Riverdale’s Budget, Uncovered
How much does it cost to run a school like Riverdale Country School? From paying teachers’ salaries to keeping the lights on, the budget is integral to every facet of Riverdale. However, the budget often operates invisibly, and taking the luxuries for granted is easy. In an effort to explore the behind-the-scenes of Riverdale’s revenue, expenses, and all decision-making in between, The Riverdale Review interviewed Ms. Kari Ostrem, Head of School, and Ms. Hanifa Barnes, Assistant Head of School for Strategy and Operations.
Contrary to popular belief, the tuition of over one thousand students is not enough to run a school like Riverdale. Instead, Riverdale receives revenue from three main sources: tuition, the endowment, and the annual fund. Currently, Riverdale receives about 87% of its revenue through tuition. However, one of Ms. Ostrem’s goals is to expand the endowment and make Riverdale less tuition-dependent. She explained: “Endowment is crucial to the long-term health of our school and institutions like ours. The only way to bend the curve of the rising cost of tuition is to grow the endowment. I see myself as a steward of Riverdale today for future generations and a robust endowment is one of the greatest gifts we can provide for future leaders and students alike.” Riverdale’s endowment is worth about $82.5 million. As tuition costs continue to rise due to the inflated cost of living, Ms. Ostrem believes expanding the endowment could also take pressure off tuition. Moreover, the endowment leaves room for unexpected expenses. For example, during the COVID-19 pandemic, Riverdale dipped into the endowment to pay for tents, trailers, and COVID tests. Ms. Ostrem called it “not just a rainy day fund, but a hurricane fund.”
Riverdale is also reliant on donations for revenue. Riverdale, like many other institutions, is a 501c3 non-profit. Ms. Ostrem notes that the culture of philanthropy is “very uniquely US driven.” Within the revenue pie chart, she told The Review, “The operating cost divided by the numbers of students is about $10,000 more than tuition, and that difference is made up by philanthropy - by the Annual Fund and endowment. In our Annual Fund, parents, alumni, past parents, grandparents, faculty, staff and friends come together to raise money and fill “the gap” to make our budget work each and every year. I’m really inspired by the generosity in this support - gifts range from $5 to $50,000 and more and each and every gift comes together to support all students the same way and makes a Riverdale experience possible.” She also appreciates the commitment to tuition: “We consider it a great honor to be able to have amazing students and to have parents who trust us with the students first, but also with the financial commitment of sending their students here.”
Planning the budget for the coming school year starts in October. Tuition is set in January to send out re-enrollment contracts—before the school actually knows how many students are expected to enroll next year. Then, the final plan is approved for June 30th, and the fiscal year starts July 1.
Making decisions for a budget of about $100 million is no easy task, especially since no penny is considered lightly. Most of the budget spending breaks into three categories: salaries, program and instruction, and the campus itself. Ms. Ostrem and Ms. Barnes use a “zero-based budgeting approach” by starting each budget at zero and creating budgets based on program needs. Programs have budget owners that create proposals which are approved by Ms. Ostrem and Ms. Barnes. Decisions are extremely collaborative. Ms. Barnes calls the budget “a collaborative conversation around the student experience for the upcoming year and the resources necessary to provide said experience.” Riverdale also aims to spend all of its funds. Ms. Barnes explained: “We should not have a surplus or any additional funds that are unused. All budgeted funds for the fiscal year should go into the school.”
Moreover, because Riverdale is a 501c3 nonprofit, Ms. Barnes and Ms. Ostrem juggle additional responsibilities. Riverdale must follow certain regulatory requirements. For example, teachers must meet certain state compliances past a background check, especially those working in the Infant Toddler Center. On the other hand, nonprofits are exempt from property taxes, which Ms. Ostrem calls “an enormous benefit.”
When making decisions for the budget, Ms. Ostrem and Ms. Barnes also consider summer projects and long term projects. The school has a $2 million budget for small capital projects, projects that can be executed over summer break. Last year, small capital projects utilized the $2 million budget and special fundraising to add a treehouse at the Lower School, renovate the bus turnaround, and renovate Bertino Field. Ms. Barnes argues that summer is extremely important to the development of Riverdale spaces: “The summer gives us a lot of time to actively beautify and/or enhance the space based on needs. We think about those projects that need to happen so they are completed by the time students return to campus in the fall.” This year, they hope to focus on projects that support athletics. For long-term capital projects, Ms. Ostrem hopes to renovate the Weinstein Science building and build a theater that fits the entire Upper School. Both projects will need special fundraising.
The budget is centered around the student experience. When making decisions, Ms. Ostrem thinks about three key things: bridging connections in an increasingly polarized world, sustainability, and being better neighbors. She wants to place emphasis on professional development such as election discussion spaces, or even hosting speakers such as Nadine Strossen in the recent Zelnic Lecture. Meanwhile, sustainability will save money and benefit the environment. Examples of sustainability include the Freight Farm or the forthcoming solar panel installation. Most notably, Ms. Ostrem hopes the Riverdale community will continue to spread kindness both within the local community and on a global scale. She hopes that Bronx neighbors will say: “There’s always a Riverdale student helping somewhere.”
Like everything at Riverdale, a lot of thought and expertise goes into planning and allocating funds. Though the work can sometimes feel guarded, Ms. Barnes hopes that the finance office will aim to further infuse itself into the community: “It can feel transactional, but we make every effort to make it feel less transactional and more community-based.” Running a school really is no easy task.
