Independent schools are beginning to consider new sources of non-tuition revenue, and one of the most popular is external facility rentals. Research shows that on average tuition revenue only accounts 82% of an independent school’s annual operating income (2014-2015 NBOA Business Office Survey).
Summer camps and enrichment programs can help an institution expose their brand to non-students, while also generating meaningful revenue. Some schools are renting their facilities to external groups year-round and recouping the costs associated with hosting these events.
Are you considering renting your facilities to outside groups? Here are a few things to consider before you begin renting your facilities:
- Does renting your schools facilities support your school’s educational purpose?
- Does your rental fee include the operating, maintenance and utility expenses associated with the event(s)?
- Could your school be subject to unrelated business income tax (UBIT)
A good facility rental contract is key to protecting your school and minimizing the risk associated with facilities rentals. NBOA and Christopher M. Fallon, an independent school attorney with Liebert Cassidy Whitmore, have created a list of key terms every facility rental contract
should must have:
- Dates, times and area of campus
- Payment provisions
- Repairs, maintenance and utilities
- Damages to premises
- Damages to lessee’s property
To hear more about how your peers are generating non-tuition revenue with facilities rentals, watch this video featuring David Marcus with de Toledo High School in California. de Toldeo generated about $80,000 per year in revenue from its rental program!
Income Property: The Fine Print on Facilities Rentals, Net Assets May/June 2016, NBOA, Donna Davis, http://online.qmags.com/NA0516/default.aspx?pg=40&mode=2#pg40&mode2.