Read the full transcript of Episode 85 of the NAIS New View EDU podcast, which features George Suttles of the Commonfund Institute joining guest host and NAIS Vice President of Strategy Ann Snyder to share his insights on how financial planning can seamlessly blend the aspirational and the practical, securing the future legacies of schools through careful stewardship of resources.
Ann Snyder: Hello, everyone! I’m Ann Snyder, vice president for strategic initiatives at NAIS and subject matter expert in the area of advancement, and I’m happy to be guest hosting New View EDU today. We’re going to be talking with George Suttles, the executive director of the Commonfund Institute, an organization dedicated to the advancement of investment knowledge and the promotion of best practices in financial management. Throughout his career, George has supported the philanthropic activities of leading nonprofits with a focus on healthcare and related missions.
George and I first got to know each other years and years ago when I first got started at CASE, Council for Advancement and Support of Education, and his presentations over the years have been the most educational, the most interesting, and the most human of any financial management presentations or endowment spend conversations I have ever been a part of. And what I love about the Commonfund Institute is that it is as committed to the education of its constituents as it is to the investment practices of the funds that Commonfund itself manages. So please join me for a conversation with George Suttles.
George Suttles, welcome to the podcast. It is always so fun to talk with you. You and I have known each other for several years, got to know each other when I was at CASE Council for Advancement and Support of Education, and of course now that I am at NAIS. So welcome to the pod and thanks for having this really important conversation about endowment.
I am hoping that you can give us a little bit of, you know, tell us how institutions and schools in particular understand their own endowment. Can you orient us a little bit with a definition of endowment and how our independent schools often understand it?
George Suttles: Sure, thanks, Ann. And it's really a pleasure to be in conversation with you. I always enjoy our time together. So thanks for the invitation.
So I think in terms of providing a definition of endowment, it is a long-term pool of capital that is meant to support an institution. And so when we think about endowments, we're really thinking about either restricted or quasi-unrestricted pools that are meant to be invested for the long term to support an institution for many times into perpetuity. Although endowments have many, there are many types of endowment and many types of definitions, I think for our conversation, you know, we'll define endowment as that long-term perpetual pool to support an institution into perpetuity.
Ann Snyder: It can certainly get complicated with all the different funds and different ways to account for it. But given that it is so complicated, where do you see schools get it wrong? Or where do you see gaps in understanding most often around endowment?
George Suttles: Yeah, I mean, I think broadly we understand endowments to be desired, to be a positive lever for a school to, to pull in terms of advancing its mission. But there are a few things that I think we want to keep in mind when we're thinking about endowment.
One, an endowment isn't a piggy bank or a rainy day fund. It really is meant to be a long-term strategic lever. So even the way we understand and we communicate about endowments, it really is meant to be one of many levers for a school to pull. One.
Two, it isn't a cure-all. So even when we think about institutions with endowment, when you're navigating turbulent times like many institutions are now, we point to the endowment as the lever that we can pull to sort of make everything else go away, right? Like, well, if we tap the endowment, we can fill holes in declining enrollment and things of that nature. Well, it's like, well, no, the endowment is meant to be strategic and it plays a role if positioned correctly. And so what are the opportunities to continue to educate the industry, the field, the ecosystem more broadly to say, an endowment is a great thing to have, but it needs to be managed strategically amongst other things in the ecosystem and it isn't a cure-all.
So I do think, especially in my travels, I do think those are conversations that I'm continuing to have with institutions. Like we have an endowment, we'll just draw down from it. And it's like, well, that isn't actually a source of fiscal responsibility or health if you're just always running to the endowment to fill holes, as opposed to activate sort of strategic initiatives or to advance the mission of the institution and organization. Two, it isn't meant to be managed as a rainy day fund. And so we need to be looking at all of these other strategic financial and investment inputs like enrollment, fundraising, you know, leveraging and managing debt, et cetera. Like those, there are many other levers that we need to pull.
And so how are we sort of including the endowment in a robust and vibrant investment governance ecosystem? And then, you began to allude to this at the top of our conversation, is that many times the endowment isn't representative of a single corpus or a single pool. And so we have to educate internal and external stakeholders to say, for many institutions, the endowment is made up of many, many, many funds that have different restrictions and stipulations. And so that's very much connected to the cure-all, my cure-all comment, as well as my rainy day fund comment. It's like, well, no, like our endowment is made up of 50, you know, individual restricted, you know, restricted funds that have stipulations. And so we can't, it isn't just a pool of liquidity, unrestricted liquidity that we can access at any time.
