Calfee Financial
Advisors^®, Inc.

Calfee Financial Advisors provides holistic and global financial planning, guidance and other services to individuals and institutions. Peter Calfee is a registered representative with and offers securities and advisory services through LPL Financial (LPL)Member FINRA/SIPC. Calfee Financial Advisors, Inc., is separate from LPL Financial (LPL) and is not a broker dealer.

Compensation and Benefits Case Studies for Non-profit Institutions and Independent Schools

Identifying under compensation issues before key staff leaves

Issue: A prominent K-12 independent day school retained Calfee Financial to develop a compensation package for a head of school critical to the institution’s success. With board approval, the management team agreed to develop comprehensive compensation program to retain the head for years to come.

Our process: We approach compensation issues from a planning perspective. Often we find educational personnel do not examine thoroughly their own financial future. The long-term history of the school, constituent development, importance of faculty, and financial operational constraints led us to determine that more was at stake than a competitive compensation package for the head of school alone. Interviews with the head revealed that he was extraordinarily concerned that faculty and staff compensation had fallen precipitously below competing schools.

The head agreed to development of a comprehensive plan for him only with board approval to develop concurrently a comprehensive faculty and staff compensation program that would track benchmark data and account for inflation and merit. Both the proposed compensation programs had to be financially viable for years of school budgets to come.

Calfee Financial developed the rationale for salary and benefit comparisons with local and national peer schools as well as public school pay scales and benefits (current and in retirement). Part of the process including analyzing the cash flows for the 1,000-student school. We determined that without significant endowment and annual giving increases, there was no way to balance the budget in years to come and compensate in a fair and competitive way. Staff interviews revealed entire aged tiers of faculty were developing plans to resign simply because cost of living, housing, and transportation were beyond their take home pay. We presented these findings to the entire board with comprehensive support for the financials.

Result: The board conducted a retreat to consider these proposals and after adequate discussion, approved the head, faculty and staff packages and programs as recommended by Calfee Financial.

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