Milton Hershey School and School Trust

“Family/business relationship several of the board of managers members and officers of the filing organization also serve as directors and officers of business entities that are related to this filing organization. Other than their overlapping service on related company boards, they have no family or business relationships with each other. Please see form 990, schedules j and r for further information. Form 990, part vi, section a, line 4 effective in may, 2018, the board of managers of milton hershey school approved amended articles of incorporation and amended bylaws. While the majority of the revisions were not material but instead represented updating, modernizing, reorganizing, and aligning with current practices, the amended governing documents did the following: (1) incorporated term and age limits for managers (consistent with the 2016 agreement with the regulator); (2)simplified language of the duties and responsibilities of the board consistent with law; (3) modified the notice of meeting provisions; (4) clarified the authority of board committees; and (5) clarified that the corporation has no members. Form 990, part vi, section a, line 7a election of members of governing body the milton hershey school and school trust have a unique, self-perpetuating, interlocking and integrated governance structure. Mr. And mrs. Hershey organized the school in the form of a trust (the "school trust") created under an original 1909 deed of trust that, as amended, still governs the operation of the school. The deed of trust sets forth the respective powers and authorities of the trustee and individual managers of the school and names the hershey trust company ("htc"), a state chartered trust company, as trustee for compensation of no more than $1,000 per year. Under the deed of trust, the trustee is directed to hold title to all school property and all investments and assets that support the school. The individual managers, in turn, are not permitted to hold school assets, but are otherwise generally responsible for managing the school, including with respect to admissions, the program of educating and full-time caring for the children, and employment decisions. As required under the deed of trust, the members of the board of managers of the milton hershey school and school trust are appointed by the trustee from among the trustee's own board of directors. Since mr. Hershey's death in 1945, all of the stock of htc has been owned by the milton hershey school and school trust. The milton hershey school and school trust's 100 percent ownership of the stock of htc has ensured a self-perpetuating, interlocking governance structure for the school because the htc stock carries the right to elect the directors of htc and in turn to appoint the board of managers of the milton hershey school and school trust from among htc's own board of directors. The same nine individuals (as of 7/31/18) serve on the board of directors of htc and the board of managers of the milton hershey school and school trust.”

“Form 990 review process the form 990 is reviewed by milton hershy school and school trust management and by milton hershey school and school trust's independent tax advisor, who signs the return as the "paid preparer." the audit committee of the board of managers reviews and discusses the form 990 at one of its scheduled meetings prior to filing the return with the irs. Additionally, the form 990 is provided to the full board of managers, noting key disclosures, prior to the filing of the form 990 with the irs.”

“Conflict of interest the board of managers of milton hershey school operates under a conflict of interest policy which requires directors to disclose "all actual or potential conflicts of interest" with milton hershey school & school trust or hershey trust company. The conflicts policy cannot be modified or amended without the prior written approval of the pennsylvania office of attorney general ("pa oag"). The milton hershey school's conflict of interest policy is applicable to all school employees and requires the school's officers, managers and supervisors to respond annually to a conflict disclosure survey. All disclosed conflicts are reviewed by the school's conflict of interest committee and any corrective action required as a result of the disclosed conflict is addressed with the employee who made the disclosure and their supervisor. The conflict of interest policy covering officers and other key employees of hershey trust company, trustee for milton hershey school and school trust, is documented in hershey trust company's ethical standards, conflict of interest, and code of conduct sections of its policy manuals. Each manager, director, officer and key employee is required to avoid all activity that could create a conflict of interest or even give an appearance of a conflict of interest. Any conflicts of interest are to be reported as soon as practical after they become aware of such a conflict. Annually, each manager, director, officer and key employee is required to complete an annual statement of disclosure. The forms identify vendors, investments, other board memberships, and family members that could give rise to conflicts of interest. The statements are reviewed by the general counsel of hershey trust company along with the chair of the nominating & governance committee in order for them to be aware of activities that could give rise to conflicts of interest. The results of this review are then documented and shared with the nominating & governance committee and then the full board.”

