Below is an updated version of something I wrote in May 2018. I think it is useful and timely in understanding the financial challenges faced by private schools and especially Chapter 766 schools.
Tuition receipts for private schools leave little room for discretionary spending. Eighty-five percent of operating costs are typically used for salaries, taxes, and fringe benefits; twelve percent of operating costs are used for contractual and facilities related expenses such as audit fees, legal fees, rent, utilities, maintenance and property and liability insurance. This leaves about three percent of operating expenses for discretionary spending like program supplies, staff training, and other operating expenses. This breakdown of expenses is true for most private schools, including Chapter 766 schools like Learning Prep.
Unlike truly private schools, Chapter 766 schools do not have the option to raise tuition annually, except by the state adjusted Cost of Living Allowance, which will be 2.72% for the 2020/2021 school year. In addition, 766 schools are not allowed to reduce tuition beyond the state approved levels. Furthermore, they are not allowed to significantly modify how they spend their funding. Tuition, staffing levels by position, average salaries, and operating expenses are set and monitored by the Massachusetts Department of Elementary and Secondary Education (DESE) and the Massachusetts Operational Services Division (OSD). Tuition and spending levels are reset every six years by going through a process with DESE and OSD called Program Reconstruction. Learning Prep’s Program Reconstruction was approved on November 1, 2019. This has allowed us to adjust staffing and invest in technology to better meet the needs of our student population.
In order to be able to invest in the welfare of staff and students and add new initiatives, private schools, Chapter 766 schools, colleges, and universities engage in fundraising. In addition, many public schools have Education Foundations and other groups actively engaged in raising funds for initiatives that public tax dollars do not meet. As a parent of two children who went through the Arlington Public Schools, I saw how the Arlington Education Foundation and the Performing Arts Parent Association were very active in raising additional funds for the benefit of students and faculty.
Due to the generosity of the Learning Prep community, and the approved Program Reconstruction, we have been able to make many improvements to our program, including adding a state-of-the art library media center, a Makerspace classroom, iPads and Chromebooks for students, computers for faculty, and have provided technical training to faculty for iPads and Chromebooks. The combination of Program Reconstruction and continued fundraising will allow us to continue to address the needs of our students and faculty and invest in our future and continue to improve our infrastructure.