A Madison-area private K-12 school recently wrestled with whether to keep more than a million dollars in federal COVID-19 funding, a question private schools across the country have faced in recent weeks.
Some government leaders, including President Donald Trump, called on prestigious prep schools with large endowments to return the money. Several did.
Madison Country Day School in Waunakee appeared poised to do the same, with the school’s Board of Trustees initially deciding to return the money. But the board unanimously reversed course in early May, according to emails obtained by the Wisconsin State Journal.
Just 12 hours later, six board members resigned.
The controversy at Madison Country Day illustrates what many others have quietly calculated in recent months: whether taking the money outweighs the reputational cost of accepting government assistance.
Of Wisconsin’s nine other top private schools, just one confirmed it accepted federal money through the Paycheck Protection Program, a loan program that helps bail out struggling businesses and nonprofits whose finances suffered because of the coronavirus pandemic.
Unlike public schools, which are already bracing for potential state budget cuts, private schools have access to the loan program.
But these schools, too, are under incredible financial strain brought by the pandemic, according to Sharon Schmeling, executive director of the Wisconsin Council of Religious and Independent Schools.
“When people think about private education, they think about the Hollywood version, the mini Harvards,” she said.
The vast majority of Wisconsin’s private schools aren’t like that, she said. Many are run by churches and rely on three sources of revenue — tuition, their church and fundraising — all of which have taken a hit over the past several months.
Churches have lost revenue from weekly collection baskets that didn’t get passed for months because services moved online, plus canceled Lenten fish fry’s, pancake breakfasts, spring rummage sales and spaghetti dinners because of COVID-19.
Federal assistance can help make up for some of those losses, Schmeling said, though the council hasn’t taken a stance on whether schools should accept the funds nor are they tracking which ones have.
The “real help” will come from other federal funding, she said. For example, Wisconsin is slated to receive $175 million from Congress for K-12 schools through what’s known as the Governor’s Emergency Education Relief Fund. The law allows governors to disperse the money as they see fit, so private schools could potentially be left out of distribution.
Melissa Baldauff, a spokeswoman for Democratic Gov. Tony Evers, did not respond to two emails asking whether Evers would include private schools in the allocation of these funds.
“Everyone’s equally hit by this pandemic,” Schmeling said. “Every school is being affected by this with additional costs and problems to mitigate.”
To honor contracts
Madison Country Day School, which enrolls about 450 students in pre-kindergarten through 12th grade, opened in 1997. Nearly 90% of the school’s operating budget comes from tuition, which costs between $15,000 and nearly $20,000 annually depending on the grade level. The school has a restricted endowment of $220,000.
Interim head of school Devon Davis, who declined an interview request, said in an email that the school accepted a $1.1 million loan to honor faculty and staff contracts for the 2019-20 school year. The school has 77 employees.
The school’s Board of Trustees initially decided to return the money “based on a desire to take the most conservative course of action to protect the school from any financial or reputational risk,” according to an email sent last month to the school community by board vice chairwoman Lynn Cichocki.
But the board later decided to host a town hall meeting for staff and parents, engaging in a “spirited” and “robust” debate on the topic, she said. The community overwhelmingly supported accepting the money and was “comfortable with any associated risk in doing so.”
The board unanimously voted to keep the money on a Sunday evening in early May. The resignation of six board members was announced by Cichocki in another email at 7:32 a.m. the next day.
Davis declined to elaborate on the board members’ departures, saying only that the decision to keep the money preceded the resignations. She also said the board grappled with protecting the school’s ability to deliver a high-quality education and understanding the “constantly shifting” guidelines of the loan program.
Board chairman Bruce Bosben did not return two messages left in late May at his workplace.
It’s unclear how many other private Wisconsin schools received money through the Paycheck Protection Program. The U.S. Small Business Administration, which manages the program, has refused to release a full list of the loan recipients, information that several national media outlets are now suing to obtain.
Madison Country Day is among the top 10 private high schools in the state, according to a list maintained by Niche, a school and neighborhood data clearinghouse that ranks schools based on test scores, surveys, student-teacher ratios and the rank of colleges that students are most interested in or go on to attend.
The State Journal contacted the nine other schools on the list to ask how the pandemic had affected their operations and whether they had accepted federal relief money.
Six schools — University School of Milwaukee, The Prairie School, Wayland Academy, Edgewood High School, Divine Savior Holy Angels High School and St. Lawrence Seminary High School — did not return calls and emails left late last month. Two more, University Lake School and Marquette University High School, declined to answer questions.
The final school on the list, North Cedar Academy, confirmed it had accepted federal relief money. Though executive director Don Smith declined to disclose how much the academy received, he said it was less than $1 million.
The private boarding school in Ladysmith enrolls about 100 students and Smith said he expects to see a drop in tuition money next school year. With the fall semester still up in the air, some families are waiting on enrollment contracts. The loan from this spring helped the school avoid laying off some employees, he said.
“If we were Andover or Exeter sitting on a billion-dollar endowment, we would not have accepted it,” Smith said, referring to two prestigious boarding schools on the East Coast. “And I get that. But we’re not. We’re primarily funded by tuition and this (money) was a bridge mechanism for us that was very helpful.”
Editor's note: This story has been updated to correct the gender of the interim head of Madison Country Day School and the name of the Wisconsin Council of Religious and Independent Schools.
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