“Compensation process an independent compensation consultant evaluates and compares the compensation of the officers and key employees of milton hershey school to similarly qualified persons in functionally comparable positions at similarly situated organizations to determine that it is fair and reasonable. This process occurs at regular intervals thereafter, but not less frequently than every five years. The compensation information is reviewed and approved by the board of managers, the governing body of the milton hershey school, who does not have any conflict of interest with respect to the compensation arrangements of the officers and key employees. The review of the compensation of the officers and key employees, including detail on the deliberations and decisions, is contemporaneously documented within the minutes from the board meeting. A file with position descriptions, resumes of officers and key employees, the report of the independent compensation consultant and a copy of the applicable board minutes is maintained by the milton hershey school and school trust. The compensation of the officers and key employees of hershey trust company, trustee of milton hershey school and school trust is determined by periodic review (generally, at least every three years) by third party compensation consultants to determine it is fair and reasonable. The members of the board of managers of milton hershey school do not receive any direct compensation from milton hershey school. The managers receive compensation from hershey trust company as directors of the hershey trust company in accordance with its bylaws and the pennsylvania office of attorney general agreement. Form 990, part vi, section c, line 17 state filing of form 990 the form 990 is not required to be filed in the state of pennsylvania; however, a copy is provided to the pennsylvania office of the attorney general for their review.”

“Public availability of governing documents the deed of trust establishing the milton hershey school trust and the conflict of interest policy are posted on the milton hershey school website. The milton hershey school and school trust has its form 990 posted on another website, guidestar. Included in the 990 are certain financial statement components for review. The form 990 and tax exemption letter are provided to anyone who requests them in accordance with irs regulations.”

“Hershey trust company is listed as an independent contractor. Milton hershey school reimburses hershey trust company for the shared services (compensation and benefits) of certain individuals who perform services for both hershey trust company and milton hershey school. The school trust reimburses hershey trust company for investment services.”

“Milton hershey school & school trust mission milton hershey school began as a dream and vision shared by chocolate magnate milton s. Hershey and his wife, catherine. Unable to have children of their own, milton and catherine hershey used their wealth to establish milton hershey school in 1909, and to this day, the school continues to be guided by the deed of trust that the hershey's signed. For 110 years, the mission of the school has remained the same--to help young people break the cycle of poverty by providing a nurturing home and education to children in need. In the 2017-2018 school year, the milton hershey school provided approximately 2,067 students from low-income families with a cost-free, private, coeducational home and pre-k through 12th-grade education. The school aims to provide each student with amazing opportunities for learning and development inside and outside the classroom. The school uses a whole-child approach to education to nurture and educate students so that they can lead fulfilling and productive lives. Students live in 178 homes across campus, designed to provide safe and supportive environments for 8-12 students of similar ages and the same gender, up until their senior year. The home life program is year-round. Each child is cared for by a married houseparent couple who have child care experience. Houseparents provide guidance, support and discipline. Studnets arriving at milton hershey school often face a variety of difficult challenges beyond the classroom that stem from poverty-related issues. Of new students enrolled during the 2017-2018 school year, fifty-one percent experienced family drug or alcohol misuse, forty-eight percent had mental health issues in their family, forty-one percent are raised by someone other than their biological parents, forty-one percent have a history of family incarceration, and twenty-three percent have experienced neighborhood violence. In response to these challenges, healthy living and personal wellness are an important part of the curriculum at all grade levels, and students receive personalized medical and behavioral care, as well as dental and vision care, at no cost to their families. Student growth and learning is fortified by focusing on intellectual development as well as on emotional, social and spiritual enrichment. The school cares for its students 24 hours a day and operates year-round, including holidays and the summer months. While many schools close down for the summer, students at milton hershey school continue to learn through the school's optional year-round experiences (yre) program. Students who choose to stay on campus during summer break are provided with wide-ranging learning enrichment opportunities both on and off campus, including, for example, participation in a suzuki festival featuring art, music and dance to opportunties to work alongside volunteer firefighters in non-emergency environments. The program is packed with both learning experiences and adventures. Fifty-nine percent of all students participated in yre programming in the 2017-2018 school year. Children at milton hershey school receive a premier education, with small class sizes averaging 15 students. They also have access to career and technical education and extracurricular opportunities unobtainable in their home communities. The school provides children with valuable nurturing relationships and the critical tools they need not only to overcome the circumstances of poverty but to guide them toward success in today's competitive and challenging world. Student test scores are just one indicator of student success at milton hershey school. Students consistently score better than state averages on standardized testing not just among other students who are economically disadvantaged but among all students in pennsylvania and rank exceptionally higher than students from similar socio-economic status. Milton hershey school sets its sights high by adopting the state targets as a”

