Yeshiva Day School Financing: A Case Study

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by Micah Segelman

Amid the recent avalanche of attention that the issues of tuition and the financing of chinuch have received, I wanted to share some experiences from my children’s small yeshiva day school in the “out of town” community of Rochester, NY. While Derech HaTorah of Rochester (DHR) is very far from “solving” the problem of financing chinuch, lessons can be learned from the many good ideas and successes of numerous mosdos and it’s in that spirit that I present this case study. My point here isn’t to directly address the issue of tuition reductions for children of mechanchim. Rather my intent is to examine solutions to the overall issue granting that raising tuition for the full tuition payers is off the table.

First, some data. DHR started 9 years ago with just over 30 students and has approximately tripled in size since then. Boys and girls are separated in the older grades and to accommodate this, older grades are combined for select subjects. Despite the inefficiency inherent in the small class size necessitated by the size of the school, DHR strikingly spends an average of only about $7000 per student. The denominator of this ratio does not include those students whose tuition is included as a fringe benefit in their parent’s (who work for the school) compensation package. Full tuition payers (who are in the minority) pay slightly above this $7000 per child and thus partially subsidize scholarships. Nonetheless, overall tuition revenue is low due to numerous scholarships (although there is a minimum that everyone pays). Thus, despite the low costs, extensive fundraising is still needed to compensate for the low tuition revenue. The school has three successful annual fundraisers: an auction, a raffle, and a dinner – and even after these fundraisers a hole remains.

I’d like to highlight lessons that can be learned from how the school is able to keep costs low while maintaining a strong focus on the academic / social / emotional / spiritual development of each student.

1.Strong leadership and an effective organizational structure are essential. Mrs. Lea Goldstein, the principal, works extremely hard and is seriously underpaid. In many ways she IS the school (though she officially reports to the Rosh Yeshiva who is also her father). While getting talented people to work hard for a low salary sounds like a pipe dream, it is possible to structure an institution in ways which attract and promote strong leadership even in the absence of large compensation packages. In DHR, the principal has both the authority to make decisions and the financial responsibility for the school. Modeled on the organizational structure of the many of the affiliates of Yeshiva Chofetz Chaim of Queens, volunteers are involved and valued yet the professional / Rabbinical leadership has autonomy. The goal of this model is that through shared authority and responsibility, all stakeholders feel invested in and empowered to work for the long term success of the institution. Another advantage of the model is that when the professionals / Rabbis are responsible for the financial consequences of their decisions, money is spent wisely and infighting is avoided. Of course, many other models can be successful – but strong leadership and an effective organizational structure are crucial.

2. There is an overriding sense that there is a need to be highly cost conscious. There is a broad consensus among the principal, teachers, and parents that although excellence is expected from the school, money is only available for essentials. When the existence of the school depends on being financially prudent, ways are found to do so. Costs for supplies and technology are minimized. The library consists of donated books and is located in the hallway. Nonetheless, academic standards are high because no compromises are made on core fundamentals. What matters in the end is what happens in the classroom – everything else is peripheral.

3. DHR has excellent teachers despite paying low salaries. I believe this is possible for a combination of reasons (aside from the fringe benefit of tuition reductions, the low cost of living outside of a major population center, and the idealistic reasons that people in general become mechanchim). Every effort is made so that the school is a great place to work – the school is well run and provides a supportive and positive culture that educators want to be a part of. Teachers are respected, trusted, and empowered to be leaders in the school. They very much feel and act as “part of the team” to the extent that even non – Jewish secular studies teachers give of their own time and money to help the school. Also, given the tough economy, even very good Rebbeim / Moros / teachers need jobs. Sometimes this includes talented young teachers just starting out or seasoned veterans who want to retire from a more intense public school teaching schedule to continue their careers in a small, close knit private school. Even those young teachers who eventually move on to better paying jobs are happy and dedicated during their years working in DHR.

