Perspective: A Tool You Need To Lead

Two new research reports on critical aspects of independent school business can help your school understand its financial position and strengthen it.

Mar 28, 2023  |  By Jeff Shields, FASAE, CAE

Jeffrey Shields, FASAE, CAE
NBOA President and CEO

Like you, the staff at NBOA are thinking about Covenant School in Nashville, a member school, and all those impacted by yesterday morning’s tragedy. My sincerest condolences go out to the learning community, families and those in the city who know Covenant well.

Independent school leaders may be facing questions at this time regarding what they are doing to keep their schools safe. We have compiled resources that may help with these and related questions. I hope those of us who lead independent schools can stand in solidarity with the victims and remain vigilant against acts of violence.


One of the many benefits of being part of the NBOA community is perspective. Often I talk about collegial connections, problem solving and solution sharing, all of which are vital parts of our national association. Together they may be best distilled as the idea of perspective. You’ve gained perspective when a trusted peer looks you in the eye and truly understands your situation, or when a colleague who faced a similar situation at their school offers an entirely different point of view. This greater, rounder understanding allows each of us to step out of our busy day-to-day, away from our crowded calendars and inboxes, and see things differently and oftentimes more clearly.

Perspective equips you to separate the signal from the noise, as they say, and fulfill your leadership role. NBOA fosters this capacity in numerous ways, not least of which is our research agenda. We compile and curate data points and ratios, ensure data integrity, and report findings back to you to help you make sense of the landscape, move forward with strategic decisions, and steward your school toward a healthy financial future. This month, NBOA released two exciting and impactful research reports: Financial State of the Industry: BIIS Financial and Operational Indicators: 2020-2022 and the Commonfund Study of Independent Schools.

The Financial State of the Industry (FSI) is the only research study based on the audited financial statements of independent schools, and this year’s report draws on an expanded national data set, which is a direct result of our partnership with NAIS’s Data Analysis for School Leaders (DASL) data collection platform. The headline of this year’s FSI is that median financial aid allocations increased 11.8%, more than twice the rate of net tuition and fees, which increased 4.1%. Also of note in our current environment: the median increase in payroll and benefits per FTE was a conservative 3% between FY21 and FY22, while the 90th percentile of schools had an 18% increase. The FSI includes an executive summary and analysis of 17 financial indicators in tuition, enrollment, expenses, annual giving and other areas of interest. Analyses are presented for day schools and schools with boarding, as well as by school enrollment. The FSI report FSI report is free to NBOA member schools and available for purchase by nonmembers.

Another key component of NBOA’s research agenda is our annual partnership with Commonfund Institute to survey independent schools on trends in their endowments. The Commonfund Study of Independent Schools explores total returns, asset allocation, spending-and-fund flows, and debt as well as investment management and governance. Institutions participating in the FY22 study reported an average annual return on their endowment assets of -11.3%. Compared to the 25.8% gain reported for FY21, the year-over-year reversal was the largest since the study commenced in 2005. The FY22 return also represented the second greatest decrease in endowment assets in the history of the study; the record low of -18% was reported for FY09 in the wake of that year’s financial crisis. Thus, poor investment returns and rising inflation have struck independent schools simultaneously. While the steep rise in inflation raises schools’ operating costs, it also hurts financial markets, which erodes the long-term assets on which endowed schools depend to support their annual budgets. This report report is available only to NBOA members.

Schools that had strong investment returns over the previous decade and that managed expenses prudently should have a buffer, but a prolonged market downturn or an economic recession would greatly heighten the pressure on the PK-12 independent school community. NBOA will stay abreast of this situation and provide updates as needed.

In the meantime, these two research reports may inform your school’s financial decision-making. Understanding and recognizing broader financial perspectives is the first step necessary to educate the board of trustees at your school, problem solve with your fellow administrative leaders, and formulate strategies to move forward collaboratively with your business office team. Gaining a wider, shared outlook may be sobering or difficult, but it is also a gift — an unparalleled tool to help advance your school during these uncertain times. In whatever ways are open to you, take the time to gain the perspective you need to lead.

Jeff Shields signature


Jeff Shields

Jeffrey Shields, FASAE, CAE

President and CEO


Washington, DC

Jeff Shields, FASAE, CAE, has served as president and CEO of the NBOA since March 2010. NBOA is the premier national association serving the needs of business officers and business operations staff at independent schools. Shields, an active member of the American Society of Association Executives, has been recognized as an ASAE Fellow (FASAE) and earned the Certified Association Executive (CAE) professional designation. His current board service includes serving as a director for AMHIC, a healthcare consortium for educational associations in Washington, DC, as well as a trustee for the Enrollment Management Association. Previous board service includes serving as a director for the American Society of Association Executives, as a director for One Schoolhouse, an innovative online school offering supplemental education to independent schools, and as a trustee for Georgetown Day School in Washington, DC. Shields holds a BA from Shippensburg University and an MA from The Ohio State University.

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