Running the Catlin Gabel School is a massive operation, and with nearly $17 million to spend on 54 acres, 751 students, and 200 faculty and staff members, the flow of money is complicated and carefully orchestrated.
The school’s budget, based on revenues from donations and tuition, is spread across the entire campus, and the organization of expenses is particularly sophisticated in the Upper School. From guest speakers to Campus Day donuts, the financial side of Catlin Gabel allows the school to maintain the unique services and traditions students and faculty have come to expect.
Catlin Gabel holds 501(c)(3) tax-exempt status, meaning it is a non-profit organization that makes no money off of the enterprise of teaching and learning. As a result, tuition is the single biggest annual revenue source, constituting 85% of the school’s 2012-13 income. The other 15% comes from gifts and other donations.
Tuition alone covers nine to 10 months of the school’s total operating budget. The fiscal year ends on August 31, but with only tuition the school would run out of money in mid-June. The rest of June through the end of the school’s fiscal year is covered by gifts used in operations, transfer from the endowment, and various other sources of income.
Gifts used in operations means that people donate money to be used specifically to help run the school. “We get lots of gifts for various reasons,” says Joe Walsh, the school’s controller. “Lots of financial aid. We’ll get gifts in for speakers, robotics, outdoor [education].”
Catlin’s chief financial officer Terry Murphy says, “The string that is attached is [that gifts are for] for operational things. [Not] capital things. So it will never go to a building, it will go to some operating expense. And a great many of those dollars, the vast majority of those dollars come in with no specific purpose other than operational things.”
However, in the case that a gift goes to a specific purpose, that gift will run through the development office and then go to the business office. Then Murphy and Walsh ensure the funds are spent on that specific purpose, whether in the current year or further down the road.
“That’s our job,” says Walsh, “to make sure [gifts] go to the right place.”
Operational gifts, such as donations to the art building, are entirely separate from gifts to the endowment, such as the Knight gift.
About five percent of the school’s budget comes through a transfer of a portion of earnings and appreciation from the endowment. The endowment is worth $25 million, and is managed separately from other funds by an investment advisor. An endowment committee made up of board members takes responsibility for endowment gifts.
(Graphic: Emi Foster)
Once the business office has an idea of how much money it will have to work with, the process of budgeting can begin. Allocating the substantial funds requires the collaboration of the board of trustees, Murphy, Walsh, and the division heads.
Almost 80 percent of the school’s yearly budget is devoted to paying the salaries and benefits of the faculty and staff. The remaining 20 percent––somewhere in the ballpark of $3.4 million––goes to instructional costs, information technology, facilities and maintenance, administration, and contingencies and reserves.
That 20 percent is what funds the budget decisions that run through the various committees and, ultimately, the board. Two groups, the executive team and the finance committee, primarily control how that money is spent.
The executive team is often where planning begins. The group that consists of Head of School Lark Palma, Director of Advancement Miranda Wellman (Development), Director of Human Resources Linda Yoesel, CFO Murphy, and the four division heads––Upper School Head Dan Griffiths, Middle School Head Barbara Ostos, Lower School Head Vicki Roscoe, and Beginning School Head Hannah Whitehead.
Each division head meets with Murphy and Palma to “lay out what they want to do strategically, how to balance the budget, and what they want to increase,” says Griffiths. Then the whole group will convene to determine the most important goals for the whole school, and accordingly budget requests are sent to the business office for Murphy and Walsh to process and fit into the overall budget. From year to year the forecasting for each sub-budget within the total $17 million is based on the previous year’s budget and how the need for money will change in the current year.
For the most part, budgets remain similar from year to year, but change slightly based on inflation. In the case that the school wants to devote more money to a specific area or purpose, the school has to find money to cut in other areas.
“Really we’ll capture all the numbers, and if it doesn’t look financially plausible we’ll send it back to the executive team and they’ll send it back [to us again],” says Walsh.
Once the executive team and business office have worked together on divisional budgets, the decisions go to the financial committee, which is a collection of board members, interested parents, Walsh, Murphy, and Palma. It is chaired by school treasurer and trustee Eric Rosenfeld ’83. After the financial committee reviews budgets, the board of trustees has to give the final stamp of approval.
After all the budget forecasting, deliberating, approving, and implementing are complete, the business office will have squeezed out every last drop of any given year’s budget.
“Fundamentally, we break even,” says Murphy.
Adds Walsh, “We’ll spend the whole 17 million.”