4. The school creates a culture where volunteering is encouraged and appreciated – that “we’re all in this together.” Expenses are able to be kept low because much of the work is done by volunteers. Two parents help with computer / technology issues and one of the grandparents takes school pictures. A retired educator donates a tremendous amount of time and energy to special education needs in the school. A volunteer buys milk while another parent helps with mailings. No one feels that it’s below their dignity to volunteer for the school and parents as well as people in the broader community feel a sense of responsibility to get involved. Part of what helps create this culture is the weekly newsletter which highlights those who volunteer. But more important is that people learn by example and when some are involved it encourages others to join in.

5. One other factor that encourages parents to volunteer is something that as dinner chair I helped to initiate. Any family receiving any amount of scholarship (the majority of the school) needs to raise $1000 for the dinner. However, parents have the option of volunteering for either the dinner or auction to cover $500 of this $1000. As a result, much of the work for the journal campaign, shopping for and set – up of the dinner, solicitations of auction items, and set – up of the auction is done by parents. The caterer for the dinner charges a reduced fee because he’s not responsible for the shopping and set – up. Thus the overhead for the major fundraisers is a fraction of what it otherwise would be. Many schools have variations on this sort of mandatory volunteering.

To sum up, there is no one right answer of how to keep costs low while striving for excellence in education. But strong leadership, a carefully crafted school culture, and a commitment to financial prudence can go a long way to keeping a high quality school open without exorbitant tuition cost.

Rabbi Micah Segelman learned in Yeshiva Chofetz Chaim in both Rochester and Queens and is currently pursuing a doctorate at the University of Rochester. In addition to other volunteer work for the school, he chairs DHR’s annual dinner.

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23 Responses

  1. Micah Segelman says:

    Charles: That’s a great question. I think the culture is the result of a few things: strong, accountable, and moderately transparent leadership; the small size of the school / community; a fairly homogenous group of people – many of whom who have known each other for years and learned in yeshiva together. How to build trust between parents and schools is a really important topic and deserves more thought than what I’ve written here – but I hope this helps.

    Not Okay: Registration is $250 and counts against tuition if paid on time – and as I’ve said full tuition is about $8500 for a family with a few kids in the school. I made no claim that things are all “working so well” – I explicitly said there are still deficits. I have done my best to accurately portray the strengths of the school – I’m not saying belt tightening will solve all problems – but it’s certainly worth exploring carefully.

  2. Not Okay says:

    I must differ with the applause lauded at this summary. I do not believe the whole picture was painted accurately here regarding the financial crunch and what is left unpaid for at this school. How much did you increase your registration fees to keep tuition down? It’s not helpful to paint a glowing picture and make others think that it’s all working so well, if folks would just tighten their belts a little more. Additionally, starting off the topic with: we can do this by underpaying our staff is not a formula for success, in fact in many communities, it is a formula for disaster.

  3. Charles says:

    Micah,

    Yishar Koach on your school’s success! It seems like leadership, both lay and professional, have a strong sense of what works for your school’s community, and how best to use the available resources to sustain the school. I also enjoyed the case study format, which presented your points in a very useful way. The only additional information I think would be helpful would be to learn how the school created its “all for one, one for all” culture. As you can see from the comments, many communities deal with a lack of trust between parents and schools. How did your school come by its culture? Is it typical of Rochester, because of its size? Or is there some way that DHR was able to create this culture in a more deliberate way?

    Charles Cohen
    Manager, Jewish Day School Affordability Knowledge Center
    A collaborative project of the OU and PEJE (Partnership for Excellence in Jewish Education)

  4. mycroft says:

    “If yeshivos are “money makers” why are so many of them in the red?”

    Assuming they are in the red is it because of salaries and benefits paid to controlling family members. I love Yeshivot that file 990s-unfortunately few do-BTW-some chareidi ones do-transparency is what is required to understand.

    “Although rabbeim are still underpaid (despite what you might read on blogs),”

    What do you consider underpaid? What alternatives exist for Rabbeim-see current Mishpacha column by Ron Coleman for those who are certain that law pays so well. I am aware that over a decade ago a prelaw adviser was advising students that they were likely to do better financially in Chinuch than in law.Reason for misconception is that very top financially well off lawyers are much better off economically than the top mechanchim.

    “The frum world has gone from an average of 4-5 children to about 7-8.”

    Assuming the MO world is “frum”-that is far from true for those attending MO schools.

