OT: CrazyPaco (re. Falk School)

[UkiePanther]

I have no idea if you'll know these answers, but you seem to know absolutely everything about the university and it's history, so I'll give it a shot.

A relative of mine works at the Falk School(for those who don't know, it's a K-8 laboratory school on the hill) , and had just told me that they'd be over budget for years(by a substantial amount) and that they were letting go of great teachers left and right. Pitt even issued bonds a few years ago to cover how over budget the school had become. It's so hard for me to think that with the tuition from each student, which isn't cheap, couldn't cover their expenses, considering they don't pay their teachers nearly as much as a public school. I guess my questions are..

1. What exactly is the school's affiliation with Pitt, and why does Pitt continue to fund them if they are losing money? There have been plenty of laboratory schools affiliated with universities that have been shut down across the country. What's different about Falk?

2. I know people on this board used to joke(or maybe not) that we should use our endowment to build a stadium. But really, isn't supporting a school you're affiliated with exactly what an endowment is meant to help? All I've ever understood about endowments were that they were a just-in-case fund to help support the university.. but if Falk is part of the university, why would they seriously have to issue bonds to help the school out of the hole.

Any light you could shed on this, or anyone else for that matter, would help. Thanks.

 

[CrazyPaco]

Originally posted by UkiePanther:
I have no idea if you'll know these answers, but you seem to know absolutely everything about the university and it's history, so I'll give it a shot.

A relative of mine works at the Falk School(for those who don't know, it's a K-8 laboratory school on the hill) , and had just told me that they'd be over budget for years(by a substantial amount) and that they were letting go of great teachers left and right. Pitt even issued bonds a few years ago to cover how over budget the school had become. It's so hard for me to think that with the tuition from each student, which isn't cheap, couldn't cover their expenses, considering they don't pay their teachers nearly as much as a public school. I guess my questions are..

1. What exactly is the school's affiliation with Pitt, and why does Pitt continue to fund them if they are losing money? There have been plenty of laboratory schools affiliated with universities that have been shut down across the country. What's different about Falk?

2. I know people on this board used to joke(or maybe not) that we should use our endowment to build a stadium. But really, isn't supporting a school you're affiliated with exactly what an endowment is meant to help? All I've ever understood about endowments were that they were a just-in-case fund to help support the university.. but if Falk is part of the university, why would they seriously have to issue bonds to help the school out of the hole.

Any light you could shed on this, or anyone else for that matter, would help. Thanks.

Well, I'm in no way versed with Falk School's financial difficulties, but Falk is part of the School of Education. It is their laboratory school. As such, it, and the building, are owned by Pitt. In fact, Pitt added a 38K square foot addition on to it in 2012. They've been increasing enrollment too over the recent years, up over 400 I believe. Demand is high, or so I thought.

You have to remember, endowments can only be spent on the purpose they are designed for, so people would have to donate to a Falk School-specific endowment, which would be part of Pitt's overall endowment. However, Pitt, through the School of Education, has certainly subsidized Falk over the years. I'm sure the bonds that were issued were to pay for the physical expansion of the school.

What Falk is, when you boil it down, is essentially a private prep school. It is at $13.3K in tuition currently. Compare that to tuition at Shady Side Academy ($19K for 2-5th grade, 24K for 6-8th grade). Winchester Thurston School is $20-23K for those ranges. In comparison, you can see how tuition at Falk is likely not covering expenses to operate the school, and the rest of the budget has to be made of by the School of Education. That is the bottom line.

 

[UkiePanther]

Originally posted by CrazyPaco:

Originally posted by UkiePanther:
I have no idea if you'll know these answers, but you seem to know absolutely everything about the university and it's history, so I'll give it a shot.

A relative of mine works at the Falk School(for those who don't know, it's a K-8 laboratory school on the hill) , and had just told me that they'd be over budget for years(by a substantial amount) and that they were letting go of great teachers left and right. Pitt even issued bonds a few years ago to cover how over budget the school had become. It's so hard for me to think that with the tuition from each student, which isn't cheap, couldn't cover their expenses, considering they don't pay their teachers nearly as much as a public school. I guess my questions are..

1. What exactly is the school's affiliation with Pitt, and why does Pitt continue to fund them if they are losing money? There have been plenty of laboratory schools affiliated with universities that have been shut down across the country. What's different about Falk?

2. I know people on this board used to joke(or maybe not) that we should use our endowment to build a stadium. But really, isn't supporting a school you're affiliated with exactly what an endowment is meant to help? All I've ever understood about endowments were that they were a just-in-case fund to help support the university.. but if Falk is part of the university, why would they seriously have to issue bonds to help the school out of the hole.

