April 30, 2025
By Jeffrey Mitchell, Head of School, Currey Ingram Academy
Independent school leaders are navigating an increasingly complex financial terrain where sustainability pressures, program excellence, and facility upkeep converge. In the February SAIS heads pulse survey, 29% of respondents named financial sustainability among the top five areas in which they seek support from SAIS to build institutional and team capacity. Not far behind, 24% identified current and deferred facility maintenance projects as a top challenge, and 22% cited their school’s financial position and resource demands. These concerns indicate a need for heads to be supported regarding a strategic financial and facility planning approach.
One particularly urgent issue is deferred maintenance, a quiet but potentially costly threat to a school’s long-term viability. While recommendations vary, leading industry guidance suggests that schools allocate approximately 2% of their operating budgets annually to address deferred maintenance. That equates to annual allocations of $100,000 for a $5 million budget and $600,000 for a $30 million budget. These figures can feel daunting, especially when competing with more visible priorities, but the cost of postponing maintenance can be far more significant. Minor unchecked problems often grow into major disruptions, threatening not only budgets, but also safety, aesthetics, and community confidence.
Even well-resourced schools are not immune to the compounding risks of aging facilities. The real challenge lies in knowing when and how to invest, determining what must be addressed now, what can wait, and how those decisions align with a school’s strategic vision. This article is written for heads grappling with that ongoing cost-benefit analysis. It offers practical insights and frameworks to ensure that your financial planning sustains your facilities and leverages them as assets that actively support your mission and future.
To start, increase your awareness of the metrics, resources, and tools available to help you understand your financials and facilities.
The National Business Officers Association (NBOA) provides guidelines to help independent schools assess and manage their facilities’ financial health. One key metric is the “age of plant,” which measures the average age of a school’s facilities. This is calculated by dividing the accumulated depreciation of plant assets by the annual depreciation expense.
For example, your “Age of Plant” is 20 years if your Accumulated Depreciation is $10,000,000 and your Annual Depreciation expense is $500,000.
The annual depreciation expense for a particular asset is calculated by spreading the cost of a capital asset over its useful life, typically using one of several accepted accounting methods. The straight-line depreciation method is commonly used for most independent schools due to its simplicity and consistency.
Here’s how it works: Annual Depreciation Expense = Cost of the Asset – Salvage Value / Useful Life of the Asset (in years).
The cost of the asset is the purchase price or cost to construct the asset, including related expenses (e.g., installation, legal fees). The salvage value is the estimated value of the asset at the end of its useful life (often assumed to be $0 for simplicity in nonprofit accounting). The useful life is the estimated period in which the asset will provide value to the school. Examples: buildings: 30–50 years, major renovations or HVAC systems: 15–25 years, computers and technology: 3–5 years, and vehicles: 5–10 years.
For example, if a school constructs a science wing for $4,000,000 with an estimated useful life of 40 years and a salvage value of $0, the school would record $100,000 as depreciation expense annually for 40 years.
Remember that while depreciation doesn’t affect cash directly, it matters because it potentially lowers overinflated reported surpluses, signals asset aging for capital planning, helps schools remain GAAP-compliant, and can be used in calculating metrics like plant age, which reflects long-term financial and facility sustainability. While specific target ceilings can vary based on a school’s unique circumstances, NBOA suggests that an overall Age of Plant exceeding 15 years may indicate underinvestment in facility maintenance and renewal. This could signal deferred maintenance issues that might lead to higher costs in the future. Schools should regularly assess their plant age metric to maintain a healthy and modern campus environment. Implementing proactive maintenance and capital renewal plans can help manage this effectively.
The table below presents valuable data points related to finance and facility sustainability. The table presents the medians for six finance and facility measures for both NAIS and SAIS schools over the past five years.
Total Acres and Square Feet Under Roof are clear measures of campus area. Simply understanding how your total acreage or total square footage compares with other schools is useful. More useful is conducting deeper analyses, such as determining your plant expense per square foot. You might also divide your Total Acres and/or Square Feet Under Roof by total enrollment to determine area per student. To further help contextualize the data, benchmarking your per-square-foot plant expense might be helpful.
