The Quiet Deficit — Ḥeshbon

The apparent contradiction

Everyone knows which schools have been closing. That is exactly the problem.

The closures are a matter of record. The Solomon Schechter network fell from 63 schools to 41 in fourteen years. A merged school in Rhode Island filed for receivership. Gerrard Berman in New Jersey closed after 36 years. MetroWest in Massachusetts announced its closing after 25.

Read that list and an obvious conclusion presents itself. The Conservative and pluralistic community schools are the fragile ones. The Orthodox schools, which have generally held their enrollment, are fine.

The conclusion is obvious, and it does not follow. It treats a school closing as evidence of the worst financial condition in the field. Those are different claims. A school closes when it runs out of students, or out of patience, or out of lenders. A school is fragile when it cannot absorb a bad year. An institution can be fragile for a long time without closing. The ones that close are simply the ones whose particular failure became visible.

So the question worth asking is not which schools have closed. It is which schools could not survive a shock — and whether those are the same schools at all.

Why the obvious measure fails

Two households, same overdraft, different lives.

Two families each spend three hundred dollars more than they earn this month. On the bank statement they are identical. Same gap, same red number, same shortfall.

One has eight months of savings and made the decision on purpose — a planned draw, for a roof or a tuition bill. The other has nineteen days of savings and no plan, and closed the gap by not paying somebody.

Calling both of these "running a deficit" is technically correct and practically useless. It is also, almost exactly, how the Jewish day school field talks about its own finances.

A funded deficit

A choice

Governed, bounded, and backed by a reserve someone can actually draw on. This is what endowments exist to do.

An unfunded deficit

A condition

The same number on the same line, with nothing behind it. It gets absorbed somewhere the accounts do not show.

Getting the term straight

Nearly every private school spends more than tuition brings in. That is the model, not the crisis.

The phrase "we're running a deficit" does most of its damage by being ambiguous. Usually it means the ordinary, expected gap between what families pay and what the school spends — a gap essentially every independent school in North America closes each year through fundraising. That gap is the business model. Closing it is what a development office is for.

This story uses a stricter measure throughout.

Operating deficit A school's total income for the year — tuition, fundraising, investment income used for operations, everything — falling short of what it spent that year. Not the gap before fundraising. The gap after.

By that standard a deficit is no longer routine. It means the school came up short even after the appeal, the gala, the grants and the draw. Measured that way, the three groups separate immediately.

How often schools run shortShare of school-years

01 — The baseline

Running short is normal. It happens to more than a third of schools.

Across 1,874 school-years at comparison independent schools, 36.9% ended in a true operating deficit. Not a tuition gap. An actual shortfall after everything was counted.

That is the number to hold onto. Whatever follows has to be judged against a field where running short is a normal event, not a scandal.

02 — Barely a gap

Non-Orthodox Jewish schools sit close to the field.

They run short in 42.6% of years. Six points above the comparison group. Noticeable, and not on its own alarming.

If the closure record were tracking financial condition, this is where the alarm should be loudest. It isn't.

03 — The outlier

Orthodox day schools run short two years in three.

65.2% of observed school-years ended in an operating deficit. The average Orthodox school-year in this sample was in deficit, not merely at break-even.

These are the schools generally described as holding their enrollment while others struggle. On this measure they are the furthest from stable in the dataset.

04 — Incidence is the wrong question

One bad year is an event. Every year is a condition.

So the measure changes. Among schools observed for two or more years, how many were in deficit every single year?

Comparison schools, 13.2%. Non-Orthodox, 18.0%. Orthodox, 42.9% — and not one Orthodox school in that subsample had a clean record.

05 — The measure that matters

Now ask what is behind the shortfall.

This is the household question. A deficit is survivable if there is a reserve to draw on, and something else entirely if there isn't. So among schools actually running a deficit, how many months of expenses does the endowment cover?

Comparison schools hold about 5.2 months. Non-Orthodox schools hold 6.6.

06 — Nineteen days

The Orthodox median is measured in weeks.

Roughly 19 days of operating expenses. And across the deficit-years with usable data, the share where a school drew enough from endowment to cover that year's shortfall was zero.

Comparison schools did so in 17.8% of their deficit-years. Non-Orthodox schools in 30.2%. The mechanism the rest of the sector uses to absorb a bad year is, in this segment, essentially absent.

07 — Holding the obvious constant

It isn't that they're small, or southern, or unlucky.

