Spring Business Conference –Wednesday, April 30, 2014

1. Will This Upward Spiral Ever End?Tackling the Affordability IssueWith increasing pressures on operating budgets on the one hand, continued economic uncertainty, unemployment, and family financial pressures on the other, in the face of an alternative, affordable public school education option, can independent schools continue to increase tuition at the current rates? Spring Business Conference –Wednesday, April 30, 2014 Moderator: Elizabeth Jick Zions First National Bank Panelists: Carolyn Flammey SSDS of Greater Boston, Inc. Jim Skrumbis Sierra Canyon School Timothy Parson Beaver Country Day School Bernice Bradin Lesley University 1

2. Framing the Dilemma 2

3. Tuition levels are steadily rising - - with no end in sight! Educational institutions today face a BIG problem… 3

4. The Problem for Independent Schools: Total Operating Costs continue to rise • Salaries/Benefits • Health Care/Insurance • New Programs • Capital Expenditures • Deferred Maintenance 4

5. The Theoretical Solutions: These costs can be covered through a combination of: • Raising Tuition Levels • Fundraising/Development Efforts • Increasing Endowment Spending • Reducing Other Expenses 5

6. Average Annual Tuition - - Traditional Day Students *Data provided by AISNE and NAIS. AISNE: 5.28% NAIS: 4.32% CPI: 2.36% Average Annual Increase Over Last 10 Years: 6

7. Who is Paying the Tuition? 7

8. Independent School Average Tuition Levels: *Data provided by AISNE and NAIS. 8

9. What Are The Key Financial Drivers Other Than Tuition Levels? Expenses Revenues 9

10. More Aggressive Approaches to Increasing Tuition Levels • Proactive Marketing to New Families • Launching Capital Campaigns • Identifying Facility Rental Opportunities • Outsourcing Services to Reduce Overhead • Eliminating Operating Inefficiencies • Postponing Projects/Cap Ex/Reserve Allocations 10

11. “The world we have made as a result of the level of thinking we have done thus far creates problems we cannot solve at the same level of thinking at which we created them.” “A new type of thinking is essential if mankind is to survive and move to higher levels.” - Albert Einstein 11

12. Solomon Schechter Day School of Greater Boston Presented by: Carolyn Flammey Director of Finance & Operations Solomon Schechter Day School of Greater Boston 12

13. SSDS of Greater Boston • Founded in 1961 • Located in Newton, MA • Nursery School through 8th Grade • Co-Ed Conservative Jewish Day School 13

14. SSDS of Greater Boston • 2014 Enrollment: 508 • 2014 Budget: $13,000,000 • 2014 Tuition: $24,400 • FA % of Tuition Revenue: 26% 14

15. The Problem • In June 2009, Schechter’s major feeder preschool closed • At risk: • $250,000 rental income • 9-12 kindergarten students • Vacant rental property 15

16. The Research • Market research suggested interest in • High quality preschool • Judaic and Hebrew curriculum • Full day • Starting at 15 months • Parents from former preschool and current SSDS parents also strongly in favor 16

17. Considerations • Support of Board and administration • Financial risk • Start up costs • Loss of rental income • Bandwidth • Community reaction • Feeder schools • Synagogues 17

18. Decisions • Kindergarten feeder vs. income maximization • Governance • Integration with SSDS • Admission policies • Financial aid • Curriculum 18

19. Results • Opened September, 2011 • Full preschool enrollment • Strong kindergarten feeder • Generates annual surplus (though less than previous rental income) • Feeder preschool relations improving slowly 19

20. Beaver Country Day School Presented by: Timothy Parson Director of Finance and Operations Beaver Country Day School 20

21. Beaver Country Day School • Founded in 1920 (as All–Girls School) • Located in Chestnut Hill, MA • Grades 6th through 12th Grade • Co-Ed Progressive Day School 21

22. Beaver Country Day School • 2014 Enrollment: 458 • 2014 Budget: $19,700,000 • 2014 Tuition: $39,950 • FA % of Tuition Revenue: 19.7% 22

23. Beaver – NuVu (MIT) Partnership Background: Fall, 2009 School • Financially solid • 425 students; campus at capacity • Wants to pursue more hands-on project-based learning NuVu • MIT graduate student venture exploring “studio” learning model • Limited financial resources • Looking for secondary school to pilot with 23

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25. Start-up Phase Winter 2009-10: Board and internal discussion Spring 2010: Pilot with 20 seniors in space rented from MIT Media lab decision to do full-year for FY11 made in late spring Concerns: Integration with curriculum, cost, logistics Some fundraising to blunt initial costs “Make glorious mistakes!” 25

26. Where We Are Now • NuVu is in its own rented space in Central Square • Changing array of guest “inspirers” lead studios on different topics • 20 Beaver students (or more) per term go to NuVu by bus each day • Some students from other schools also attend • Covered by school tuition for Beaver Students (we pay NuVu a fee per student) • Beaver enrollment is 25 students higher 26

