Tuesday, December 23, 2008
Academy Forced To Trim Budget
By Andrea Schoellkopf
Journal Staff Writer
The Albuquerque Academy endowment, listed in the top 10 among the country's elite prep schools, has taken a 30 percent hit in recent months, prompting a hiring freeze and a 7 percent tuition increase to make up the difference.
In a letter this month to parents and teachers, head of school Andrew Watson said the school must cut its budget by $3 million to compensate for the loss in its $291 million endowment, suffered because of the collapse in the investment and real estate markets.
The school intends to increase fundraising efforts, freeze positions and cut spending for discretionary items, such as bottled water for staff, the most expensive professional development and travel costs.
"Endowed institutions are perceived as fortunate, which we are," Watson told the Journal. "At times like this, you're better off being tuition-driven.
The cuts will not affect financial aid, which supports a needs-blind admissions policy, he said. " ... Almost everything on the campus would be cut before we cut that."
The school, with 1,100 middle- and high-schoolers, also plans to open more slots in the upper grades for qualified students, have parents help pay travel costs for student competitions and raise tuition from $15,500 annually to more than $16,500.
The Academy uses 4.7 percent, or $13 million, of the endowment annually towards its $35 million operating budget. The remainder comes from tuition.
In a January 2008 New York Times article, the Academy was ranked 10th among prep schools for its endowment size.
Hits to the real estate market caused about half of Academy's endowment loss.
The endowment was started after New Mexico financier Albert G. Simms and his wife, Ruth Hanna McCormick Simms, donated 12,000 acres between 1957 and 1964. Over the years, the endowment grew with land-use development.
Most other independent schools in Albuquerque are primarily tuition-based, with endowments ranging from $1 million to $5 million.
"It's kind of a blessing not to have a large endowment right now, which is amazing," Sandia Prep headmaster Dick Heath said. "We are in no way impacted the way they are (at Academy)."
Manzano Day School for elementary students has an endowment of just over $2 million and expects a 3 percent tuition increase next year. "Our endowment loss shouldn't have any effect on operations next year, unless we see a severe loss in enrollment," head of school Neil Piltch said.
The endowment at Bosque School has lost about 30 percent. Officials would not give the size of the endowment but said they do not anticipate budget cuts.
Despite economic troubles, some private schools in Albuquerque are seeing more interest from parents than usual and expect a rise in financial aid applications.
"People kind of hunker back and they decide what's important in their lives," Heath said. "One of the last things they're going to sacrifice is education."