We actually have to adhere to those restrictions and stipulations and really, really understand where our liquidity and flexibility is. So I think if I had to lift up sort of two or three things that not necessarily institutions are getting wrong, but narratives around the endowment that we still have to continuously grapple with, I might point to those.
Ann Snyder: It's a little like saying if you're in your 30s, 40s or 50s, oh, well, I'm saving for retirement. So I'll just pull funds out of my IRA or 401k or something like that, thinking it's like your savings account. And instead of thinking about what the future looks like, how those funds are managed, what all that looks like and the complication that arises from that. That's actually how I used to explain it to our faculty when I was at Stuart Hall every once in a while when they would say, well, we've got this big pot of money. Why can't we use it for something? And I would say, well, that's not really how endowment is supposed to be used.
George Suttles: Yeah, that's a really good analogy, actually. Yeah.
Ann Snyder: Tell me a little bit about the endowment landscape. What's happening in the markets, in institutional practice? Tell us what it looks like and what should, particularly heads of school who are listening, trustees who are listening, CFOs who are listening, what would you say to them about the landscape in which we find ourselves right now?
George Suttles: I will say this. I'll say that when we think about the endowment landscape, particularly for independent schools, and I think this is something that we grapple with too in the ecosystem, is that not every independent school has an endowment. There's actually a much smaller percentage of all of the independent schools out there that actually have an endowment. And so I just want to sort of lift that up as a, for context, to say like, I don't want to misrepresent, sort of, just how many independent schools actually have an endowment. And so it's always interesting to think about, like, well, who are we actually talking to? It's those schools, both day, hybrid, and boarding, that actually have an endowment and are managing a long-term pool as an endowment.
I'd also be remiss if I didn't, if we didn't have this conversation in the context of the times we're in, right? And so I think a lot of institutions and independent schools aren't shielded from this, are navigating uncertainty and turbulence, both persistent and emergent. And so when I say that, I mean, you know, independent schools have been trying to wrap their arms around persistent challenges that we've been having conversations about for years: Enrollment challenges, increased competition from charters, from public and other types of private schools, rising financial pressures and affordability concerns, changing parental priorities and value expectations, COVID and then a post-COVID adaptation, right, making strategic investments in technology and, you know, beginning to understand that parents and families have an evolved expectation of the academic and school experience coming out of COVID. So that's what I mean about persistent – we, there are a handful of challenges that we've all been sort of grappling with and trying to understand how to solve as an independent school community for, for years.
And then there's, you know, the last couple of years, we've really been trying to navigate a turbulent public policy environment. And that's emergent. I don't know if any of us could have really… could have really imagined what that, how that was going to impact the landscape. So when we think about the impact on markets, I think a lot of independent schools with endowments are thinking about…they're trying to manage the tension between staying the course, because they have long-term investment strategies with liquidity and access to cash in order to be able to adapt in real time to all of these challenges.
So without getting into deep, you know, sort of capital markets analysis, I will say in the context of how institutions are thinking about endowment management, that is a pervasive tension that we're seeing being highlighted over the last sort of year, year and a half. It's like, right, stay the course. We have an investment policy. That investment policy is speaking to long-term, you know, hitting long-term return targets. Understanding that this is more than likely our perpetual pool, so time is on our side. And then also saying, holy crap, we've got to make sure we can access cash in order to manage all of these needs and effectively meet mission today.
And so I think if I was going to highlight a strategic investment governance tension that I'm hearing a lot about it would be that, right? Especially from an endowment standpoint. And then you have all of these other challenges that I just listed. It's definitely a crazy time to be an independent school leader.
Ann Snyder: It absolutely is. Just having cash and resources on hand over and above your budget every year is a challenge for a ton of schools. And so that's such a good point to make. And I love that you brought up that not every school has an endowment, because I get this question all the time, especially from smaller or under-resourced institutions, just hearing that, well, the other schools, they all have huge endowments, or this type of school necessarily has millions and millions and millions in endowment.
