A few weeks ago, Ely Rosenstock wrote a wonderful piece about the “tuition tax” and the need for parents to make sound financial decisions based on the affordability of a neighborhood and a day school. His piece, like my own previous essay, “A Transparent Proposal,” was inspired by Moriah Day School’s Tuition Assistance Program.
Rosenstock’s thesis that a primary driver of the tuition crisis is “poor financial management and life-decision making” is given with no limitations. He, perhaps unintentionally, implies that parents should be reducing the number of children they have, or even forgoing childbearing altogether if they cannot afford the cost of living in an Orthodox community and paying the full cost of education. Taken to the extreme, Orthodox Jewish families with limited means should be homesteading in towns with lower housing costs, even if there is no infrastructure to support an Orthodox lifestyle.
For Orthodox Jews, choosing neighborhoods and schools and maintaining a sound financial footing are often at distinct odds. As we learned in the recent Pew study of American Jewish life, the best predictor of our children’s likelihood of intermarrying is our zip code. Not our state or county of residence, our zip code. It is the healthy, vibrant neighborhoods where our families have active social lives, a plethora of kosher shops and restaurants, shuls and community organizations that produce healthy, Jewishly committed young adults. Children who grow up in a secure, active observant community will be motivated to embrace a Torah life as adults. When teenagers have vibrant social lives on Shabbat without texting, social media posts, ipods, and online video games, the beauty of Shabbat shines through and our children spend their week looking forward to Shabbat. If summer Shabbat afternoons, or long Friday nights mean hanging around the house with nothing to do and children view Shabbat with dread, the temptation to drop out is elevated.
Yes, there is a moral imperative to buy a home you can afford. Yet, if we define “affordability” as “Monthly Net Income – Full Tuition – Living Expenses = Housing Budget,” how can we sustain and grow our neighborhoods? Will we segment our communities by profession? Hedge fund managers and real estate magnates here, accountants, college professors, and teachers there, with doctors, lawyers, and entrepreneurs in yet a third neighborhood? Will the communities that result be attractive to our children? Will they return after college, or seek to build a similar community with their peers? Or will they be drawn away to less-committed Jewish lifestyles?
The “tuition tax” is about more than making day school affordable, it is about making all the costs associated with Orthodox Jewish living manageable. A better formula for housing budget might be: “If Annual Net Income < 3xTuition Obligation THEN < Monthly Net Income - (Income * tuition %) - Living Expenses = Housing Budget.” In plain English, if a family’s full tuition is more than 33% of net income, then some sliding scale discount is appropriate for that family to have the resources available for the other financial demands of living in the Jewish community.
We need some mechanism for maintaining the broadest access possible to our shuls, day schools, and JCCs. For kosher supermarkets and restaurants to thrive, they need a large population in a concentrated geographic area. For our children to have healthy social lives, they need a large pool of peers in which to find true friends (and eventually spouses).
We cannot afford to demand unfettered “sound financial decision making” from our families. If Orthodox Jewish neighborhoods and day schools become segmented based on income we all lose. Our community is simply too small to risk any further segmentation. Unless we sustain the institutions and communities we have built, we risk a return to the days in the not too distant past when the dropout rate from the Orthodox community was 50% or more.
Shuls and day schools cannot balance their budgets by charging the same fees to everyone. They are dependent on the generosity of members, parents, and foundations with greater financial resources to ensure that a Jewish education and observant lifestyle are accessible to everyone who wants one. One definition of the minimum spread for a financially healthy synagogue is “80% of the revenue comes from 20% of the donors.” Since giving to synagogues comes after paying day-school tuition for families with children, the burden is not quite so disproportionate in the school system, but schools are still dependent on significant fundraising over and above tuition revenue to remain viable.
The inescapable truth is that our high-cost Modern Orthodox Jewish infrastructure is allowing us to achieve unprecedented heights in raising the next generation of Torah-observant Jews. According to the recent Pew Report, the retention rate for Orthodox Jews in the 18–30-year-old age bracket is now at 90%. We cannot ignore our primary mission of maintaining and hopefully improving that success rate as we grapple with ways to pay the bills.
This is where we need to address what Rosenstock describes as the “crisis of character.” Hiding income from the financial aid committee is not a new phenomenon. The response for decades has been to demand ever more detailed accounting from each financial aid applicant. Unfortunately, those who are trying to steal from their friends and neighbors will probably continue to find new ways to lie about and hide their income and disguise their expenses. Most of these thieves probably don’t think of themselves in such blunt terms; they rationalize their actions with excuses like “everyone does it,” or “that is just the way the game is played” and every yeshiva board member’s favorite, “the school has plenty of money anyway.”
This brings us back to the need for our yeshivot to educate the parent body about the true costs of running a school. Cleaning a building every night after 1,000 students and faculty spend the day using restrooms, eating lunch and snacks, doing art projects, and generally making a mess is expensive. Liability insurance costs for any organization that cares for children have skyrocketed in the wake of the abuse claims and settlements related to abuse by priests, rabbis, and teachers. These are just two small examples.
We raise revenue by building partnership and trust with our supporters. We need open communication about the cost structure of running a school. Yavneh, for example, recently sent out a wonderful email with a series of reports detailing its fundraising achievements over the past year. Where is the matching email discussing the rising costs of health insurance, utilities, and building maintenance and how they affect finances? Transparency extends beyond finance to all aspects of governance. For example, rumors of immoral and illegal gender pay gaps continue to afflict our institutions. While it is hard to prove a negative, and directly addressing unfounded rumors is a questionable strategy, some mechanism by which schools and synagogues confirm their compliance with all federal, state, and Jewish laws relating to their operations is needed.
Transparency in finances and governance remains the key to our future success. It continues with an open discussion about the sacrifices young families will need to make if they have limited financial resources. Up to a point, we will insist that they live in a smaller house, drive a less expensive car, eat out less, and take fewer vacations. The price of asking families to sacrifice these amenities and remain in our community (instead of dropping out altogether) is to clearly explain where their money is going. Successfully raising funds from families after their children graduate will only happen if we start to build trust and partnership through transparency and effective communication even before their oldest children enroll.
The question is not “Should there be a tuition tax?” The question is, “What should the tuition tax look like and how can we inspire people to support it?”
By Richard Langer