Exeter Endowment Explained
By SARAH HAO, LYDIA KUHNERT, ANNA OSADCHAYA, DIYA SANDEEP, and MARVIN SHIM
When John and Elizabeth Phillips founded the institution of Phillips Exeter Academy in 1781, they did so with the understanding that educating students in “goodness and knowledge” is essential for the youth in their teenage period. Exeter was established with founding documents that predate the U.S. Constitution, and a teacher by trade, John Phillips firmly believed in giving back to his community.
Thus, on May 17, the Phillipses signed the Deed of Gift that inaugurated the academy “for the purpose of promoting piety and virtue; and for the education of Youth.” The Phillipses contributed their land and financial resources to make this institution possible, and with an endowment of $1.5 billion, Exeter carries their founding vision into the future. Collectively, the endowment’s 1500 individual funds reflect a century-long tradition of philanthropy sustained through the generosity of Exeter’s alumni, beginning with the Christmas Fund over 100 years ago.
“Alumni have made contributions to support the school and to make sure an Exeter education is accessible to those who cannot afford to pay,” alumna Morgan Dudley ‘77, the Director of Institutional Advancement, said. “Gifts ranging from $1.00 to millions of dollars are given to support our annual operating expenses—particularly our outstanding faculty and staff, specific academic and extracurricular programs, to construct new buildings and renovate existing buildings, and to add to the school’s endowment to ensure a strong and stable future.”
In Exeter’s 2023 fiscal year, the endowment provided more than half of the Academy’s revenue, considerably more than the net tuition.
“Every donor’s motivation is unique, based on personal experience,” Dudley continued. “At the same time, the common thread among those who support the Academy is gratitude. Gratitude for the education, for the outstanding faculty whom they remember and appreciate, for the staff who cared for them in the dining hall, the health and wellness center, in their dormitories, on the grounds, for the lifelong friendships made here, and for the experience of being part of this community.”
“We are an excellent institution and there are a lot of people who believe in us. They believe that this was a transformational experience of their lives, and they express their gratitude by giving,” said Director of Principal and Major Gifts Aaron Peters.
Moreover, all these funds have different purposes, established in conversation between the donor and the Academy. “In any contract, there is a conversation. We might advise them to broaden or change some categories, and we might need to change the terms for the best interest of the Academy and the donor. Presumably the donor gives to see the money in action, not to see it sitting there,” Peters said.
Exeter’s immediate priorities include Financial Aid, Academic Excellence, Equity and Inclusion, and Health and Wellness, to which donors can designate their gifts. “Financial aid is a priority for many of our donors, as Exonians want to make sure the opportunity to come to Exeter, which meant so much to them, is available to all students with the qualifications and ambition to attend, regardless of their ability to pay,” Dudley explained. “Every student, every employee, every athletic team, performance, academic program, and every building on campus benefits from the generosity of our alumni, parents, faculty, staff and friends.”
“The actual cost to educate a student here is around $120,000. It’s philanthropy and endowment that helps reduce the cost. This pays teachers’ salaries, Global Initiatives, maintenance of dorms and buildings, the books in the library, among other things. It pays for a lot of different things on campus that if it didn’t we’d need to charge students for,” Peters clarified, “The amazing thing about Exeter is that each class has twelve students, in comparison to one big lecture hall and one teacher.”
“Funding to become need-blind in admissions is a premier example of the impact of philanthropy - a number of alumni and parents made significant gifts to our endowment for financial aid to make it possible for Exeter to admit students without regard for their families’ ability to pay,” said Dudley. “When Exeter was founded in 1781, the school was free, and the Academy has supported students with financial need ever since… …every student at Exeter benefits from the generosity of those who came before them: the cost per student far exceeds the full cost to attend the Academy. In that sense, 100% of our students benefit from philanthropy and the generosity of prior generations of Exonians.”
Furthermore, Exeter allocates its capital to investment, focusing on long-term return generation for the perpetuity of the endowment gifts. “It’s the tower of compound interest. The endowment has been invested really well over time. We continue to be a place that provides excellent education and a transformational educational experience. They want to see that perpetuated and ensure that the next generation can take advantage of that,” Peters continued.
“Exeter’s investment staff, led by Director of Investments Justin Merrill, hires and monitors managers who invest the endowment in a broad range of markets, companies, geographies, and asset types… … [in Institutional Advancement (IA)] our work is largely off campus and behind the scenes, but over the past 10 years IA has raised over $400 million on behalf of the Academy. Conversations about gifts at the highest level always include Principal Rawson, whose vision for the Academy has inspired transformational support. The partnership between the Principal and the IA team at Exeter is essential to our success, and a hallmark of our work on behalf of the Academy,” Dudley stated.
“The Deed of Gift is our North Star. Nearly 250 years ago, our founders established the Academy with the commitment to unite knowledge and goodness, to educate youth from every quarter, and to inspire Exeter’s students to pursue lives of purpose and meaning through service to others—non sibi,” said Dudley. “The relationships we build, the conversations we have with donors, and the commitments we secure are all inspired by those foundational principles. Exeter simply could not exist without the extraordinary support of our community around the world.”