Mike,
Depreciation in a non-profit context is a little odd, and what you do sort of depends on how you fund your capital improvements. In one sense depreciation is a "stand in" for necessary capital expenditures (though the correlation is uncertain). To that end, we fund all capital spending with initiation fees and contributions, and so we take depreciation out of our operating resultsou need to spend (though it doesn't necessarily correlate to that). We basically ignore depreciation, but keep a separate capital spending plan (again, funded by capital collections rather than dues and other operating revenue), to know what we will need, which again is a substitute.
This is sort of in line with the idea that for a non-profit, cash is what matters, not accounting. If you show a huge loss because of depreciation, but your cash position never gets below a certain very nice cushion, who cares about an accounting loss? Again, that presumes that you can fund your capital expenditures out of non-operating funds, or your good cash position is after accounting for capital improvements.
On the bigger picture, course improvements are capital expenditures as someone said, but how to fund them is a political/marketing issue, not really accounting.
Jeff