding has brought an additional $450 million into Jewish schools in the state over five years.

What does a grassroots political advocacy campaign look like? “A new legislator visiting a local Jewish day school every other week, quarterly lobbying missions to the capitol with day school parents and students, and weekly contact between assigned community leaders and their legislators,” said OU-Teach NYS Policy Director Jake Adler.

The OU’s New York advocacy operation has five staff members dedicated to community engagement and day school affordability, plus a deeply engaged network of schools and lay leaders. A similar operation may be needed to move the needle in Maryland and Virginia.

Conclusion

With broad buy-in from the Jewish community, any of these approaches are feasible. Experience in other communities has shown that these approaches also require dedicated professionals, perhaps even entire organizations, to coordinate the community’s efforts.

This isn’t even a comprehensive list of everything we can do to make day schools more affordable and sustainable. For example, Getz emphasized that increasing enrollment in Jewish schools will make them more affordable, with the fixed costs of running a school spread among more students. He feels strongly that it is important for the community to focus its efforts on increasing non-Orthodox student enrollment in Jewish schools (a topic that Kol HaBirah plans to explore in a future issue).

It seems there are no quick or easy solutions here, but there are some slow and hard ones that would bring financial relief to Jewish schools and families —if the Jewish community is ready to roll up its sleeves.

By Gabe Aaronson

 Gabe Aaronson is a special correspondent for Kol HaBirah.