Something like, I believe this is correct, this is NBOA data. I want to say 47% of schools in 2024 had an endowment that was under five million or zero. So I think it was 14% of schools had an endowment at $0. So effectively no endowment, obviously. And then another 43% had an endowment of under five million. And at a...say, let's call it 4% spend rate, that's not a ton of money that's getting injected into your budget if you are drawing on that endowment at all. And so it is encouraging to some schools to know that they're existing in the more day-to-day, and they are managing these questions of cash and reserves and how to meet their mission without really that extra lever at this point. So thanks for pointing that out.
I am curious, actually, a little bit, about spend rates and what your thoughts are there and how I've heard you speak so eloquently about this in the past. So I'm wondering if you could help our listeners as for those, for those who do have endowments out there, and as we're thinking about managing those resources over time, what are your recommendations for those who are saying, you know, should we take an extra half a percent to accomplish X, Y, or Z, or how should we be thinking about our future and how to really build these resources?
George Suttles: Yeah, no, that's a good question, Ann. And you sort of, you touched on it a bit. I mean, we partner with NBOA on the Commonfund Study of Independent Schools, and we collect and benchmark both annually and longitudinally on investment governance data. So we look at spending, spend rates, we look at asset allocation, short, intermediary, intermediate and long-term returns and all of that juicy investment governance information that independent school professionals are interested in. And I'll say a few things.
One, there definitely is a difference and a nuance between spend rate and spend policy. And I think the spend policy is where, even just strategic investment policy more broadly, is where a lot of schools can focus good work in order to stay focused on long-term goals. We see a lot of schools get in trouble when they don't have a clear investment policy or spend policy, and then they need to draw down from the endowment and they say, oh right, well there isn't a policy around endowment draw or spend rate, so we can kind of do whatever we want, and then we'll back into a policy.
Whereas if you memorialize a prudent spend and investment policy, that can kind of help you stay the course, especially when, you know, there's a, there may be a liquidity crunch and you go, we'll just go to the endowment and we'll take an extra draw from there. And it's like, well, no, as per the policy, you know, we have this spend policy and that informs our spend rate of 4.7%. And so if we do want to make an adjustment, you know, we have to go through the right governance and decision-making channels in order to examine and change that.
Ann Snyder: I was hoping you can help our listeners understand, what are the types of things that go into a spend policy? So if they're sitting there going, shoot, we don't have one of those yet, what are the types of considerations a school would make when formulating that policy?
George Suttles: Yeah, no, absolutely. And we sort of touched on this a bit. It would be sort of your investment, financial, and operational inputs more broadly. And so some of the things we see is, we'll see institutions develop a spend policy or sort of just arbitrarily pull a rate out of a hat and say, OK, we need to draw down X from the endowment at this spend rate. And it's like, well, where did you get this number? And they'll be like, our peers do this, so we should do it too.
Or they'll say, we kind of ballparked it. And so it’s like, well, you know, let's look at all of the other data that might inform the type of draw you would need from the endowment. Let's look at enrollment data, fundraising data, you know, let's look at your balance sheet. Let's look at any debt you're servicing. And that actually will give us a more holistic and comprehensive picture of how sort of hard we need the endowment to work.
And so if enrollment is healthy, and you've got a robust fundraising environment where, you know, that's also diverse, where you're also able to bring in major gifts, your annual fund’s pretty robust, and you're able to activate folks around specific initiatives and programs, then you may not need your endow– you might not need a heavy endowment draw. You may be able to even draw two, 3 % from the endowment just to sort of support general operations, but you don't actually need it to work that hard. So a four or 5 % draw doesn't really make a lot of sense. You want to keep that money in the endowment so that it can grow in the markets.
Conversely, you may say, no, we need a conservative draw. We're good. And then you might look at your enrollment data, your fundraising environment, et cetera, et cetera, and say, actually, we need the endowment to work a little bit harder because we're going to take a higher draw. So one of the things I always encourage people to, institutions to do, is to think about, and we touched on this a bit, is to look at the endowment and how hard you need the endowment to work in the context of the entire operating environment. So enrollment, fundraising, et cetera. And that will really help you with more precision to come up with a spend policy and a rate that's actually going to be sustainable for the long term.