Any light you could shed on this, or anyone else for that matter, would help. Thanks.

Well, I'm in no way versed with Falk School's financial difficulties, but Falk is part of the School of Education. It is their laboratory school. As such, it, and the building, are owned by Pitt. In fact, Pitt added a 38K square foot addition on to it in 2012. They've been increasing enrollment too over the recent years, up over 400 I believe. Demand is high, or so I thought.

You have to remember, endowments can only be spent on the purpose they are designed for, so people would have to donate to a Falk School-specific endowment, which would be part of Pitt's overall endowment. However, Pitt, through the School of Education, has certainly subsidized Falk over the years. I'm sure the bonds that were issued were to pay for the physical expansion of the school.

What Falk is, when you boil it down, is essentially a private prep school. It is at $13.3K in tuition currently. Compare that to tuition at Shady Side Academy ($19K for 2-5th grade, 24K for 6-8th grade). Winchester Thurston School is $20-23K for those ranges. In comparison, you can see how tuition at Falk is likely not covering expenses to operate the school, and the rest of the budget has to be made of by the School of Education. That is the bottom line.

Thanks for the response. I guess this is where I don't understand endowments much, but if Falk is part of the School of Education, doesn't that fall under the University of Pittsburgh umbrella as far as their endowment? Why would there have to be a Falk specific endowment? This is more of a hypothetical I guess, but curious nonetheless.

 

[TIGER-PAUL]

You'd think that tuition would cover more. About 4X local catholic k-8.

 

[CrazyPaco]

Originally posted by UkiePanther:

Thanks for the response. I guess this is where I don't understand endowments much, but if Falk is part of the School of Education, doesn't that fall under the University of Pittsburgh umbrella as far as their endowment? Why would there have to be a Falk specific endowment? This is more of a hypothetical I guess, but curious nonetheless.

Almost all endowed funds are donated with specific intent: for a scholarship for a linebacker, for funding a professorship in the cancer center, for supply funds to bring in a speaker on art history...etc, etc, etc.

The disbursement of funds from these gifts are restricted by law to support the stipulated intention of the gift.

So when someone donates $100K to create a named endowment for a scholarship given to six toed students from Kansas, what the person is actually doing is creating a fund that is buying shares (like a mutual fund) in the university's overall endowment investment pool (which is that $3.5 billion number you hear thrown around). The endowment pool is invested so that the annual return on the investment is used for the following purposes 1) to provide support to the stipulated purpose of the gift 2) to ensure purchasing power is never reduced (e.g. that is, ensure that it keeps up with inflation by adding more to the principal).

By law, the principal cannot be dipped into. Also by law, the amount (%) that is disbursed every year is capped and also has a floor...this ensures that the endowment never runs down, but also, that it is actually used to fund its intended purpose and not just hoarded. At Pitt, a 3-year average of the value of the pool return is used to determine the % distribution for any year. Typically it is around 4.5%, which is a typical distribution percentage for endowments.

So, that $100K endowment gift would provide a $4,500 scholarship per year, every year, forever, to a six-toed student from Kansas. And, if Kansas ceased to exist for some reason, the university would have to go orphan court to change the legally bound beneficiary of that endowment fund disbursement. The amount, if managed correctly, would increase in proportion with inflation.

So people throwing around billions in endowments as some sort of end-all measure of financial wherewithal general are not well versed in what they actually are. It is not like some slush fund that can be dipped into. It doesn't work like that at all. There are some unrestricted funds, and all endowments, in some way, subsidize the operations of the university, but endowment disbursements are only one part of the overall budget and financial decisions of the university, and at Pitt, it is only the 5th largest source of operating revenue for the university.

This post was edited on 3/5 12:21 AM by CrazyPaco

 

[JED_72]

And at $13.3K tuition . . . it is $700 less than tuition to attend the School District of Pittsburgh.

This post was edited on 3/4 9:32 PM by JED_72

 

[CrazyPaco]

Originally posted by TIGER-PAUL:
You'd think that tuition would cover more. About 4X local catholic k-8.

Northside Catholic is $3.4K, but Carlow's catholic elementary school, which I believe is a Montessori type, is $11.4K. Falk is $13.3K.


Why do you think it is more expensive to send a kid to a prep school than a Catholic school? because they don't just pull tuition numbers out of the air

This post was edited on 3/5 12:13 AM by CrazyPaco