A few weeks ago someone turned to me and asked “What’s the school’s business model?”  I grinned and replied, “tuition in—salaries out.”  That’s only a slight exaggeration.  About 90% of the school’s revenue comes from tuition payments, with the other 10% coming from a combination of annual giving and endowment income. Over 75% of expenses are compensation-related.  Expenses related to our extensive physical plant take the next largest chunk of change, leaving only a little for all of our non-compensation program expenses as well as necessary overhead such as audit fees, insurance, etc.

While there are a few schools, particularly those with large endowments, who are not as tuition dependent as CWA, our business model is pretty much standard in the industry.  The implication of the business model is that there is a direct and inextricable link between the size of raises teachers receive and the size of annual tuition increases.

I’m also often asked why the school is as expensive as it is and why other private schools in the area seem to be able to charge less.  The answer is simple: class size.  On a class-size-adjusted basis, CWA’s tuition is comparable if not less than that of other private schools.  It’s difficult to get hard data about this from other private schools, but in 2006-07, the Tacoma Public School’s cost per student was almost $11,000 a year, with class sizes substantially larger than ours.  That year our average tuition was about $16,600.  With larger class sizes, our costs would be lower, but that’s a trade-off parents have consistently vetoed as not in the best interests of their children, and we certainly agree.

The school has access to quite a lot of benchmark data from other private schools, both in our region and nationally.  We look at this data on a regular basis to ensure that we are not out of line, particularly in the area of expenses.  One interesting indirect measure of CWA’s relative efficiency is to look at the average tuition at comparable private schools in Seattle.  With class sizes similar to ours, most of the well-known Seattle private schools are charging between $4,000 and $5,000 per student per year more than we are!  The cost of living is certainly higher in Seattle, but proportionately surely less so than the difference in tuitions.  Judging by non-faculty staffing levels in some of those schools, we run a pretty lean operation.

Given the vital role that faculty play at CWA, we need to work hard to attract and retain the best faculty we can find.  Searches for ongoing faculty positions are national in scope.  The extensive search process is both exhaustive and sometimes exhausting, but there is nothing more important for our success.  Our faculty compensation, therefore, must be competitive nationally as well as regionally and locally.

We know that parents sacrifice to send their children to Charles Wright.  The process of setting tuition is never easy.  The school and the Board of Trustees wrestle annually with the trade-off that always presents itself: hold tuition down, and thus hold salary increases down, or give more generous raises to the faculty and staff, and raise tuition more.  We really never end up happy with what we’ve done, always feeling that we’ve asked parents for more than would be ideal, but compensated faculty and staff less than we really should.