Ann Snyder: So you alluded a little bit to this and we talked a little bit about the data, you know, of not that many schools actually have a robust endowment. So conversely or related to this, I get this question all the time. How do I start one?
Now in my work at NAIS as subject matter expert in advancement, I often get the question from fundraisers who are maybe looking at messaging or how to appeal to these leadership donors, or thinking about it in the context of what's the campaign around this specific lever and how do I convince people it's good for the school? That's a sort of a different question than the one I'm asking though right now. I'm curious from your perspective as we've been talking about, you know, instituting policies or thinking about the future or wanting to set a school up for success. If I were your advancement person and you were managing our endowment and I said, I've got a donor who wants to give us three million tomorrow just for endowment to take us from zero to three million in our first year. What advice would you give to that school about setting up their first endowment, how to think about managing it, how to think about the committees that would need to play a role in that process? Would love to hear your thoughts.
George Suttles: Yeah, no, absolutely. Thanks, Ann. It's a good question. And I think I alluded to this. I would start with policy first. A lot of folks might be inclined to say, we have to get an investment partner to start managing this and start growing it. I'd say, well, let's codify and memorialize a lot of the strategic thinking about how we want to, the purpose of this pool of capital.
So before we even start investing and we start communicating about how the endowment's doing and how we want major donors to contribute to the endowment, I think we want to start with prudent investment stewardship, and that always starts with policy. So let's put pen to paper, let's get some really smart folks together, and let's really start to think about how we want to codify strategic decision making, policies, procedures around the endowment, how we want the endowment to be managed. And sometimes investment partners will help with that. I know this isn't a Commonfund commercial, but Commonfund prides itself on being a strategic thought partner on the policy side before we even start thinking about portfolio construction and asset allocation, because we know the policy will inform the investment strategy. So we typically start there first.
So that would be my first piece of advice. Before we get to investing and before we start raising money for the endowment, let's put solid policies and procedures into place so that we can show that we're going to be prudent stewards of this pool of capital. The second thing I would say is, Don't make the mistake of siloing the endowment management work with the finance committee or the investment committee without including other school leadership, right? So you mentioned the advancement office, you know, the fundraising development team, they should have a strategic seat at the table, right? Because think about it, they're going to be one of, if not, they're going to be one of, if not the most important, lever or partner that you need to engage with to grow the endowment, right? Because we're going to invest this pool of capital for long-term growth and the markets are going to do what they do, but you're also going to need to equip the advancement team with information and narrative storytelling capability around what possibilities the endowment is going to create for the institution.
And so if you're not working very closely with your advancement team, with your head of school, and getting that input and that feedback, and then also educating them about what this journey toward a robust endowment is going to mean for the future of the institution, then it's going to be a lot more difficult to grow that endowment. So I see successful institutions that have created deep internal partnership with the advancement team and other departments and divisions and school leadership. Those endowments and the storytelling around the endowment are multi-dimensional and robust. When you've got it siloed, it's very, very difficult for the advancement team and other school leaders to tell a compelling story about the power of the endowment and growing the endowment to donors and other stakeholders to get them excited about participating.
Ann Snyder: You just gave me chills, because I feel like if I say anything in my career at independent schools and counseling schools and talking to them and going out there and speaking at conferences and all of that kind of stuff, I continue to advocate for a few different things that you touched on. One is certainly a distributed leadership model where we really trust the people in those key seats. So bringing them to the table and ensuring that they have a voice.
Number two is an amazing relationship and very deep, thoughtful relationship between revenue generators and revenue managers. And the third thing I would say that I loved, you're talking about equipping an advancement person to be able to, to be able to do their best work, and they cannot garner the trust of significant donors if they don't know what the policies are to be able to convince them that they are giving to a trustworthy campaign and cause.
A savvy donor will always want to know how the money is actually going to be used and handled, and increasingly so as more and more of our leadership donors are millennials and Gen Xers. They love that transparency. They want to know exactly how it's going to be used. They might even want to know the type of asset allocation and where those funds are invested if they are, you know, specifically interested in causes or in avoiding certain, you know, aspects of investment and all of that sort of thing. So enabling that advancement person and allowing that advancement person to be in that conversation from the ground up is an incredibly powerful idea. And I applaud it on behalf of all the advancement people listening out there.