“This figure includes w-2 forms filed within the tax year: all ancillary roles, part-time internships and work experience for students on campus, positions which have been vacated and filled by another individual within the year, and one-time event workers, for example. Milton hershey school employs approximately 1,200 full-time staff.”

“Program service accomplishments milton hershey school seeks to nurture and educate the "whole child," which means the school and school trust provide for each child in a comprehensive manner - covering the expenses of, but not limited to the following: - the education of students in state-of-the-art classrooms with small class sizes averaging 15 students per classroom - the physical, dental, and psychological care of all students - clothing, food, and room and board - career and technical training, college courses before graduation, visual and performing arts, musical instruction, athletic programs and camps, and environmental and agricultural education often new students who enroll at the school have fallen at least one or two grade levels behind because of factors related to poverty, such as homelessness, family drug and alcohol addiction, mental illness, or neighborhood violence. Of new students enrolled in the 2017-2018 school year, thirty-six percent attended at least three different schools before arriving at milton hershey school. At milton hershey school, students are given psychological and emotional support when needed: close to eighty-one percent of students receive anywhere from one to nine specialty services, eighteen percent receive ten or more services, while less than one percent of students receive none. Despite these challenges, milton hershey school students are resilient and have high potential for success in the schools unique nurturing environment. A strong focus on career and technical education, job shadowing, and hands-on learning through internships, co-ops and apprenticeships helps to prepare students for life beyond milton hershey school. For the past five years, every graduating senior has earned at least two industry-recognized national certifications by passing an industry-approved test. During the 2017-2018 school year, ninety-five percent of graduating seniors earned at least three industry certifications. There are currently eleven career pathways that students are able to pursue, including business/financial management & accounting; law, public safety, & security; computer science; and agricultural & natural resources. In addition to lodging, food, and clothing, each student receives regular medical, vision and dental checkups from the school, as well as any necessary health service or medication. During school year 2017-18, there were 109,735 health service visits by students to the school's medical professionals during the reporting year, in addition to 51,330 dental procedures performed on students. It is not rare to have a high school student arrive at milton hershey school and have their first trip to the dentist be at the campus dental clinic. ------------------- this tuition-free, comprehensive program, including physical care as well as educational programming in academic, home life and community/career settings, has an annual cost of: total program expenses: 214,650,029 less: line 22 depreciation (37,645,206) line 2 grants (6,760,163) -------------- total expenses 170,244,660 including depreciation and continuing education scholarship: total expenses per part ix 284,715,426 less: line 11f investment services (42,173,977) line 24a trust expenses (4,757,009) ------------- total expenses 237,784,440 total number of students: 2,067 237,784,440 (total expenses)/2,067 (total number of students) = 115,038 per student annually. Total number of students: 2,067 214,650,029 (total program expenses)/2,067 (total students) = 103,846 per student annually. Total number of students: 2,067 170,244,660 (total expenses)/2,067 (total number of students) = 82,363 per student annually. A premier boarding school like milton hershey school, offering similar academic programming and small class sizes, charges approximately $60,000 per year, without providing personal effects like clothing, technology, transportation, or career training and internships. Additionally, milton hershey school assumes the cost for”

“Other fees for service this amount is for hospital, medical, and dental services provided for the students.”

“Reconciliation of net assets increase in unrecognized pension service cost $8,371,994”