A Spiritual Investment
The Gesu School in Philadelphia was dying, until entreprenurial-minded donors got together to show a new way of keeping urban Catholic schools afloat.
The 8th graders bounded up the wide marble steps of the Lincoln Memorial on a warm spring afternoon. Even after a three-hour bus ride and a busy day of sightseeing in the nation’s capital, the 40 students of the Gesu School, a small, inner-city, K-8 Catholic school in Philadelphia, seemed fresh. Energetic, even.
But it wasn’t their energy that surprised him, says their history teacher, John J. DiIulio Jr., as he recalled that day in 1998. He remembers that as he labored to the top of the memorial to stand at the feet of the Great Emancipator, the students began to read aloud the words inscribed on the memorial’s south wall, below a mural of the angel of truth freeing a slave:
“Four score and seven years ago, our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.”
When the students, all African-American youngsters from the North Philadelphia projects, recited the Gettysburg Address in solemn unison, the tourists around them stopped talking. For a few moments, the great, echoing chamber of the memorial was hushed except for the children’s voices.
“It was stunning,” DiIulio says of the event that was part of his semester-long teaching stint at the school. “Hollywood couldn’t have imagined such a moment.”
What may also be stunning is how the Gesu School has transformed itself since 1993, when the Roman Catholic Archdiocese of Philadelphia shuttered its parish because of dwindling membership. It has gone from a school barely eking out an existence to one with a $5 million—and growing—endowment fund and a powerful, ecumenical board of business executives and other lay people.
The Gesu School, say some experts, is an example of an emerging national trend. As more Catholic schools are closing or consolidating because of declining enrollment and parish membership, and weak financial support, more schools—especially those in urban areas—are becoming financially independent, headed by business- and marketing-savvy lay boards with a spiritual commitment to helping the needy.
“It’s a growing phenomenon,” says Michael J. Guerra, the executive director of the Washington-based National Catholic Educational Association. “Catholic school leaders have become increasingly skilled to tell [their schools’] stories. … And [business] people get involved not just because they want to write checks, but because they want to make a difference.”
In 1993, the Gesu School taught 200 students on the second floor of a badly deteriorated building in a poor, drug-ridden neighborhood. It had almost no operating funds. It was a school with an uncertain future.
Today, the school is bursting at the seams with 433 neighborhood students, many of whom go on to academically competitive high schools. It boasts crackerjack leadership, development, and teaching staffs.
It has a well-regarded writing program, single-gender classes for the 3rd through 5th grades, a full-time counselor, and a panoply of after-school academic and enrichment classes, among other programs not often seen at the elementary and middle school levels.
And Gesu has a 57-member trustee board that includes some of the best business and philanthropic minds in greater Philadelphia. It was those backers, along with an administration anchored by a Jesuit priest and an Immaculate Heart of Mary nun, who shored up the Gesu School.
Now the school is adept at both helping students raise academic scores and coming up with the $1.7 million a year it takes to operate, says DiIulio, who is a trustee of the school and teaches political science at the University of Pennsylvania. DiIulio was President Bush’s first director of the White House’s Office of Faith-based and Community Initiatives, which seeks to enable religious groups to compete equally with other charities for federal dollars.
Gesu’s leaders say their secret was a simple but powerful message.
“This school is a sacred place serving a civic purpose,” DiIulio says. “That purpose is to effectively educate children who, under other conditions, would not go on to graduate from high school.”
Three stories above North Philadelphia’s narrow streets, the shouts of children ring in the air. On this clear February morning, the air smells like spring, and groups of 4th graders dart around the rooftop playground. They skip rope, shoot hoops, and swing yellow hula hoops.
The roof was the reason that the Rev. George W. Bur, the Jesuit who was then the Gesu School’s president, and Winston J. Churchill Jr., a venture capitalist (no relation to the British prime minister), met in 1991.
Or, rather, remet. In the late 1950s, they both attended St. Joseph’s Preparatory School, one of the top prep schools in Philadelphia. It stands next door to the Gesu School, whose name means Jesus in Italian.
More than 30 years later, they were back to discuss building a protective fence, or cage, around the roof so children could use it as a playground. After talking to Father Bur and meeting the students and teachers, Churchill agreed to help.
But the businessman had grander plans.
“I said, ‘I understand about the roof, but let’s go look at the books together,’ ” recalls Churchill, now the managing partner of Wayne, Pa.-based SCP Private Equity Partners and a director of such companies as Amkor Technology Inc., of West Chester, Pa.
“The school was losing a lot of money on an operating basis,” he says from his home at the end of the Main Line, Philadelphia’s famed string of old-money suburbs.
It was true. The school’s coffers were almost empty. At the time, the school needed about $1.1 million a year to operate. And most of its students could not afford the annual tuition, then $900.
“So instead of just a roof,” Churchill recounts, “I said, ‘How about [creating] a development board of directors and start fund raising?’ ”
Somewhat surprised, Father Bur agreed. He realized, he says, that Churchill had a “business sense of philanthropy.”
“Which is to say, ‘We know how to invest in tech companies. … Now let’s do some investing in children,’ ” says Bur.