Industry guidance suggests that schools allocate approximately 2% of their operating budgets annually to address deferred maintenance. The Plant Reserves data below show the total accumulated median amounts in NAIS and SAIS schools and demonstrate that the typical school is well behind the recommended benchmark for deferred maintenance.
At this point, it is helpful to distinguish deferred maintenance from depreciation. Deferred maintenance reserves are actual cash set aside to fund eventual repairs or replacements, and depreciation is an accounting construct that recognizes the declining value of a capital asset. Thus, while depreciation signals a building’s theoretical “aging,” the 2% guidance reflects the need for liquid funds to address physical deterioration. They serve related but distinct financial planning purposes.
For example, if your “age of plant” is 10 years and your annual budget is $20,000,000, then ideally, you would have 10 (years) x ($20,000,000 x 2% = $400,000) = $4,000,000 in Plant Reserves (Deferred Maintenance funds). The medians for our schools are nowhere near this number.
This calculation, however, needs to acknowledge the variability of actual outlays. Schools should conduct a capital replacement schedule to determine when costs will occur (e.g., HVAC at year 10) rather than assuming a linear accumulation of 2% over time. Best practice would be to have schools use the PPRRSM model (Provision for Plant Replacement, Renewal, and Special Maintenance) to guide this process.
Finally, NAIS and SAIS medians are useful directional indicators, but heads should compare themselves with peer schools by enrollment, location, or campus scale when possible.
NAIS vs. SAIS Facility Measures (Medians)
The ISM Stability Markers1 provide a framework for heads of independent schools who seek to ensure long-term institutional health through robust financial and facility planning. Fifteen markers assess a school’s strategic, financial, operational, and cultural well-being using a comprehensive, point-based system. When used effectively, they move schools beyond anecdotal or reactive planning toward a disciplined, data-driven approach to stability and growth.
Markers particularly critical to financial and facility planning include Cash Reserves, Debt, and Endowment Mix, the presence of a Strategic Plan and Strategic Financial Plan, and the development of a Master Property, Facilities, and Technology-Infrastructure Plan. These elements require school leaders to consider how much they have and owe and how their capital and operational strategies align with their long-term vision. Schools protect themselves from fiscal short-sightedness by embedding financial planning into strategic documents that extend four or more years into the future and ensuring that leadership routinely reviews these.
The markers also highlight the importance of facility quality and budgeted deferred maintenance, ensuring that physical plant decisions support the educational mission. Facility neglect erodes morale and learning conditions and can become a significant financial liability. ISM’s framework prompts leaders to conduct regular assessments and build realistic, mission-aligned facility budgets.
Furthermore, the Stability Markers enable benchmarking. Schools scoring in the “Thriving” range (90–100 points out of 147) have the strategic and financial confidence to pursue innovation. In contrast, those in the “Unstable” or “Uncertain” ranges receive a clear mandate for intervention. In this way, the ISM Stability Markers are more than an evaluative tool—they are a strategic compass. They help school heads and their boards translate aspiration into action, planning into preparedness, and mission into measurable momentum.
Effective financial and facility planning for independent schools requires a comprehensive approach integrating vision with practical stewardship of physical assets. Strategic planning provides the institutional north star, aligning mission, enrollment goals, and programmatic aspirations with long-term infrastructure needs. A well-articulated campus master plan translates this vision into a physical roadmap, ensuring facilities evolve to support educational excellence and community growth. Layered within this, a strategic financial plan weaves together enrollment projections, fundraising capacity, and capital expenditures to sustain the institution’s financial health.
Regular facility assessments, meanwhile, offer a data-informed foundation for prioritizing repairs, renovations, and replacements—helping school leaders make prudent, mission-driven investments. These elements reinforce a culture of foresight, resilience, and responsible resource management. MISBO consortium partner Building Solutions does a thorough facilities audit for schools that lays out maintenance and replacement costs in a way that is easy to understand and to use.
The 2024 NBOA report, “Empowering Business Offices to Harness the Power of AI,” highlights artificial intelligence’s transformative financial and operational management capabilities within independent schools. The report emphasizes AI’s potential to efficiently support predictive maintenance, scheduling optimization, automated reporting, financial analysis, compliance monitoring, human resources management, and facility oversight.
