Financial Incentives & Structure For Change

jim-joseph-logo-for-portfolioThe catalyst for change was undoubtedly the generous financial support of the Jim Joseph Foundation, which provided the funding to jump-start the tuition assistance distribution for middle-income families, to subsidize the creation and/or bolstering of schools’ development infrastructure, and to enable BJE to allocate staff resources to provide the infrastructure and scaffolding support to move the initiative forward.

 

 

  • > MIDDLE INCOME STUDENT FINANCIAL ASSISTANCE

    Of the $12.7million six-year grant (2008-2014) to the Jewish Federation of Greater Los Angeles, over $7.4million in middle-income tuition assistance went directly to the five participating high schools to provide financial assistance to new and continuing students from middle income families.  This grant was made on a challenge basis to the Los Angeles community, with the specific purpose both to stabilize and to incrementally increase the enrollment of students from middle income families. The objectives of the Foundation grant were:

    lightIncrease tuition subsidies to teens from middle-income families to attend Jewish high schools

    lightIncrease enrollment in the five participating Jewish high schools

    lightStimulate $21.25 million of community endowment fundraising (both communal and school-based)

    lightCreate a model for high school tuition subsidy support that is adaptable to other communities

  • > INCENTIVES FOR SCHOOLS TO RAISE ENDOWMENT DOLLARS

     

    In order to build capacity at the schools to raise endowment funds, the Jim Joseph Foundation grant:

    lightEstablished benchmarks that served as the basis for grant payment; and

    lightProvided support to the schools to increase their fundraising capacity to build and sustain endowments.

    Structuring the grant in this manner helped ensure the schools’ ability to have the resources to continue to provide financial assistance to students from middle income families beyond the grant period.  The Los Angeles community had to secure and deposit $4.25 million communally before the grant could begin. The schools also committed to raising an additional $17 million in matching funds, which would sustain funding in perpetuity (reaching $21.25 million total), with each school having a fundraising requirement ranging from $2 million to $5 million depending on school budget size. In a community where endowment was not part of the day school vernacular, there was a need to incentivize a cultural shift so that school professional and lay leadership, as well as the broader community, could recognize the need for endowment to ensure the future of day school education in Los Angeles.

    To support fundraising, the grant provided over $4.1million to support schools in increasing their capacity to build and sustain active endowment initiatives. Funds were used to hire development staff and coaches, establish donor tracking programs and create development marketing materials.

    lainer logoThe impetus for the cultural change on a communal level began with the establishment of the Simha & Sara Lainer Day School Endowment Fund (Lainer Fund), which provided the first $4.25 million necessary to secure the start of the Jim Joseph Foundation grant.  Along with this gift the Lainer Family pledged up to $5 million if the community could raise an additional $15 million to create a $20 million community endowment fund.

    The Lainer Fund endowment provides an additional 1:4 match on all new endowment dollars raised by the five schools. For example, a school which raises $2 million dollars for their endowment fund today will receive the spending rate benefit of a $500,000 match. This will result in an annual income of approximately $100,000/year based on a 4 percent spending rate. Most importantly, the funds will continue to grow and thus annual income for LAHSAI high schools will be there in perpetuity and increase over time. Because of this additional incentive and the cultural shift that has begun as a result of the LAHSAI, 12 additional Los Angeles day schools are now actively building endowment and therefore benefiting from the 25 percent match from the Lainer Fund.