The other thing that it allows them to do is that storytelling piece and to know exactly what that endowment is in service of for the institution. Because donors don't give to individuals, they do give to institutions, they do give to our schools. But those advancement people are that frontline representative and the head of school and probably a handful of trustees if they're willing to get out there and actually fundraise for these things. So love that idea of them having a seat at that table as well.
George Suttles: So we talked about strategic policy and making sure you have all of your ducks in a row from a strategic policy standpoint. And one of the things that I always advocate for from a policy standpoint, and you sort of, your remarks sort of incited this in me to share, is linking the gift acceptance policy to the investment policy.
I think this is important, because what'll happen is that your advancement team will get out there and they will garner endowment gifts, but the gifts will come with restrictions and stipulations that make it difficult from an endowment management standpoint to really grow the pool, as it pertains to the bold strategic vision of advancing the institution. So you want to link those policies together and you want to make sure they're in step and attuned to each other so that your advancement person could say, okay, well, you know, Mr. Rogers wants to make a $5 million gift to endowment, but there are so many restrictions and stipulations that, one, it makes it difficult for us to invest for growth; two, we actually can't deliver on the programmatic and strategic initiatives that are outlined in the acceptance policy as it pertains to how that's connected to our investment policy; three, we haven't given ourselves enough time horizon to grow the gift so that we can then honor the stipulations and the restrictions that Mr. Rogers has set out. I don't know why I keep saying Mr. Rogers, but I feel like it's not a bad, you know, it's not a bad name to use.
So it's all of these things where if the gift acceptance policy isn't in step with the investment policy and vice versa, then you can run into some problems. And so when we think about strategic policy, that interconnectedness is incredibly important. And I think it reinforces our point that that's why the Advancement Office needs to be speaking to the Investment Finance Office and or committee and vice versa. You need to have these conversations that are connected, that need to be codified and linked in policy so that you can effectively not just manage the endowment, but fundraise for it.
Ann Snyder: Absolutely. So my colleague Mark Mitchell at NAIS and I presented together last week at CASE NAIS, at the conference in Seattle. And our topic was the nexus of affordability and endowment and essentially how the endowment lever can play a role in the affordability of your school over time and how many students can actually access your education.
It was a great conversation, not only because Mark is wonderful to present with, but the folks in the room represented some kind of titans of fundraising history, if that makes any sense. They came, they, a lot of them represented robust schools. They've been in the business a long time. And so I said, I made the point that millennials, again, millennials and Gen Xers like specificity. I think there's also a way for them to get excited about endowment giving, because they also want to understand how a school can be sustainable. I think that there's a way to do that. And one person did bring up, you're not going to make any friends in the business office if you are accepting all of these specific, really targeted funds, particularly in smaller increments.
So if I'm Ann Snyder, a major donor, and I want to give a gift to the George Suttles, or I want to set up the George Suttles Memorial Fund, you know, I probably shouldn't do that for less than 25, 50, 100,000 dollars, minimally, depending on the size of your school and what your cultural philanthropy is and your donor base and all of those things. What we did talk about, though, and I thought this was such a good point, is that while our donors are increasingly craving specificity, what we can do is manufacture specificity that is specific to the school, not necessarily specific to the donor.
So while I might want to give a George Suttles gift or a gift in the name of George Suttles, what the school might do already is have a fund that exists for people like George Suttles. So if you were a history teacher, maybe it's the blah, blah, blah history fund or the history department fund, something along those lines. And then you can give in the name of, without necessarily restricting that gift even further down. So we threw out a lot of different ways to eat the elephant one bite at a time, to both address this concept that donors want something really specific to them or really important to them, but also recognizing it's really hard and will work against you in the long run to have 200 discrete funds that you have to keep up with at any one time that you might have run the risk of not being able to honor should the funds not mature fast enough or should you, the student profile change at your school, or whatever that might look like.
Or maybe one day we're not even teaching history anymore. Who knows what that looks like. You know, the possibilities are endless. But the conversation was robust. And I thought that was such an interesting way to come at it, to think, how can we get specific to the institution and still ignite donor enthusiasm with this without digging ourselves into a hole that we can't get out of, either policy-wise or with ill-advised smaller or discrete funds that are definitely going to make an enemy of your business office if they have to track them and help you disseminate those.
