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Making it possible for the next generation
This spring I learned of nine students who would not be returning to Lancaster Mennonite School because their families cannot afford tuition, even after receiving financial aid.
It is obvious that LMS needs to increase its financial aid to our middle income families who have several children. This need, which matches what private school educational journals are saying, presents a real challenge.
School revenue is provided by tuition, gifts to the Annual Fund, endowment earnings and other income such as rental of school buildings. Tuition increases and donations tend to be in line with inflation, and rental income has basically maxed out. So, where will the money come from?
Increasing tuition to increase aid for middle level income families would lead to a less diverse, more elitist school that would run counter to our biblical values and vision. Therefore, if the next generation of students is going to receive the values-added education the school provides, the LMS Endowment needs to increase significantly.
This vision will require significant efforts in planned giving and estate planning. Our endowment management formula allows us to use five percent of the endowment’s value each year for need-based scholarships. With the money wisely invested, our goal is to earn enough beyond the five percent to maintain the earning power of the endowment.
If a family has four children they could have a tuition bill as high as $25,000 (depending on the grades of the children). If the family has an adjusted gross income of $85,000 it would mean tuition would use nearly 30 percent of this income. It is assumed that most families cannot pay more than 15 percent of their income to tuition. With that reasoning, this family could afford to pay about $12,000 in tuition and would require a grant of $13,000.
Based on the endowment formula, LMS would need $260,000 of endowment to provide the needed aid for this one family. We are working with other families who may have two children and a total income of $25,000. How much of their income should they spend on tuition? If they spend $1,000, the school would need to provide up to $11,000 of need-based aid.
In these post-modern times we believe a Christ-centered education is increasingly important if we are to pass on faith to the next generation. Given the moral climate in which we live and the increasing financial squeeze families are experiencing, we believe God is calling more persons to make a major investment through the LMS endowment. This vision will require gifts of $5–10 million and many others up to $1 million.
Many will give through their estates. Others will choose to give before they die so they can celebrate the difference their gift is making. I have been at LMS for over 30 years and usually do not know who is receiving financial aid. However, at times I do learn of a student who has received a major amount of aid who also is making a wonderful contribution in the church and society.
Through our giving and estate planning, you and I can increase the number of families who can afford a transforming Christ-centered education for their children. Please contact Heidi Stoltzfus, Jeff Shank or myself if you would like to learn more about your various giving options. As you join in this vision, you will be providing a Christ-centered education that transforms lives and changes our world.