That same afternoon, Churchill started calling likely donors, including Mark Solomon, the chairman of the CMS Cos., a financial-services company based in Philadelphia.
“He wanted my advice on how to raise money to keep this school alive,” Solomon says. “I said, ‘I’ll go with you one day to the school.’ He said, ‘No, I need you to come now.’ ”
Somewhat skeptical, Solomon agreed. The two men walked into the modest school, and Solomon asked a class of 4th graders what they wanted to be when they grew up. The first student said he wanted to be a pediatrician. The second, an astronaut.
Solomon was hooked. “It resonated with me,” he says. “Win was onto something,” he says of Churchill.
In many ways, the students at the Gesu School are typical of their neighborhood. More than 70 percent qualify for free or reduced-price meals, and 72 percent come from single-parent or grandparent homes. Many students have behavioral or emotional problems.
Not surprisingly, the students, who are accepted regardless of their test scores, enter the school two years below grade level.
In this blighted area of town, only 35 percent of high school students graduate. In comparison, 95 percent of Gesu students go on to graduate from high schools.
“When you have a track record like that,” says the Gesu School’s president and day-to-day executive, Christine Beck, “how can you not keep going?”
Saeed Briscoe cried when he first entered the Gesu School as a prekindergartner. But the student, now a polite 8th grader in a pressed white shirt, says he feels lucky he attends the school. His favorite subject is science, he says, and he plans to attend Drexel University to major in engineering or architecture.
“Gesu,” Saeed says, “tells you that you can do anything you put your mind to.”
Within three years, the fledgling board of trustees raised $1.7 million. The board also found donors to sponsor students, raising $275,000. More than one-third of that came from the Maryland province of the Society of Jesus, as the Jesuit order is formally known.
In 1997, the Gesu board kicked off the Children Succeeding Campaign. The goal: $3 million. Led by board member Ralph Saul, a former co-chief executive and chairman of the Philadelphia-based insurance company CIGNA Corp., the campaign raised $4.1 million by 1999.
That year, the board began the school’s first Annual Fund drive, raising $362,000 for operating costs. By then, it cost almost $1.5 million to operate the school annually.
Each succeeding year, the donations have risen, up to $853,000 in 2003-04. The goal this year, which the board expects to meet: $907,000.
In 2000, Churchill upped the ante. While the Gesu School was no longer in danger of shutting in the short term, its future still seemed precarious. How would the school fare in 25 years?
Tuition has risen to $1,895 per student, and 81 percent of Gesu students are on full or partial scholarships. In addition, tuition covers less than half of what it actually costs the school to teach each student: $5,200.
The answer: Create an endowment. Invested wisely, the returns could considerably lessen the amount the board must raise each year.
So Churchill said he would donate $1 million to the Gesu School if four other investors matched his contribution, for a total of $5 million.
It was a bold move. It took a few years, but by 2004, four other donors stepped up to the plate. The Gesu School’s board is now working to multiply the endowment, to perhaps $25 million in the next few years.
The school’s business model is one that should be replicated by other Catholic schools if they want to thrive in a changing environment, says the Rev. John J. Podsiadlo, a Jesuit priest and the director of the Nativity Network, a Baltimore-based group of 57 independent Catholic schools that serve largely poor African-American or Hispanic students nationwide.
Like the Gesu School, Nativity schools must do their own fund raising and marketing, and their boards are made up of lay people.
“There’s money out there,” Father Podsiadlo says. “People have to have an entrepreneurial mentality. The old model doesn’t work anymore.”
The main concern that some in the Catholic community have about lay people serving on Catholic school boards is whether those schools will be “diluting” their religious mission, says Guerra of the National Catholic Educational Association. But he says those Catholics shouldn’t worry.
“There are those who say, ‘We shouldn’t put our souls at risk,’ ” he says. “The answer: There are people out there who understand our mission, whether they’re Catholic or not.”
Win Churchill laughs when asked the board’s strategy to raise so much money in so comparatively little time. He says, “A great cause, that’s the first part.”
He pauses. “In fact, that’s the whole part. And simply to tell the whole truth about [the Gesu School] to people of goodwill. It’s really the people you know.”
More importantly, why would philanthropic heavy-hitters—some of whom aren’t even Catholic—raise hundreds of thousands of dollars year after year for a small inner-city school that neither they nor their children attended?
“This is a mission-driven school,” says Sister Ellen Convey, the principal of the Gesu School and one of two Immaculate Heart of Mary nuns at the school.
Many Gesu School trustees serve on the boards of nonprofit organizations or universities. DiIulio, for example, sits on the board of Big Brothers Big Sisters of America. Solomon, the chairman of an Israeli orphanage, informally adopted a Gesu School student, Daryl Shore, who graduated from Emory University.
When asked why he volunteers his time and money to the Gesu School, Solomon takes a deep breath.
If, over a weekend, you gathered the best experts in the country on how to combat poverty and improve education in the inner city, at the end of that retreat, he says, “you’d have invented the Gesu School.”
Vol. 24, Issue 24, Pages 35-37Published in Print: February 23, 2005, as A Spiritual Investment