George Suttles: There is something you said that really resonates with me. It's the culture of philanthropy. And I want to go, I want to take that idea and reflect back to the earlier question about like, how do you think about starting an endowment? What advice would you give? And I think that's a huge, that's a huge point is, a surveying of the philanthropic landscape that is connected to and surrounds your institution, your school. What's the culture of philanthropy? And, I don't know an elegant way to say this, is: Do you have the donors? Do you have the donors, right?
And so people come to me and say, George, we want to start an endowment. Endowments are great. We love endowments. And I go, okay, well, do you have the, like, what's your plan? Do you have the donors? Can you go to a group of your donors and make a compelling case for them to support the building of an endowment? Do you have an endowment building strategy that's connected to a vibrant culture of philanthropy? And you might want an endowment, but then you might also tap into your donors and they might say, we don't have an appetite for this. You don't have the donors that can support, you know, for lack of a better term, the soft launch of an endowment building strategy.
When I say that, it's similar to, like, a capital campaign. You go to the five or 10 of your big, big donors and you say, we want to build this new building. Is this compelling? Are you in, would you be willing to consider a large commitment to doing this? Right? It's, whether it's your donors or some, you know, partner group that you can go to, right? And so it's the same thing, you know, in a lot of ways with endowment building. Do you have that culture of philanthropy that's going to lend itself to starting and building and continuing to sustain an endowment? And if the answer is yes, great. That's amazing. And if the answer is no, then you have a little bit more work to do around storytelling to maybe sort of conjure up that donor group and inspire a culture of philanthropy that is inclined to support an endowment building strategy down the road, right?
Ann Snyder: I couldn't agree more with you. And this is usually, if this were a presentation in front of a live audience, this is where someone would raise their hand and say, well, what is a culture of philanthropy? How do I know I've got a culture of philanthropy?
And I would just say this for the listener, it's probably a combination of things that you already touched on. And it's really hard to measure. If you're trying to measure your culture of philanthropy in participation rates, that's not a great strategy. Participation is the Advancement Office's measure of how many gifts they can get to check a box. And I'm not saying the Advancement team is doing anything wrong there. I'm saying we in the industry for a long time have focused on participation, when in fact it's not actually a predictive data point. It's telling you how many people are maybe satisfied with the atmosphere at your school or maybe the product they're getting because they're willing to give a little bit. But it's not necessarily a predictive data point that tells you whether or not you're going to achieve your financial goals, of which philanthropy is a piece.
So I would say it's hard to measure, but you know you have a good culture of philanthropy when you take advice from your donors regularly. Culture of philanthropy means that you have donors who consider your school to be in their top one to three philanthropic priorities. And major gifts in terms of not just like five, $10,000 annual fund gifts, although we are super grateful for those and that's a lot for some schools, but major gifts in terms of dollars that significantly contribute to an overall project or goal.
And so, I do think you have to have those things in place in order to start an endowment for sure, or to, even if you have an existing endowment to run a campaign around endowment, or for endowment, to build it. That said, I would also say that endowment is something that can spark that culture of philanthropy if you are talking about it in the right way.
If you're saying to those in your database with capacity that you want to help permanently fund an aspect of the school or the school culture or its academic prowess or anything that goes into the way we deliver on our missions, right? If you can have that conversation with donors, I do think, you know, referencing what we talked about earlier, that donors want to know that they're giving to a responsible cause and group of people who are thinking strategically about the future of the school. That endowment conversation can actually spark a deeper culture of philanthropy because your donors will know that they are giving to a leadership team, to a board of trustees, and to an institution that cares deeply about existing in perpetuity and cares deeply about delivering that mission for students for decades to come, not just living in the day-to-day right now.
George Suttles: You mentioned that an endowment-building effort can spark a culture of philanthropy. I want to zero in on a piece of that culture that is very much connected to endowment building, and that's legacy planning and bequests.
And so I've seen institutions that didn't have a legacy planning sort of division or arm or offering think about endowment and then connect it to legacy in a way, where they didn't know they were activating that culture, if that makes sense. So you start an endowment building strategy or you begin to sort of create a sketch of a plan. You go to donors, you go to alum, and you say, hey, we're going to do this. This is about legacy. This is about sort of keeping a venerable institution, safe and secure for future generations.
