Association of Lutheran High Schools caught in financial crisis
The story has become all too common over the past year: A mortgage taken out in greener times with rising income expectations is now proving difficult to repay in a faltering economy.
This time it’s the Association of Lutheran High Schools of Greater Milwaukee caught between past deficit spending and a $27 million debt that threatens the operations of its three area schools.
But the school association has been given a second chance in the form of an anonymous donor offering $3 million if the association is able to raise another $6 million by the end of February. So far, the school has raised over $4.1 million toward its goal.
“We’re in good shape, we’re not in crisis at all, but we have too much debt and we need to reduce it,” said Todd Moritz, the association’s chief executive, despite fundraising fliers announcing the fundraising campaign that warn of possible payment defaults.
“We’re going to be successful one way or another,” he said, “but if we raise $6 million, we’ll be much more successful.”
The association attributes his situation to multiple factors. The most important is the construction of the new Lake Country Lutheran Secondary School at Hartland, which opened a year ago without sufficient initial funding before an economic downturn affected individual and church giving and triggered a surge in requests for financial aid, Moritz said. .
The school opened as a western suburban complement to the association’s two established high schools, Martin Luther in Greendale and Milwaukee Lutheran.
Other private schools in the area have also run into trouble in recent years after building projects that anticipated enrollment growth.
Heritage Christian Schools, which borrowed nearly $9 million for the expansion of its West Allis High School several years ago, reached out to parents for help. raise $710,000 end of June to finance its operating expenses. St. Luke’s Parish School in Brookfield closed its doors last year, citing declining enrollment and growing reliance on church support, just years after launching a renovation campaign.
Most private schools rely on fundraising, rather than their operating budgets, to pay for their buildings. But mortgage payments don’t go down when charitable contributions go down.
Registrations are falling
Meanwhile, private school enrollment also declined statewide. According to recently released figures from the state Department of Public Instruction, private school enrollment in Wisconsin was 5.4% lower for the current school year compared to the 2007-2008 school year. .
A private school can survive such setbacks and even take care of its facilities with good financial management, said Lisa Kamprath, board member of Grace Lutheran School in Oak Creek. Even though Lutheran Grace With nearly half the students it once had, the school recently celebrated the opening of a 5,000-foot addition that now means its 59 students have their own music room in addition to a new library. and separate lunch and gym facilities.
The school was able to do all of this thanks to a $125,000 donation that was combined with money from a previous church fundraising campaign and a mortgage refinance that lowered monthly payments, Kamprath said.
“Are we having a hard time? Yeah, we’re having a hard time,” she said. “But, compared to what other schools are going through, for some reason Grace doesn’t face the same challenges as other schools.”
This is especially true of the Association of Lutheran High Schools, where Kamprath hopes to send his children and has already donated to the fundraising campaign.
Despite what the association has called the biggest crisis in its history, parents like Val Sonderman are optimistic the campaign will succeed.
Along with all of the association’s school alumni — which include the more established Martin Luther and Milwaukee Lutheran High Schools — Sonderman said she sees fundraising as “totally doable.”
“It’s kind of like David and Goliath, but it will work,” said Sonderman, who has two children in Lake Country Lutheran.