When considering financial and facility sustainability, independent schools must look beyond tuition and fundraising and begin to view their campuses as underutilized assets with untapped potential. Most schools operate on a 175-day academic calendar, meaning their facilities sit relatively idle for a good portion of the year, not to mention many evenings throughout the school year.
Maximizing facility use begins with an entrepreneurial mindset. Schools can explore rentals to athletic leagues, performing arts organizations, or corporate training programs to generate consistent revenue. With thoughtful scheduling and stewardship, these activities can occur without interfering with core school operations. Some schools go a step further by launching for-profit ventures that align with their mission, such as early childhood centers, adult learning programs, or wellness offerings, which can serve the community and the bottom line. Gifts in kind—such as equipment, furniture, or technology—can be secured in exchange for visibility or access.
Schools may also pursue unique collaborations with corporations, universities, hospitals, or cultural institutions that need space and are aligned with the school’s values. When I was head of school at Tuscaloosa Academy, we developed a unique partnership with Mercedes-Benz. With a vast production facility in the area, Mercedes always had many expatriate workers from Germany working in the plant. An excellent school option was necessary to provide the quality of educational experience that the employees desired for their children. Although there was a lot more to it, we agreed that (under-enrolled) Tuscaloosa Academy would discount tuition for Mercedes-Benz employees, relative to the number of students provided. Moreover, Mercedes-Benz would pay that tuition up front. Our enrollment increased by 25 percent as a result.
At Currey Ingram Academy, we struck a deal with the local professional soccer franchise, which invested several million dollars to upgrade our athletic facilities in exchange for long-term access for their youth academy. We also have a long-term rental agreement with our cleaning and maintenance provider, which generates rental revenue and a lot of goodwill with this important school partner.
Ultimately, this approach requires a shift in mindset from viewing facilities as static costs to dynamic resources. By reimagining how, when, and by whom campus spaces are used, schools can unlock new income streams, deepen community ties, and support long-term sustainability, without compromising their core educational mission.
In pursuing financial sustainability, independent schools must embrace a more expansive view that sees every dollar, building, partnership, and decision as part of an ecosystem of mission and stewardship. This article has underscored the value of data-informed planning, the importance of addressing deferred maintenance, the strategic use of depreciation, and the creative potential of maximizing facility use. Together, these practices form a robust framework for ensuring that our schools remain not just solvent but vibrant and forward-facing.
We are at a pivotal moment in the independent school landscape. With rising costs, aging infrastructure, and evolving expectations from families, boards, and staff, school leaders cannot afford to rely on tradition or intuition alone. Strategic financial and facility planning is no longer a luxury—it is a leadership imperative. Fortunately, the tools and insights are available, and models of success are growing. Schools that plan with foresight, invest with discipline, and partner with creativity will not only weather challenges but will lead with confidence.
As Peter Drucker once said, “The best way to predict the future is to create it.” For independent school heads, that future begins now—with courageous planning, intentional budgeting, and a renewed commitment to treating every aspect of our operations as mission-critical. Let us lead accordingly.
1See this summary adapted from the ISM Stability Markers as summarized by FCIS.
See our resource on Developing a Strategy to Manage Deferred Maintenance for additional information and templates.
Whether you’re new to campus operations or a seasoned leader looking to sharpen your strategic lens, these five metrics offer a powerful snapshot of your school’s financial and facility health.
These five indicators offer operational clarity and compelling data for board discussions and strategic planning sessions. When monitored over time, they tell the story of your campus’s health and readiness for the future.
Dr. Jeffrey L. Mitchell is the head of school at Currey Ingram Academy in Brentwood, TN, where he has been since 2014. Prior to coming to Currey Ingram, Dr. Mitchell served for five years as head of Tuscaloosa Academy in Alabama, four years as director of Park Tudor Lower School in Indiana, and as a teacher and administrator for 11 years at St. George’s School in Vancouver, British Columbia. He received his B.A. from the University of Winnipeg and both his master’s in educational administration and his Ph.D. from the University of British Columbia. His passion is educating students with learning differences.