And then that sparks a conversation around, and focused on, legacy. And then that opens up opportunities to think about, you know, wills, bequests, and opportunities for folks to put your institution and their legacy planning connected to building and making strategic gifts to the endowment. So when I think about endowment building sparking a culture of philanthropy, I immediately began to think about, right, it's about legacy. It's about securing the future of an institution we all care about. And that can be connected to legacy planning as it pertains to bequests and other vehicles. So I was like, right. Like if you're not having those legacy gift conversations already, that actually might be a nice entree into beginning to have them.
Ann Snyder: I think that's such a good point. And actually, as we begin to wrap up here, too, what I would say, the concept of legacy, I think, is inextricably tied to endowment in general. Not only because of the way donors can make an impact and a lasting impact for generations to come, but how heads and trustees can really, and probably advancement directors who are thinking about raising funds for this, but how they can make an impact for their successor and their successor's successor.
I think what's so challenging about leadership in independent schools is that 80% of what a head of school or a board might do in a day or in a specific board meeting might actually be for those who do not walk the halls of the school yet. It might act, those decisions are actually for kids who will graduate in 20 years, not who are graduating this year. Not every day do we get to make those kinds of calls, but often what's asked of those in leadership is to really think, you know, 10, 20, 30 years down the line. And that's exactly what you've been talking about today in terms of let's set up the policy so that we don't run into problems later.
And so legacy and endowment are inextricably linked in the sense that any school leader who's listening right now and who's thinking about adding to or starting an endowment, or focusing energy on it, is necessarily thinking about the legacy of the school and the levers that someone else one day will be able to pull as a result, which is exciting. I think it's beautiful. I mean, it's hard to, sometimes it's on face value a little bit hard to find beauty and poetry in discussions about asset allocation and spend policy. And yet it's something that can truly protect a school and ensure that some wonderful kid who maybe didn't think they would even have the chance to go to that school, in 20 years, that kiddo can graduate and go off to an amazing university. And maybe that person is the one that ultimately discovers a way to cure breast cancer or to combat diabetes or solve any number of issues in our society. And that's a fun way, I think, for us to consider the work that we do in this area.
George Suttles: Yeah, no, absolutely. And Ann, if you don't mind, just a quick personal anecdote, because we're giving each other chills this entire time, but I got chills from you saying that because, you know, as a proud alum of an independent school, the Dalton School, Go Tigers, class of '99, I was the beneficiary of that institution's endowment largesse to access scholarship funds in order to attend, matriculate, persist and graduate.
And so that was a transformative opportunity. And to your point, you know, now as an alum and a donor, I want to secure that same opportunity for a young person like me, from communities like mine, where I grew up, in the next 10, 15, 20 years. So there is that aspiration. There is that hope. There is that legacy. And when you shared that narrative bit, I was like, right, like, I am the living embodiment of that opportunity, of that legacy, and it's tied to real things and to real feelings and to real people. So I just wanted to thank you for giving me that time to just reflect on that.
Ann Snyder: Thank you for sharing that. I think that's probably one of the most important things we could have reflected on all day, to be honest. And I would also say that endowment draw, on average, represents about 5.3 % of the operating budget. At least I think that was true in 2024, which means that every student at Dalton in the class of ‘99, to one extent or another, benefited from those endowment funds too. Not only because students like you were able to go there and you were friends with probably a lot of the kids whose families maybe contributed to some of those funds. But every single student at a school with an endowment is a direct recipient of benefit from that. And so, you know, I used to tell all of our students that at some point in the year, everyone's receiving financial aid, because the cost to run the school versus what we get in tuition, there's a huge gap there.
So whether it's annual fund or endowment, or any of these other injections of funding into our budget, it's made possible by very generous people and absolutely every student benefits. Thank you for sharing your story and thank you so, so much for joining us today. We are so grateful to have you. It's been so fun getting to know you over the last several years, and Commonfund are great partners to those of us in independent school leadership. So thank you.
George Suttles: Awesome. Thanks, Ann, for your friendship and for your partnership. Really appreciate spending time with you. Thanks.
Ann Snyder: Thank you.