The Changing Face of School Funding

The world of K-12 education is in great flux right now.

Thousands of independent schools are struggling with tuition levels that continue to outpace inflation and are now beyond the means of virtually all but the wealthiest families (by some measures, less than .5% of the population can afford a private school education).  These schools are increasingly turning to fundraising to balance their budgets but are finding it difficult to increase philanthropy at even the same rates that they are increasing tuition.

There are also charter schools, new public schools that are granted autonomy to make their own educational decisions, in exchange for accountability.  Some of these schools, especially those in my home state of Massachusetts, are doing quite well.  Virtually all of these schools raise additional dollars to supplement their public funding.  But since their students are typically from low-income, inner city households, they aren’t able to raise these additional funds from the local school community.  Instead, they have typically built donor bases from the surrounding suburban and business communities.  There are thousands of these schools and some have been extraordinarily successful such as the 120+ KIPP schools (Knowledge Is Power Program) which raises hundreds of millions of dollars per year, and is growing at 20% per year.

Finally there are public schools that have been hard hit by budget cuts in their local communities.  Historically only the more prominent exam and magnet schools, like Boston Latin School and New York’s Stuyvesant raised outside funds, but now, most schools are looking towards philanthropy to help make ends meet.

Last week Blackbaud released K-12 edition of the Index of Charitable Giving which despite these tough times shows that K-12 charitable giving is up 3.1% for the most recent 3 month period.  For comparison, the overall charitable giving index, for the same period, is down 3.1%. This is the second month in a row that giving is down year over year reflecting the difficulty that nonprofits are continuing to have finding donors to support their programs.

Schools are successfully finding donors to supplement school budgets.  One potential reason is that the wealthier families, whose children disproportionately attend private schools, are not being impacted as much by the current economic climate and are still willing to provide additional funds for their children’s education.

What factors have you seen influence fundraising for our nation’s schools?