Principia gives a lot of financial support to students that come to the College or Upper School, and every student would suffer financially without the helping hand the institution lends. But where does this money come from? Where does it go? And, as some students believe, will Principia go bankrupt soon because of the amount of financial aid it gives?
Principia does have a large endowment, which is used for a variety of purposes. According to Principia’s 2013-2014 fiscal report, this fund currently sits at $645 million. In 2012 the endowment was listed at $514 million, and in 2013 at $589 million. In the past few years, Principia has seen an increase in the endowment.
This was not always the case. The St. Louis Dispatch ran a report about the recovery of school endowments after the economic recession of the 2000s, and listed Principia as one of the rebuilding schools. The article stated, “Principia ended the 2010 fiscal year with an endowment of $607 million, up 14.7 percent from the previous year. Three years ago, the endowment peaked at $780 million.”
According to Principia’s chief investment officer, Howard Berner Jr., the Principia corporation’s goal is to use a five percent spend rate. However, as of 2010, Principia was forced to step up to a seven percent rate to continue functioning as normal. Due to the mutable nature of investments, Principia will continue to make progress on rebuilding the endowment as long as its investments grow.
So, in addition to the endowment, what is the source of the rest of the money that Principia relies on? According to the annual fiscal report, 25 percent of alumni contribute financially to the school. The sum of their donations is a little over $5 million. Some additional contributions come from students and their benefactors, totaling around $7 million in tuition and room and board fees. The Upper School student tuition contributes $2.3 million. According to the fiscal report, the remaining $12.9 million comes from unspecified “other income” and “unrestricted funds/gifts.”
As students shop for colleges, the biggest factor in choosing to come to Principia is the quality of teachers. The budget reflects the importance of faculty and educational experiences, with half of the spending for the year going towards “direct educational costs.” Some of the biggest costs are faculty salaries. The average nine-month faculty salary for the 2015-2016 school year (including all positions from instructor to full professor) is $66,707.
The next biggest share of the money, after educational costs, goes towards maintaining campus facilities. According to the annual fiscal report, this amounts to $20.5 million of the $63.6 million yearly budget. For example, cutting the grass, blowing leaves off walkways, maintaining sports facilities, supplying sports teams, and routine building and road maintenance are all paid for by the facilities allotment.
To help mitigate deficits, facilities are rented out to local (and sometimes non-local) groups to offset some of the maintenance costs. Returning students may remember Division I track teams practicing and racing in Crafton Athletic Center. On weekends, Hayfield House hosts a plethora of club volleyball teams.
“The Dynamic Advertising Effect of Collegiate Athletics” by Doug J. Chung, assistant professor of business administration at Harvard Business School, describes the correlation between successful collegiate sports programs and high numbers of applicants to those colleges. He wrote, “The primary form of mass media advertising by academic institutions in the United States is… their athletic programs.” The Principia administration seems to be well aware of this. The rugby field, baseball field, soccer fields and tennis courts have all had facelifts in recent years.Those that have not been renovated have been carefully maintained.
Principia invests heavily in facilities both for the benefit of current students and those who come to the college as rivals or visitors. A common statement made by visitors after the end of a sporting event is usually something akin to “This place is like Hogwarts,” which is never a bad thing.
Principia is doing well financially and seems ready to continue to do so. There are significant efforts focused on ensuring the school is worth attending for current and future students, as well as representing itself well to visitors no matter their reason for driving down Maybeck Place.