Novel Funding Plan For Private Schools Termed Successful
A novel plan for financing private schools based on parental income rather than a fixed tuition rate has been called an unqualified success by the independent researcher commissioned to evaluate it.
Thomas Vitullo-Martin, chief author of a report on the "tuition-reform plan" developed by the Manhattan Country School in New York with support from the Ford Foundation, called the plan "a practical approach that can be followed by all private schools."
Mr. Vitullo-Martin is research director of Metroconomy, Inc., a private research and consulting firm that studies public policy. He has been recording the development of the school's unusual alternative to traditional financing for the past several years. Founders, parents, and administrators first began discussing the idea more than 10 years ago.
Mr. Vitullo-Martin's evaluation of both the process and the results, called Tuition Reform for Private Schools: The Manhattan Country School Plan, was released last week.
The plan was adopted in 1972-73 by the New York City-based school, which was founded in 1965, according to the evaluation, "to deal with the failure of school integration and education" in the city.
"More self-consciously and aggressively pluralistic than most
private schools," the school established, in lieu of tuition, a "family
commitment" that is a reflection of the family's income, in order to
encourage a racially
and economically heterogeneous student body.
Under the terms of this "radical departure" from traditional financial practices in private schools, families below the poverty line are required to pay as little as 3 percent of their income, and families at or above median-income level are required to pay up to 10 percent of their income.
For higher-income parents, the school establishes a "mandatory component" of the commitment which is equal to the actual cost-per-child.
The rest of the family commitment is voluntary. Voluntary contributions to tax-exempt schools can be deducted from a family's income tax, while tuition and fees cannot.
The maximum compulsory fee--which reflects the actual cost-per-child--at the Manhattan school is 15 percent higher on the average than tuition at comparable private schools that use gift income for operating costs, thus lowering tuition.
But the school requests no donations from parents other than the voluntary portion of the "family commitment" for higher-income families.
Although lower-income families pay lower percentages, Mr. Vitullo-Martin said, the school believes that the lower percentage produces an "effort equal to the higher-income families' 10 percent."
"Almost all Manhattan Country School parents, including the very wealthy families who use the school, have accepted the plan," he said.
The school's founder, Augustus Trowbridge, notes that the plan evolved through a "group process which eventually occupied 38 public meetings with active participation by three-quarters of our parents."
Mr. Vitullo-Martin said that a few schools in the country use a similar plan, but that "nobody does it in such a rigorous and formal way.''
He outlined several advantages of the system in his evaluation.
One is that the plan has allowed the school's revenues to increase automatically as inflation has pushed up family incomes.
Perhaps more importantly, he said, the plan decreased the "divisiveness" between the "haves" and the "have nots" that existed when the school relied heavily on scholarships to maintain equitable racial and social balance.
The Manhattan Country School (so called because the school operates a year-round farm for students in the Catskill Mountains) is cited as the most racially, ethnically, and economically balanced school in New York City by Mr. Vitullo-Martin.
Of the 56 percent of the students who are white, some come from various Protestant backgrounds, some are Catholic, and some are Jews. Forty-four percent of ths school's 186 students are black (Protestant and Catholic), Hispanic, and Asian.
"I think the most interesting thing is the way the plan concentrates resources on the needy without creating class distinction," Mr. Vitullo-Martin said.
Many schools have found that scholarships create undesirable social distinctions, Mr. Vitullo-Martin said. "To receive a scholarship, a family must not only admit, but also demonstrate its inability to pay what other families in the school are asked to pay."
Mr. Trowbridge said his school's previous system of scholarships was "patronizing and divisive," setting up a marked contrast between those who paid full tuition and those who were "beneficiaries."
The school's original scholarship program required, after full financial disclosure, that families pay 10 to 15 percent of their net annual income as their share of their childrens' educational expenses.
As Frank Roosevelt, professor of economics at Sarah Lawrence College and chairman of the Manhattan school's tuition reform committee, said in a discussion of the problems of its previous traditional finance system, scholarship families tended to feel they were receiving charity from the school while the wealthier, full-tuition-paying families felt they were "paying their own way," or perhaps even subsidizing the education of someone else's children.
Mr. Roosevelt also said the system was often inequitable. Families receiving scholarships had to provide full financial disclosure while full-tuition families did not. The scholarship families also felt that they had less influence on the school than wealthier families.
"Like most private schools," he explained, "we had been using general contributions to keep tuition down for every student, and collecting other contributions for scholarships. Then we realized that the general contributions were aiding even our wealthiest families, who neither wanted nor needed help, while our scholarship families were paying at least 15 percent of their income in tuition."
Mr. Vitullo-Martin believes the Manhattan Country School's system would be useful for all private schools, especially Catholic and Lutheran schools, which have become increasingly dependent on tuition income in the past 10 years.
In 1965, he pointed out, more than 90 percent of the private-school students in the country attended Catholic or Lutheran schools that were in most cases substantially subsidized by their parishes.
The remaining 10 percent attended independent private schools supported principally by tuition income. In that year, tuition income accounted for about 18 percent of total income for Lutheran schools and 25 percent for Catholic schools.
For most of the five million private-school elementary students in 1965, tuition was less than $50 per year.
Today, both Catholic and Lutheran schools depend on tuition to provide about 40 percent of their income.
As tuition in these schools has risen, Mr. Vitullo-Martin said, it has become more difficult for the poor to afford them.
The Manhattan Country School's solution is particularly applicable to religious-affiliated schools, he said, because it asks parents to continue their normal giving practices to support the schools.
"It asks them to tithe (to give a tenth)," Mr. Vitullo-Martin explained, "which is of course a return to the traditions of the church schools, supported by families that tithed to the parish, with the parish subsidizing the schools."
Copies of the evaluation report, which contains a detailed explanation of the creation and implementation of the Manhattan Country School plan, are available for $3 from the Manhattan Country School, 7 East 96th St., New York, N.Y. 10028.
Vol. 01, Issue 17