    “. How come 20 years ago we did not have this problem. My grandparents were tailors – TAILORS!!- and yet they managed to send all their children to yeshivas, camp, seminaries, buy a home (in Boro Park) and also managed to put away for retirement!! Granted, inflation is a factor, but just as costs went up so have incomes.”

    This problem is far from new-20 years ago we did not have blogs-there were many who sent their children to public schools because they could not afford tuition. Sadly Talmud Torahs stopped being an acceptable option for people to remain within Yahadus-thus pushing out those who are financially challenged or academically challenged from Yahdus.

    “My kids can learn Gemara, know Hebrew, have sound hashkafos, and terrific midos. I’m a little tired of people dumping on yeshivos and rabbeim, and showing little or no hakaras hatov”
    Be thankful but sadly your experience is far from universal.

    Hakaras Hatov is not the issue-the issue is what works. Thus, the apparent correlation of day schools to increase of Yiddishkeit may be a correlation rather than causation-Jewish immigration to the US after mid 1930s was generally of a different type than earlier. Prior to the 1930s there were many Gdolim who fought against moving to America-thus frum Jews had a less chance of moving. With the rise of Hitler Jews of all types tried to leave.

  5. L. Oberstein says:

    These days anyone who thinks that he has a “new derech in chinuch” feels compelled to open up a yeshiva thereby destroying economies of scale; (b) There are many more organization today that consume funds that might have otherwise gone to yeshivas. I don’t debate whether the plethora or organizations are worthy, certainly Hatzoloah, Tomche Shabbos, etc. are critical to our community; rather I’m merely extrapolating as to what changed;
    Shea points out several important issues. Just based on what I see in Baltimore, there are new schools opening all the time. I just saw an advertisement for a “Zilberman method” school to open with 3 grades if there is sufficient interest. The people are obviously unhappy that a local school has phased out this method after trying it for several years. Do they have any idea of what a real school actually costs? I doubt it.They know that in the first few years with rented rooms and few paid professionals, costs are much less. Another new school that started here last year has now hired a full time principal and if it grows it won’t fit its rented space. In a few years, it may not be viable, as happened to the school it replaced that went broke. Private school education is considered a luxurey except in our world but we also want it to be fine tuned to what we want, one size no longer fits all.
    The second point is true, there are numerous organizations competing for the charity dollar,moe than before. Yet, the real reason we have new schools is that so many of our children fall through the cracks and leave school with few skills, low self esteem and prey to going off the derech. If my first paragraph seems to contradict my second one, that ,in a nutsell is the problem. We can’t afford our system but we can’t afford to lose our children. Hashem Yerachem.

  6. CJ Srullowitz says:

    Shea,

    I’m not following your logic. If yeshivos are “money makers” why are so many of them in the red? If they’re set up as fifedoms, wouldn’t the tuition be higher, not lower, than the “community” schools, in order to enrich the lord of the manor?

    Here’s what’s changed: We kvetch more. We have more crises because we have an entitlement mentality. The Chassidim, , who see themselves as part of a larger whole, more so (unfortunately) than other parts of the frummer velt, don’t share that mentality. My guess is that the Chassidishe yeshivos get most of their money from gevirim.

    Second, in the good ol’ days rabbeim worked for pauper’s wages. Although rabbeim are still underpaid (despite what you might read on blogs), my children’s rabbeim make far more (adjusted for inflation) than mine ever did. Same is true of principals.

    A third issue: families are larger. The frum world has gone from an average of 4-5 children to about 7-8. More mouths to feed, bigger house to buy (Do you know ANYONE who rents a house, let alone an apartment!), more tuitions to pay and over a longer period of time.

    There’s so much more to say about this, but you’ll have to wait for my book to come out.

  7. Micah Segelman says:

    “Many parents are not happy to volunteer, work hard, put in extra effort if they have ‘no say” in the school, in other words where the autonomy is in the hands of professional/Rabbinical leadership.”

    Very true – which is why I urged “shared authority and responsibility.” There are a lot of ways of doing this. It might mean, for example, giving a parent / group of parents true ownership over a specific project. People can feel empowered when they have true authority in a specific area even if they don’t have ownership of the entire institution. Or, going a bit further, the professional / Rabbinic leadership can literally share ownership with a board / lay leadership in the sense that each has defined spheres of autonomy and specific responsibilities. I’m familiar with specific institutions that are run this way.

