Focus on Endowment

By Sharon Gregg

In 2005, Peter Devine, the outgoing chair of the BSS Foundation and a current parent, established the Devine Family Bursary. When fully funded, the bursary will provide tuition assistance to three deserving girls and enable them to share in the BSS experience. At 500,000, it is one of the largest endowment pledges in BSS history. Peter sat down with The Link editor Sharon Gregg to talk about the endowment, BSS and why giving back is so important to him.

SG: What motivated you to pledge such a generous gift to the BSS endowment?
PD: As a trustee for six years and laterally, as chair of the foundation, I’d been preaching the benefits of growing the BSS endowment at every opportunity to almost anyone who would listen. When I stepped down in 2005, I felt that it was only fair to back up my lecturing with a significant donation. Bluntly, I felt that I should put my money where my mouth was.”

I believe it’s important for leaders to lead by example. I wanted to create a meaningful precedent that would encourage others to consider making leadership gifts and get the endowment campaign off to a great start. Second, on a personal note, I watched my daughters, Samantha Grade 12) and Alexandra (Grade 9) flourish at BSS since they entered the junior school in the late 1990s. Because my girls have benefited so much from their BSS experience, I felt I wanted to give something back. The way that worked best for me was to establish a bursary that would support highly talented Grade 9 applicants who couldn’t otherwise afford the BSS experience — giving them the same opportunity as my daughters to get the best secondary education available in Canada. It may be wishful thinking, but I sincerely hope that the financial support derived from this bursary will make a real difference in somebody’s life.

SG: And how would that work in practice?
PD: Some people believe erroneously that the recipient of endowment gifts is the school itself. In fact, I was asked at one point why would I bother making a large gift to a “wealthy independent school.” Apart from the fact that BSS struggles every year just to meet its operating expenses and isn’t the least “wealthy,” that question was ill-conceived in another way. In reality, donations go directly to The BSS Foundation (see endnote). Once a year, the foundation disburses its investment returns to the school in support of the stated objectives of the various bursaries and scholarships that have been established by donors.

When The Devine Family Bursary is fully funded in 2007–2008, it will generate approximately $24,000 per year in investment returns. The school will allocate these funds in the form of reduced tuition fees to three (two at this point), successful Grade 9 applicants during each of their four years at BSS (an $8,000 reduction each per year; $32,000 each in total). After the first three bursary recipients graduate from BSS, the investment returns on the endowed funds will be available to three new Grade 9 applicants until they graduate, and then three more applicants until they graduate, and so on and so on. That’s another reason why donations to BSS’ endowment make the “perfect gift.” Unlike bricks-and-mortar donations, endowed funds won’t ever depreciate or deteriorate. They just keep on giving and giving; in theory, forever.

SG: Clearly you believe in the BSS mission based on your own experience with the school. What do you think it takes to make a great independent school?
PD: It may sound simple on the surface, but I think there are three principal ingredients: state-of-the-art academic and recreational facilities, exceptional teachers, and the most talented students.

SG: So based on these three criteria, how does BSS distinguish itself relative to the other independent girls’ schools?
PD: Since most of the Toronto schools, including BSS, have undergone major capital expansions in the past few years, it’s difficult to differentiate based on facilities. But, I think with a robust endowment there is room to really make a difference in terms of the students we can attract, and in continuing to develop our outstanding faculty, not only in the caliber of the teachers we have, but in the programs they can develop for the classrooms and beyond. That, I think, is where things could get really exciting.

The independent girls’ school with the best reputation among its peers will be the one with the largest, most active endowment. This will come to mean a school that, through endowed chairs, has attracted the best faculty and established the most innovative programs, maintained state-of-the art facilities, and through financial support in the form of scholarships and bursaries, opened up access to the most talented students who will have enhanced the BSS environment for everyone.

SG: With tuition fees on the rise everywhere how do you explain to someone why they should reach into their pockets for even more money than they already pay every year?
PD: Tuition fees really do nothing special for BSS—they simply pay this year’s bills and allow us to keep the doors open. I’d say tuition fees are the so-called ‘table stakes.’ An endowment donation is what’s going to ensure the health, growth and continued excellence of the school over the long haul. It’s a way for parents and Old Girls to say “thanks” to BSS for the fabulous experience we have had, while helping talented and deserving young women from all walks of life get the outstanding education we offer here. When the most talented and well-rounded girls attend BSS it raises the level of excellence and enriches the community experience for everyone.

Another important function of a healthy endowment is that it eases the reliance the school has on tuition fees. In a deep recession, the waiting list at BSS could dry up faster than the waiting list at an expensive Toronto golf club, and the school’s financial viability could be threatened.

SG: If we had to find a model to emulate out there where would we look?
PD: Just look at the American universities that are perceived to be the very best schools—places like Harvard and Yale. The best schools have the largest endowments. It’s that simple. That’s what sets them apart. Large endowments allow Harvard and Yale to attract the best possible educators and the best students. Despite the $50,000 annual tuition cost to attend Harvard or Yale, their students are not perceived as “rich” – they they are perceived as “smart.” That’s what endowment can do for a school. Give it a reputation as the pre-eminent school where the most intelligent teachers want to work and the brightest students want to attend. At some point in the future, with substantial endowment funds, there is no question in my mind that by emulating the Harvard model, BSS could be the pre-eminent independent girls’ school in Canada.

SG: Okay, but Harvard’s endowment is in the neighbourhood of $25 billion. What kind of money are we looking at for BSS?
PD: There are a number of criteria we may want to consider in terms of determining appropriate size. One of the more common benchmarks used in the US is that the endowment should approximate about twice the annual revenue base of tuition fees which in BSS’ case would mean that an appropriate endowment over the long term might be approximately
$50 million dollars. This would throw off about $2.5 million in investment earnings for bursaries, scholarships and chairs.

It will be difficult to quickly grow the endowment to $50million immediately, but one way to get a good head start would be for the foundation and the board to embark on an endowment fundraising campaign immediately in the order of $10-$12 million dollars. Half of this amount might come from leadership gifts made by trustees and members of the Board of Governors. BSS’ current endowment is approximately $12 million. The first step towards growing this to $50 million is to double the current amount. If we could double the current amount and get to about $25 million then we are well on our way towards $50 million.

SG: Well Peter, BSS is fortunate to have someone like you helping to lead this initiative with your generous gift. I suppose you’re hoping others will follow suit.
PD: It’s something that I’m very committed to and my hope is to encourage others to get on board. Just think how much better off the world will be with more BSS graduates coming from every part of society with only one thing in common—exceptional talent as students and as individuals. I’d like to help make that happen.

 


Under current tax law, secondary school bursaries are taxable income in the recipient’s hands. Peter established the Devine Family Bursary’s $8,000 limit per applicant to tie into their personal income tax exemptions and to spread the bursaries among three, rather than one, deserving students.
The BSS Foundation is an independent, legal entity established as a charitable institution which raises funds for endowment, invests and manages the money raised and distributes it in accordance with standards set by the school.

 


Posted January 24, 2008 at 04:47pm






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