Small schools run deficits more often. Regions differ. Some years are worse than others. A statistical model can hold those constant — comparing schools of similar size, in similar places, in the same year — so that what is left is the difference associated with being an Orthodox day school in particular.

What "significant" means here That a result this large is unlikely to be an accident of which schools happened to be in the sample. It says nothing about how big the effect is. Only that it is probably real.

Even with size, region and year held constant, Orthodox schools carry roughly 3.3 to 4.1 times the odds of running a deficit. Two different model types agree, and both clear the significance bar.

The move this data forces

Two crises wearing one name.

Put the closure record and the balance sheets side by side and the tension resolves. But only by giving up the idea that the field has a single affordability problem.

The schools that closed mostly ran out of students. Non-Orthodox enrollment fell more than 16% over two decades, and a school with a fixed-cost structure and a shrinking applicant pool eventually becomes unviable no matter how well it manages its margin. That is a demand problem. It ends visibly, in a board vote and a press release.

The Orthodox schools have the opposite profile. Communal norms around universal day-school attendance keep the seats full, and tuition is priced below what delivery costs — deliberately, as an affordability choice the field has long defended. But the resulting gap is not being closed by a funded reserve. It is absorbed somewhere this data cannot see: debt, deferred payables, emergency communal fundraising. None of that appears in benchmarking data. None of it is indefinitely sustainable.

Threat one

An enrollment problem

A shrinking pool against a fixed-cost model. Ends in closures and mergers, publicly and on the record.

Concentrated in non-Orthodox & pluralistic schools

Threat two

A balance-sheet problem

Full seats, structural shortfall, no cushion. Ends in nothing visible at all — which is why it has gone uncounted.

Concentrated in Orthodox schools

Why the distinction has consequences

The money is aimed at the first problem.

Communal philanthropy has answered the affordability crisis with tuition subsidy and financial aid. The $100 million Lainer fund in Los Angeles. UJA-Federation of New York's $51 million challenge fund. The Mandel Foundation's $90 million in Cleveland. Toronto's Generations Trust. Nearly all of it is structured to lower what families pay.

Against an enrollment problem, that is the right instrument. It makes the school affordable to more families and defends the applicant pool. Against a balance-sheet problem it is close to beside the point. Orthodox day schools already post the lowest net tuition per pupil in this data. Their difficulty is not that families are paying too much. It is that nothing sits behind the gap.

What that segment lacks is the boring thing. Reserves. Endowment capacity, operating cushion, the institutional ability to lose a year without borrowing against the next one — precisely the category of giving the field's major initiatives have mostly declined to fund.

What this cannot tell you

Four limits worth carrying with the finding.

A small Orthodox sample

The Orthodox results rest on 12–18 schools depending on the analysis, against 647–786 comparison schools. The direction holds across four independent measures. Any single magnitude should be held loosely.

Voluntary, unaudited data

Benchmarking submissions are self-reported and not independently audited here. Schools least able to participate in national benchmarking are likely underrepresented — which, if anything, understates the problem.

No view of debt

The data has essentially no coverage of borrowing, credit lines or deferred payables. Those are the most likely mechanisms absorbing an unfunded deficit, and they are invisible here. The endowment measure is a floor on resilience, not a full accounting.

Four years, and unusual ones

The panel begins in 2022–23 and covers a period of broad strain across Jewish institutions after October 7, 2023. It cannot separate a long-running structural condition from a response to that period.

Source & method. Financial and enrollment data submitted to NAIS, Prizmah and SAIS, 2022–23 through 2025–26; 2,059 screened school-years across 887 classified schools. A deficit is total operating income below total operating expenses. Odds come from logistic models holding region, year and log enrollment constant, estimated two ways — cluster-robust and mixed-effects — which agree in direction and significance. The mixed-effects model was fit by variational approximation rather than exact maximum likelihood; replication by the standard method is warranted before publication. From Deficit Spending in Jewish Day Schools: Prevalence, Financing Mechanisms, and the Question of Existential Risk, Gavriel Brown, PhD — white paper, July 2026.

Ḥeshbon — Center on Data and Jewish Life

A data project on how Jewish life is paid for. The work comes in seasons. This page is part of Season 1 — Jewish Education. It states its own sources, sample sizes and limits.

Ahead: Season 2 — Household Affordability · Season 3 — Federation & Charitable Giving

More in Season 1

Working prototype. Every figure comes from the underlying research. Where a chart simplifies a published result, the page says so. Nothing here audits an individual school.