  8. saulking says:

    “volunteers are involved and valued yet the professional / Rabbinical leadership has autonomy. The goal of this model is that through shared authority and responsibility, all stakeholders feel invested in and empowered to work for the long term success of the institution”.

    Many parents are not happy to volunteer, work hard, put in extra effort if they have ‘no say” in the school, in other words where the autonomy is in the hands of professional/Rabbinical leadership.

    Also, in this community of Rochester, Mrs. Goldstein who is a professional & competent principal (well liked, admired & dedicated) seems to be underpaid compared to other collegeaues. Yet remember she is the daughter of the Rosh Yeshiva who are both totally dedicated to the physical, financial, and spiritual growth of the school and the community that houses it.Quite sure, she does not have a board, president on her back and a contract to negociate on a yearly basis. When a top administrator sees their position as a 3yr contract upon satifaction of a board, dean, president & influential parents,,,,,,there is alot more friction and tension involved. Hatzolach Rabba to all mosdos and chinuch personel.

  9. Shea says:

    Hi there,

    I too am a parent of children in the yeshiva system, and thus perhaps can also lend my perspective.

    1. I don’t understand how come tuition in the chassidishe yeshivos are a fraction of of what ordinary yeshivas cost. How is it possible that chassidishe mosdos charge 3/4,000 a year while I am charged 8/9,000. Do they pay their rebbeim that much less? Doubtful. Their rabbeim work longer hours than our rabbeim and have just as many expenses. Do they not pay English teachers? They do! As a matter of fact chassidish yeshivos pay MORE for English teachers than regular schools because due to the children’s unruliness of having had a long day – few English teachers want to teach there.
    So what is it? Does the parent mossad subsidize so significantly as to make up the tuition difference? I suspect the answer is that these chassidish yeshivos are run as they were in the foreyear – as non-profits- and not as mini conglomerates and fiefdoms made to enrich the yeshiva’s owner. This is not the forum for loshon hora (and there is no forum for loshon hora), but many us know that some of our yeshivas are really…

    2. How come 20 years ago we did not have this problem. My grandparents were tailors – TAILORS!!- and yet they managed to send all their children to yeshivas, camp, seminaries, buy a home (in Boro Park) and also managed to put away for retirement!! Granted, inflation is a factor, but just as costs went up so have incomes. There is no yeshiva parent that I know who is a tailor. (Moreover, a tailor’s chile probably wouldn’t be accepted into a yeshiva these days. What changed?

    3. Perhaps what changed is: (a) The scale of yeshivas. In the foregone years there were fewer yehsivas with bigger enrollments, i.e., Bais Yaakov Boro Park, etc. These days anyone who thinks that he has a “new derech in chinuch” feels compelled to open up a yeshiva thereby destroying economies of scale; (b) There are many more organization today that consume funds that might have otherwise gone to yeshivas. I don’t debate whether the plethora or organizations are worthy, certainly Hatzoloah, Tomche Shabbos, etc. are critical to our community; rather I’m merely extrapolating as to what changed; (c) Yeshivas are not what they used to be. In the olden days yeshivas were glad to have any child in order to ensure that Post-Holocaust Jewry continuity thrived. Today, however, many yeshivas, camps, & seminaries are simple put – money makers.

  10. Eliyahu says:

    @ mr cohen: your premise, while touching on some valid unfortunate realities, is a bit more complicated if you start differentiating between “wings”.
    1. graduates from the right wing yeshivish world (from chofetz chaim through riverdale or any of the lakewood mesivtas)

    least likely to speak hebrew fluently

    most likely to be able to prepare a gemara on his own (or is well on his way)

    has a solid chance of enjoying gemara (obviously those with better skills are more likely to enjoy it)

    probably will not know tanach beyond a superficial knowledge of chumash from shnayim mikrah and friday morning chumash shiur

    may or may not enjoy davening (how many adults enjoy davening? more importantly, why should one enjoy davening?

