LC Financing: Behind the Scenes

Lana Sheng '22, Staff Writer

Money. It is often a taboo subject, and even the mention of it can make people squirm. Loomis Chaffee believes in transparency; by showing its detailed financial transactions, the school hopes that students and parents can better understand how Loomis operates.

Loomis’s annual operating budget is around $56 million dollars, of which 42% goes to faculty and staff salaries and benefits, and 5% goes to feeding our hungry community with nutritious foods. Other expenditures, including building maintenance, student support, academic and dorm budgets, athletics, administrative communications, IT budget, and fundraising all cost a pretty penny as well. Lastly, financial aid takes up about 19% of the budget.

The tuition for day students is $46,280 a year, for boarding students $60,540 a year, and the weighted annual average is around $57,500 per student. However, the true cost of educating a Loomis student is around $80,000; therefore, there is a shortfall of $22,500 per student each year.

Naturally, one may wonder how Loomis affords to educate its students. This is where the importance of gifts and the endowment comes in. Each year, alumni and parents of students donate gifts to help maintain and improve the school. For example, Mr. Kravis gives a generous annual gift restricted to financial aid.

An endowment is like a trust fund; it is an accumulation of gifts over time. Loomis has been building theirs for around a hundred years, and currently there is around $200 million. Interestingly, in Loomis’s early years, education was free for all up until the 1960s, thanks to the endowment.

A concept called intergenerational equity is used to determine how much of the endowment should be taken out each year. The finance wizards of Loomis take the average of the total endowment over 12 quarters (3 years), and find 5% of that number, which is currently around $9 million.

The rest of the endowment doesn’t just sit in a dusty corner; the school uses professional managers like Cambridge Associates to invest in companies such as Apple and Amazon, various industries, and emerging markets like Vietnam and China. Loomis believes in the long term, so by investing prudently, they are investing in the next generations of students.

By doing this, Loomis creates a safe foundation for its finance, so it can ensure it has ample funds for the future.

As for future projects, our school has been preparing to renovate the Grubbs Quad dorms, hopefully within the next year or two. Loomis has been saving for the past ten years in anticipation of this project, and the price tag on this project has yet to be determined, but it will be hefty.

The building fund is like the endowment as it gets invested, but no money is withdrawn annually, and it is for projects such as building renovations rather than financial aid.

Other plans include a new multipurpose field, landscaping and walkways, and perhaps improvement on the NEO.

All above numbers are provided by Mr. Richard Esposito, CFO of Loomis Chaffee. He leads the school’s financial activities, including budgeting, financial reporting, and strategic planning.