27. Benefits • Huge programmatic success – changes to curriculum, school facilities & mindset • Has bolstered Admissions demand • College list more innovative, tech-y – Stanford, Carnegie Mellon • And has boosted bottom line! (enabling more internal funding of projects) 27

28. Sierra Canyon School Presented by: Jim Skrumbis Head of School Sierra Canyon School 28

29. Sierra Canyon School • Founded in 1978 (as For-Profit School) • Located in Chatsworth, CA • Grades Kindergarten through 12thGrade • In 2006, converted to a Non-Profit and added a High School • Co-Ed College Preparatory School 29

30. Sierra Canyon School • 2014 Enrollment: 990 • 2014 Budget: $31,800,000 • 2014 Tuition: $29,400 • FA % of Tuition Revenue: 20% 30

31. Lesley University Presented by: Bernice Bradin Vice President and Chief Financial Officer Lesley University 31

32. Lesley University • Founded in 1909 (as All-Female College) • Located in Cambridge and Boston, MA • Co-Ed University with Graduate Programs • Specializes in teacher education, psychology, and the arts 32

33. Lesley University • 2014 Enrollment: 5,195 • 2014 Budget: $118,535,000 • 2014 Tuition: $32,000 • FA % of Tuition Revenue: 15% (40% for under graduate students) 33

34. Lesley University Budget must always be balanced with a small surplus Graduate schools vs. Undergraduate schools Declining enrollment trends Steps to reverse trends 34

35. Lesley University Four distinct schools serving unique markets • LUCLAS undergrad -- College of Arts and Sciences Was all female until 2005; now 20% male; enrollments up • LUCAD undergrad and grad – College of Art and Design Merged with LC in 1998; enrollments down • GSOE – grad – School of Education For 20 years had a near monopoly on National cohort model added hybrid/low residencies/on-line; enrollments down • GSASS --grad school of Arts & Social Sciences Counseling Psych and Expressive Therapies Israel Program phased out by government; other enrollments up • Threshold Program –non-degree for young adults with learning disabilities; Enrollments stable. Given nature of program, cannot grow 35

36. Lesley University Steps to reverse trends of declining enrollments and lower revenue • Branding study • Identify causes • Revamped website • Build on strengths • Marketing and Advertising Campaign • Expense reductions • Cabinet Review Board for vacancy reviews • Systematic program reviews to determine if program should be sunset • Faculty retirement programs 36

37. Lesley University Undergrads • Tuition reset—align price with what paid • Urban Scholars Initiative • Partnerships with Community Colleges • 2+2 • 3 year degree • Retention focus • Addition of majors • New Art Center in Porter Square • Added internships to LUCAD • Engaged 3rd party to market on-line programs and recruit students 37

38. Lesley University Graduate Programs • GSOE • On-line marketing • Certificates and professional development • Sunsetting of low enrollment programs • GSASS • International programs like Guyana – intensive low residences • New programs in areas like Mindfulness • Revamped Intercultural into International Education 38

39. Lesley University Results • Tuition reset – too soon to know, but inquires have been up • Hybrid programs are a huge success at grad level • New Art Center still under construction • In CLAS, student numbers have stabilized 39

40. Summary SSDS of Greater Boston • Replaced lost revenues • Established its own feeder school • Increased enrollment Sierra Canyon • Increased enrollment • Created a more diverse student body • Identified new revenue stream Lesley University • Engaged marketing firm for online recruiting • Eliminated operational inefficiencies • Enrollment - - Stay Tuned! Beaver Country Day School • Created innovative program with MIT • Accommodated 25 additional students • Increased revenues 40

41. Summary Conclusions All Four Pioneering Institutions: • Faced the affordability problem in varying degrees • Thought creatively and BIG • Took calculated risks over approximately two years • Added extra costs to implement new programs • Through patience and perseverance, they succeeded to: • Identify new, non-traditional revenue sources • Enhance their reputations through their entrepreneurial visions • Alleviate a portion of the affordability burden 41

42. Q & A For more information please call Elizabeth Jick ejick@zionsboston.com (617) 969-3400 42

43. Will This Upward Spiral Ever End?Tackling the Affordability IssueWith increasing pressures on operating budgets on the one hand, continued economic uncertainty, unemployment, and family financial pressures on the other, in the face of an alternative, affordable public school education option, can independent schools continue to increase tuition at the current rates? Spring Business Conference –Wednesday, April 30, 2014 Moderator: Elizabeth Jick Zions First National Bank Panelists: Carolyn Flammey SSDS of Greater Boston, Inc. Jim Skrumbis Sierra Canyon School Timothy Parson Beaver Country Day School Bernice Bradin Lesley University 43