    knowlege of basic jewish philosophy varies by kid and yeshiva. (i went to a yeshiva where kuzari, derech hashem, and alei shur were discussed and encouraged even if not taught)

    probably will stand heads and shoulders above his counterparts in the rest of society when it comes to kindness and chessed

    2.Center, Center/right wing high schools and yeshivas (TABC through South Shore)

    has a solid chance of speaking hebrew obvuiously depends on the school.

    probably will not be able to prepare a gemara on his own (although there are that do, somehow kby gush shaalvim etc. are full year after year)

    probably will not enjoy learning gemara

    probably will not have a real knowledge of tanach

    may or may not enjoy davening (again, refer above)

    basic jewish philosophy is taught with emphasis. depends on the student, but i would say there is a very good chance of him having some understanding in this area

    and once again probably will stand heads and shoulders above his counterparts in society at large when it comes to kindness and chessed

    3. Left Center/Left (North Shore through Hanc)

    the least likely to be able to prepare a gemara on his own

    the most likely to be fluent in hebrew

    probably does not enjoy learning gemara (simple lack of focus and skill is a big contributer)

    may have some knowledge of tanach

    less likely to place davening in the realm of primary importance

    may or may not know basic jewish philosophy. definitly is taught, would depend on the student.

    and once again probably will stand heads and shoulders above his counterparts in society at large when it comes to kindness and chessed

    as you can see, the one thing i took issue with strongly is your last example. I can point out case after case of examples from every sub-sect of orthodoxy which illistrates our exemplification of the proverbial “Baishanim, Rachmanim, and Gomlei Chassadim”

    p.s. i apologize for the catagories. Im usually the last one to define fine jews so crassly. I thought by pointing out specific qualities of each it may be temperarily justified.

  11. Orthonomics says:

    CJ Srullowitz, My own study of the issue shows that tuition subsidization can vary greatly.

    And I echo your comment about a larger problem looming when the scholarship rate is where at even where the cost per student is extremely low. I have to wonder what would happen if lower cost schools simply instituted a firm tuition and let parents sort it out among themselves so to speak, as they do for institutions without reductions, like preschools that are normally full fare. There could still be tzedakah funds administered by outside organizations to help those who need the most help, but the expectation would be different.

    One thing I’m certain of is that the scholarship process and the entire cat and mouse game regarding payment agreements that often go well into the school year come with a hefty, but hidden administrative price tag. I’m fairly certain that the Christian schools with 6K-8K tuitions and a single secretary don’t have parents, administrators, and committees engaging in multi-month long negotiations that sap everyone of energy.

  12. CJ Srullowitz says:

    With all due respect to Rabbi Dov Lipman (a man I do not know), he should speak for himself and not generalize. My kids can learn Gemara, know Hebrew, have sound hashkafos, and terrific midos. I’m a little tired of people dumping on yeshivos and rabbeim, and showing little or no hakaras hatov.

    If Rabbi Lipman thinks he has the answer to all the woes of the yeshiva “system,” let him build his own school. I can all but guarantee he’ll be the one getting dumped on in ten years.

  13. CJ Srullowitz says:

    ” My point is that if other schools where the parents could afford $7000 per child also managed to keep costs at this level (or closer to this level) then there wouldn’t be such a big problem.”

    And my point is that if everyone is always “short” on tuition dollars no matter whether it’s $7,000 or $15,000, then maybe there’s a larger problem looming here that transcends dollars and sense. Similar to people who are always racing until the last minute before Shabbos, whether it starts at 4:30 or at 8:30…

    “It happens that I looked at a school 990 recently and the average expenditure per student was right around the 7K mark, yet the tuition somewhere around 12K.” – Orthonomics

    I don’t know what happens elsewhere, but in Bergen County, tuition is only slightly (a few hundred dollars) over what is spent per student.

  14. Micah Segelman says:

    Orthonomics Comment 1: You’re right. A family with a few kids that pays full tuition will pay about $8500 per child. I should’ve said somewhat or modestly above $7000 rather than slightly above $7000.

    Orthonomics Comment 2: I think that $7000 per child is on the very low end and the other school you mentioned may also be a very lost cost school. No way for us to know for sure unless we gather the data. Also, one of my main points is that DHR spends $7000 per child with only about 10 kids per grade. This is highly unusual. With 20 or more kids per grade (which is the norm in larger cities) the costs would be far less.

