Wealthy Qld Private Schools Rake in Millions in Donations

The wealthiest most exclusive private schools in Queensland are raking in millions of dollars in donations and investment income. These millions are ignored in assessing the need for government funding. It exposes a major flaw in how private schools are funded. The flaw means the schools are massively over-funded by the taxpayer. Funding of private schools must be overhauled.

New figures obtained from the Australian Charities and Not-for-profits Commission (ACNC) show that 23 Queensland private schools received $118 million in donations and investment income over five years from 2017 to 2021 (see table below). Donations totalled $84 million and investment income was $34 million. Just nine schools received $83 million over the period. The average income from these sources for the 23 schools was $5 million per school over the five years.

Queensland’s most exclusive, high fee school, Brisbane Grammar, raked in the most donations and investment income at $20 million over the five years, comprising $12.4 million in donations and $7.6 million in investment income. One former student donated $2.8 million in 2019.

Ormiston College collected $13.2 million ($12.8 million in donations and $0.4 million in investment income). Anglican Church Grammar (Churchie) raked in $11.7 million ($10.4 million in donations and $1.3 million in investment income).

Four schools belonging to the Presbyterian and Methodist Schools Association collected a total of $20.9 million comprised of $9.9 million in donations and $10.9 million in investment income. The four schools are Brisbane Boys College, Clayfield College, Somerville House and Sunshine Coast Grammar.

Other schools with multi-million donations and investment income include Sheldon College $8.7 million, All Saints Anglican School $8.5 million and Brisbane Girls Grammar $6.9 million.

Donations and investment income of these wealthy exclusive schools dwarf other private income of public schools. The average donations and other income of Queensland public schools in 2020 was $250 per student. By contrast, the donations and investment income of Brisbane Grammar averaged $2,539 per student.

These 23 private schools also received $290 million in funding by the Commonwealth and Queensland governments in 2020. This funding was determined without regard to their donations and investment income.

Under the current Commonwealth funding method, private school funding is determined by the capacity of families to pay fees. This is measured by the adjusted taxable income of families as reported by the Australian Taxation Office. It ignores other very lucrative sources of income for private schools such as donations and investment income.

These schools raise additional funds through multiple tax-exempt organizations such as foundations, building funds, scholarship funds and others. The donations also reduce the tax burden of the donors, so even more money goes to private, not public benefit.

The failure to include donations and investment income in determining Commonwealth funding of private schools is a major flaw in the current funding model. It results in over-estimation of the financial need of private schools and massive over-funding by the taxpayer. However, it is not sufficient to just include other school income in determining the financial need of private schools because there are other major flaws in the model.

A major flaw is the assumption that the parents of students pay the school fees and other charges. This is demonstrably untrue. Many private school students have their fees at least partly paid by their grandparents. The funding model also ignores other income provided by grandparents such as money for house renovations, household assets such as whitegoods, furniture and IT equipment, cars, holidays and medical expenses that free up family income to be spent on school fees. Over 50% of parents help their adult children with a variety of expenses including school fees. The Bank of Mum and Dad is reputed to be the 9th largest home lender in Australia. As a result of this direct and indirect financial support for families, which is not recorded in adjusted taxable income, the capacity of private school parents to pay school fees is vastly under-estimated and private schools are consequently massively over-funded by taxpayers.

Even apart from these flaws, the current funding model is over-funding many wealthy schools according to its own criteria. Private schools are supposed to be funded at 80% of their Schooling Resource Standard (SRS) by the Commonwealth Government and the remaining 20% by the Queensland Government. However, many of these exclusive schools are already hugely over-funded by the Commonwealth. For example, Brisbane Grammar and St. Margaret’s School was funded at 133% of its SRS in 2022 by the Commonwealth instead of 80%, Brisbane Girls Grammar at 120%, Ormiston College and All Saints Anglican School at 91% and Sheldon College at 88%. The four schools belonging to the Presbyterian and Methodist Schools association were funded at 101% of their SRS.

The over-funding of Brisbane Grammar amounted to $3 million in 2022, Brisbane Girls Grammar $1.9 million, All Saints Anglican School $1.8 million, Ormiston College $1,2 million and Sheldon College $0.9 million. The Presbyterian and Methodist schools were over-funded b $5.4 million.

The total over-funding for 17 of these private schools was $28.5 million. Figures for the other six schools including Anglican Church Grammar could not be obtained.

The current funding model for private schools needs a complete overhaul. The Commonwealth Government’s funding model purports to assess the financial need of schools for taxpayer funding but it ignores millions of dollars in donations and investment income received by private schools and additional income provided to families by grandparents of children in private schools. It is a highly inequitable funding system. It unfairly over-funds private schools while massively under-funding public schools.

A new system should be governed by the principle that government funding for private schools should only fill the gap between private income and a revised SRS. The base SRS should be set as the cost of highly successful public schools with minimum disadvantage. Funding for private schools should be conditional on meeting social obligations and education standards. Private schools whose private income is above the SRS should not receive government funding because it extends their resource advantage over public schools. A significant first step towards this model would be to end all government funding for wealthy, exclusive high fee private schools. They don’t need taxpayer funding. It is a complete waste and simply adds to their huge resource advantaged over public schools. It is funding that would be better used to support disadvantaged students and schools where additional funding will have much greater impact on improving education outcomes than the taxpayer money being squandered on wealthy schools

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