The Upper School
This year, the Upper School is at its biggest-ever enrollment, with 306 full-time students, 46 faculty members, and a $24,750 tuition rate. Therefore, the amount of that $17 million allocated to the division is significantly larger than the amount allocated to any other part of the school.
Within the Upper School budget there are funds for each department, as well as athletics, robotics, PLACE, and the outdoor education program. Much of this money comes from the “instructional costs” portion of the school’s total budget, which basically covers costs for curriculum and classroom-based needs.
Each department receives money based largely on the number of “consumable expenses” it anticipates and its yearly equipment costs. Because of this, the art, science, and theater departments receive roughly ten times as much money on an annual basis as the English, history and math departments; modern language receives a bit more than the last three so that it can fund things like the Miracle Theater performances and various field trips.
From year to year the department budgets remain roughly the same, but are adjusted according to inflation and changes in curricula or courses. The department chairs are responsible for requesting money and distributing that money to their departmental colleagues.
According to Dan Griffiths, who has sole possession of the complete Upper School budget numbers, art, science, and drama require the most materials, and keeping the curriculum current requires adapting to new equipment and supplies.
He learned this during his time as head of the science department, when he would have to carefully manage the yearly budget to cover the cost of lab kits and equipment maintenance while still planning for large future expenditures. “You have to sort of plan strategically,” says Griffiths. “It’s the same with replacing media arts equipment as it becomes obsolete.”
While art, science, and theater may need budget increases year to year, and almost invariably spend most of their money, that’s not always the case with humanities and mathematics, which require far fewer supplies. History is a prime example of a relatively low-maintenance department.
According to department chair Peter Shulman, the history department has a budget in the hundreds, and the current allotment is only half of what the department received ten years ago when he began teaching at Catlin.
“We do something that bureaucracies rarely do, which is we don’t spend our whole budget,” says Shulman. “That’s not how we roll. We have never come in over budget in my tenure as department chair.”
At the same time, Shulman says this has to do with changing technologies and teaching methods that remove consumable costs the department may once have had. “In some ways materials were more expensive before you had digital. There’s so much free material that you didn’t have earlier.”
Outside of the money that funds separate departments, each teacher receives $500 per year to spend on books, conferences, and other expenses that contribute to professional development. There’s also a pot of money devoted to bigger conferences and research projects––for example, science teacher Veronica Ledoux spent time teaching science in South African townships this summer––that any teacher can apply for through the professional development committee.
Funds like these contribute to the school’s overall aim to support innovation in all aspects of teaching while still maintaining a balanced budget. This goal also applies to how Griffiths decides to distribute money to teachers and departments.
“It’s my job to have a global view––a really tight view of what’s going on in the Upper School. And not everyone is going to agree with what we do.”
For Griffiths, the focus of budgeting should be on progress over tradition, which can also be a difficult pill to swallow for some.
“Rather than just saying, ‘Okay, you’ve done that for a while, it’s time to stop doing it,’ it’s constant examination of what it adds to the program,” says Griffiths of examining classroom funding. “If we’re just doing this because that’s just what we do, that’s not a very good reason to not fund something else. That’s kind of lazy.”
In the event that budgeting does goes over, or one program takes an unexpectedly large amount of money, there are several options for recourse. The first is that the school starts each year with a small amount of the planned expenses called “contingency and reserves” that can supplant any shortfall in the rest of the budget. As the business office finalizes the projected expenses for the year, this pool of money shrinks, but a small amount (less than four percent of the total budget) is always available for emergencies.
The more likely outcome of an overspending situation is that Griffiths must creatively redistribute the funds at the Upper School’s disposal. If one department or budget item––such as substitute teachers, for example––falls short, Griffiths will take money from another pool that may not need its total allotted budget for the year.
Ultimately, it does not matter exactly where the money is pulled from, as long as the budget is not exceeded. “At the end of the day it’s just the bottom line that counts,” says Griffiths.
Fortunately, Griffiths––and the rest of the school––has quite a bit of money to work with, and Catlin is thriving financially.
“We are hugely lucky to have the sort of resources we do and to have this much money to staff small classes in well-equipped rooms and not have to make the sort of tough decisions that public school districts regularly have to do,” says Griffiths.
Still, that doesn’t necessarily make budgeting $17 million dollars particularly easy, especially with so many departments and programs to fund.
“It never occurs to you that that’s the size of it,” says Griffiths. “This is a multi-million dollar business. Until you actually have to sit down and start deciding where to spend it. And it’s really, really easy to spend $10 million. Before you know it it’s gone.”