  15. Orthonomics says:

    “Absolutely. Out of necessity DHR has had to find ways to keep costs low. My point is that if other schools where the parents could afford $7000 per child also managed to keep costs at this level (or closer to this level) then there wouldn’t be such a big problem.”

    Outside of Lakewood where it is rumored everyone pays full tuition (of course, each year we are treated to threats of numerous schools closing due to lack of funds), it seems to me that there is more at play here than cost per student. It happens that I looked at a school 990 recently and the average expenditure per student was right around the 7K mark, yet the tuition somewhere around 12K. The more I speak to people, the more I sense that tuition is viewed as a starting point for negotiations and that could be a lot of the issue right there.

    I have no solutions, certainly not any short term solutions. I’m just pointing out that keeping costs low won’t necessarily translate into solving the problem because the problem seems to run quite deep.

  16. Orthonomics says:

    The tuition is actually far more than $7000. From the DHS website:

    2011-2012 Tuition for Grades K – 8: $9,690

    Families enrolling more than one child receive a 20% discount on each subsequent child’s tuition. Please note: Parents’ inability to pay full tuition is not a factor in the admissions process. Scholarships will be awarded based on financial need. After the registration fee (which will be applied to tuition) is paid, we will prepare a tuition/scholarship contract for your family.

  17. Ken Scott says:

    Mr. Cohen:

    I think that is because parents in Yeshiva Day School dont really care or know what goes on in their high schools. Most parents just want their kids to grow up Orthodox, or marry Jewish or live how they lived and dont notice who the teachers are.

    That model is hopefully coming to an end, and more parents, on both ends of the spectrum are getting more involved in what type of education they want, and not relying on the Israel schools to do their bidding.

  18. Micah Segelman says:

    “What I find interesting is that even a tuition of $7,000 is unaffordable to the MAJORITY of the community. I believe that figure is one of the lowest in the land. I know that in Bergen County, NJ, tuition is about twice that.”

    Absolutely. Out of necessity DHR has had to find ways to keep costs low. My point is that if other schools where the parents could afford $7000 per child also managed to keep costs at this level (or closer to this level) then there wouldn’t be such a big problem.

  19. CJ Srullowitz says:

    What I find interesting is that even a tuition of $7,000 is unaffordable to the MAJORITY of the community. I believe that figure is one of the lowest in the land. I know that in Bergen County, NJ, tuition is about twice that.

  20. Rucha Baumann says:

    Good ideas, nurtured in a good out of town school where people care, and people know they make a difference, and they DO. Like YOU! Yasher Koach!

  21. Mr. Cohen says:

    How much value do Jewish parents get in exchange for their yeshivah tuition payments?

    Check this out:

    “Let’s take a step back and see where the average yeshiva high school boy
    stands upon graduation from high school.

    Is he fluent in Hebrew? No.

    Can he prepare a Gemara on his own? No.

    Does he enjoy studying Gemara? No.

    Does he know Tanach? No.

    Does he enjoy davening? No.

    Does he understand basic Jewish philosophy about G_d,

    the purpose of creation, and why we do the things we do? No.

    Does he stand head and shoulders above the rest of society
    in terms of his dedication to acts of loving-kindness
    and basic human decency? No.”

    SOURCE: Overhauling Orthodox Education to Make Better Jews
    by Rabbi Dov Lipman, The Jewish Press, 2012 August 1, page 6.

  22. Dan says:

    Honestly, I was rolling my eyes until I got to idea #5. That one makes a ton of sense.

  23. Eli says:

    “Any family receiving any amount of scholarship (the majority of the school) needs to raise $1000 for the dinner. However, parents have the option of volunteering for either the dinner or auction to cover $500 of this $1000.”

    It also has the large side benefit of being a discomfort for those who would otherwise feel that they could take scholarships. Combined with lower costs than “in town” and a minimum tuition (THE major sticking point), and 7K sounds reasonable.

    If “in town” schools would implement minimum tuitions (on a per child basis), that itself would alleviate most of the financial problems that cause the “crisis”.

    Hatzlacha.