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.”

“Election of members of governing body mr. And mrs. Hershey organized the school through the school trust ("the school trust"), created under the 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 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 managers, in turn, are not permitted to hold school trust assets; but, are otherwise generally responsible for managing the school, including with respect to admissions, the program of educating and full-time care of the children, and employment decisions. As required under the deed of trust, the members of the board of managers of the milton hershey school are appointed by the trustee from among the trustees 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 trust. Fourteen individuals (as of 7/31/23) serve on the board of directors of htc and the board of managers of the milton hershey school. Three of these board members were added in january 2023.”

“Form 990 review process the form 990 is reviewed by the organization's management and independent tax advisor, who signs the return as the "paid preparer." the audit committee of the board of managers and the trustee reviews and discusses the form 990 at one of its 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 and 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 do 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 the 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.”

“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 copies of the deed of trust which establishes the milton hershey school and 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 and school trust mission since 1909, milton hershey school (mhs) has transformed the lives of children in need. When the famous chocolatier milton s. Hershey and his wife, catherine, signed the deed of trust, their intentions were clear: to create a home and school where opportunity and hard work meet. More than 114 years later, this intention still rings true. Today, mhs is one of the world's best private schools, where qualifying students in pre-k through 12th grade live on campus and receive an exceptional educational experience-with all costs covered. For the last several school years, mhs adapted its program and work style to ensure the entire school community was safe during the constant unpredictability of a pandemic. During the 2022-2023 school year, mhs seized the opportunity to get back to the basics and reset expectations-all with the intention of winning each day with a positive attitude and strong work ethic. This led to transformational change across campus. Guided by a deed of trust framework, students were able to tie expectations and outcomes to the founders' vision for their home and school. Through this model, students grew their character and leadership skills and found new purpose and connection through community service projects focused on school, country, and god. In keeping with its growth mindset and five-year strategic plan-called the milt plan-mhs reached its largest enrollment since 2019-welcoming 443 new students and hitting a peak school year enrollment of 2,020 in january 2023. The school graduated 218 seniors-bringing the total number of mhs alumni to 11,655. Mhs completed renovations to founders hall, expanded career-focused education opportunities, and grew its connections with community partners and hershey entities-companies also founded by mr. Hershey. To build out the milestones from the previous two years of the milt plan, 2022-2023 also brought significant progress with catherine hershey schools for early learning (chs) and the evoluation of the career and technical education (cte) program at mhs. Chs-the $350-million initiative that will educate hundreds of pennsylvania children at no cost to their families-opened the first center in hershey in october 2023 while breaking ground on a center in harrisburg. As with each chs location, the 47,000-square-foot harrisburg building will feature an innovation studio, stem garden, and family success center. In addition to offering a curriculum designed to enhance students' educational, social, emotional, and cognitive development, chs harrisburg will provide students with nutritious meals, transportation, and other needed supplies. Each chs family will have a dedicated staff member to connect them to housing services, health care referrals, and job training. Chs also announced an expansion into lancaster county that will create three centers-one in lancaster city, new danville, and elizabethtown. The lancaster county chs centers are expected to begin opening in 2026. Meanwhile, chs harrisburg is anticipated to open in 2024; chs middletown in 2025; and chs hershey in october 2023. As part of ongoing efforts to ensure students graduate from mhs and go on to live fulfilling and productive lives, the cte program evolved to help meet the hiring needs of in-demand, family-sustaining careers. The newly constructed d. Michael weller trades center was dedicated in april 2023. It provides space and resources for students in the mhs construction/carpentry career pathway. During the 2022-23 school year, students in the pathway built a tiny house in the trades center which is now available to rent at hersheypark camping resort. Students live at mhs as part of the home life residential program. Each student has a safe and supportive environment to call home under the watchful care, supervision, and support of a married houseparent couple. These experienced and trained adults care for eight-12 students of similar ages and the same gender i”

“Form of organization milton hershey school and school trust is an integrated tax-exempt organization composed of both the not-for-profit corporation, milton hershey school, acting as "managers" under the deed of trust, and the school trust itself. This informational return is required to include the expenses of the organization as a whole, with detail as required by the form instructions. As a result, this return includes all expenses of serving the students enrolled in the school and scholarship costs for alumni pursuing continuing education, as well as the costs associated with administering the investments held in the school trust.”

“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 1,550 full-time staff.”

“Program service accomplishments milton hershey school seeks to nurture and educate the whole child, which means the school provides 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, medical, 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 agricultural and environmental 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. At milton hershey school, students are given psychological and emotional support when needed. More than half of all new students enrolled during the 2022-2023 school year experienced three or more adverse childhood experiences (aces), and ninety-four percent experienced one or more stressors. Despite these challenges, milton hershey school students are resilient and have high potential for success in the school's unique nurturing environment. In addition to housing, 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 2022-2023, there were 25,467 nurse and pediatrician visits in school clinics and in mhs health center treatment rooms, in addition to 53,000 dental procedures performed on students. A strong focus on career and technical education, job shadowing, and hands-on learning through internships, co-ops, and pre-apprenticeships helps to prepare students for life beyond milton hershey school. Students in all grade levels, including elementary students, are exposed to age- and grade-appropriate career and technical education. Young learners start with hands-on activities and guest speakers while high school students complete internships and accredited industry certifications. There are currently 12 career pathways that students are able to pursue, including: business/financial management & accounting; law, public safety, & security; computer science & innovation; agriculture & natural resources; and education & human services. ------------------- 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: 277,835,440 less: line 22 depreciation (41,936,407) line 2 grants (5,103,468) -------------- total expenses 230,795,565 total number of students: 2,020 gaap cost per student - total expenses (part ix line 25) $369,033,710 (total expenses/2,020) = $182,690 total annual cost per student- school and trust total program expenses less depreciation (part ix line 22) and ces grants (part ix line 2) $230,795,565 (total expenses)/2,020 (total number of students) = $114,255 mhs direct cost per student - school only a premier boarding school like milton hershey school, the annual investment of more than $115,000 per student includes holistic care, education resources, graduate programs, and more. Milton hershey school assumes the cost for medical, psychological, dental, orthodontic, social work, and prescription care for each student. Costs at most private colleges also exceed this figure.”

“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 $16,676,417 capital contribution to chs (56,658,009) ________________ other changes in net assets $(39,981,592)”