For-Profit vs Non-Profit International Schools: Does It Matter?

The Two Models

Non-profit schools are governed by a board of trustees or governors. They have no shareholders. Any surplus generated by the school is reinvested, into buildings, equipment, teacher salaries, programmes, or reserves. The board's fiduciary duty is to the school and its community, not to external investors.

Examples: JIS (foundation), BSJ (trust), ISJ (trust), AIS (foundation).

For-profit schools are owned by companies or investment groups. The owner has a financial interest in the school generating profit, or at minimum, a return on capital. This can be a private family business, a publicly listed education company, or a private equity-backed group. The school operates within a corporate structure that includes costs the school does not control: management fees, brand licensing, centralised service charges, and (in some cases) dividend payments.

Examples: NAS Jakarta (Nord Anglia Education, owned by EQT Partners), ACG (part of Inspired Education Group).

The distinction is not always visible from the school gate. Both models can produce good schools. Both can produce bad ones. The difference is in the structural incentives that shape long-term decision-making.

Where the Money Goes

At a typical international school, costs break down roughly as follows:

• 55-70%, Staff costs (salaries, benefits, housing, recruitment, professional development)
• 10-15%, Facilities (maintenance, utilities, campus development, rent/lease)
• 5-10%, Curriculum and resources (textbooks, technology, exam fees, learning materials)
• 5-10%, Administration (finance, admissions, marketing, governance)
• Remainder, Reserves, capital expenditure, or (at for-profit schools) management fees and profit

At a non-profit school, any surplus is held in reserves or reinvested. The board decides where to allocate it, a new building, higher teacher salaries, additional learning support staff, or a technology upgrade. The decision is made by people whose only interest is the school.

At a for-profit school, the surplus is split. Some is reinvested. Some goes to the owner, as profit, management fees, or returns to investors. The split varies. Well-run for-profit schools reinvest heavily. Poorly run ones extract more than they should. The parent has no visibility into this unless the school publishes financial accounts, and most do not.

Teacher Pay

This is where the ownership model has the most direct impact on what happens in the classroom.

Teacher salaries are the largest single cost at any school. The quality of the teaching staff is, more than anything else, determined by what the school can afford to pay. A school that pays well recruits from a deeper pool of experienced, qualified teachers. A school that pays less gets a shallower pool.

Non-profit schools in Jakarta's premium tier pay well. JIS, BSJ and ISJ offer salary packages that attract experienced teachers from the UK, Australia, New Zealand, the US and Canada. These packages include housing allowances, flights, health insurance, and pension contributions. The total cost per teacher is significant, and the quality shows.

For-profit operators face a tension. Staff costs are the biggest lever for improving margins. Reducing average teacher pay, by hiring younger, less experienced staff, or by offering smaller housing and benefit packages, is the most effective way to increase profit. Some for-profit schools manage this tension well and pay competitively. Others do not.

The practical test: ask the school how many of its teachers have more than five years of international teaching experience. Ask about average tenure, how long teachers stay. High turnover is a signal. Teachers leave when the package does not justify the posting.

Jakarta's Landscape

Jakarta's premium schools are predominantly non-profit.

The pattern is not accidental. The schools with the longest histories and strongest reputations in Jakarta, JIS (founded 1951), BSJ (founded 1974), AIS (founded 1996), were established as non-profits by communities of parents and educators. The for-profit entrants are newer to Jakarta and often part of global education groups.

This does not mean for-profit schools are worse. NAS Jakarta benefits from Nord Anglia's global network, which provides access to centralised resources, teacher training through partnerships with institutions like MIT, and a transferable school experience for families moving between Nord Anglia schools worldwide. ACG brings the Inspired Education Group's resources and a New Zealand curriculum heritage that is distinctive in Jakarta.

But the incentive structures are different. And at the margin, in the decisions about whether to hire one more learning support specialist, or fund one more professional development day, or increase the housing allowance to attract a better physics teacher, those incentives matter.

What to Ask

When visiting any school, ask:

• "Is this school for-profit or non-profit?" A straightforward question that many parents never think to ask. The admissions office should answer honestly.
• "Where does surplus revenue go?" At a non-profit, the answer should be specific: reserves, campus development, programme investment. At a for-profit, the answer will be less direct.
• "What is the average teacher tenure?" High turnover (less than 3 years on average) suggests the school struggles to retain experienced staff, often a compensation issue.
• "Does the school publish financial accounts?" Some non-profits publish accounts to their community. For-profit schools almost never do. Transparency is a signal.
• "Who sits on the board?" At a non-profit, the board typically includes parents, alumni, and community leaders. At a for-profit, the board answers to the corporate owner. Both structures can work, but the accountability is different.