K12 fundraising fairness

Overcome equity concerns when budget cuts mobilize parents to raise money

The PTA at an elementary school on New York’s Upper East Side raised nearly $1 million in one school year—about $1,260 per student.

In a wealthy suburb of Boston, an elementary school PTA brought in $1,680 per student that same year, while a Washington, D.C., school’s PTA intake totaled $2,220 per student.

These extreme cases point to an issue gaining more attention: the educational inequities that can result from lopsided fundraising.

Auditing the PTA

You need only to Google “PTA embezzlement + arrest” to find stories of accounting gone wrong. When volunteers have control over thousands of dollars or more, it’s important to follow these rules:

PTAs should conduct audits semi-annually or when anyone in control of spending leaves.

The auditor should be impartial and not be the president, a PTA financial officer or anyone authorized to sign checks.

Source: California PTA

Wealthy schools can raise eye-popping amounts that add to the opportunities for well-off students, while the neediest schools struggle to keep up.

In economically diverse districts, this scenario can play out a few miles apart. And though some administrators have tried to address the problem through limits on fundraising or policies that redistribute money raised, the risk of angering parents or deterring potential donors is great.

Earlier this year, for instance, frustrations over a long-standing policy on parent donations in Santa Monica-Malibu USD fueled calls for that district to split into two. Since 2004, a percentage of PTA revenue has gone into a central fund to be redistributed based on a weighted formula.

PTAs and booster clubs are barred from raising money for staffing.

“I think people like local control of their investment” says Dan Ryan, executive director of All Hands Raised, an organization in Portland, Oregon, that collects a portion of parent donations to school foundations and redistributes the money to high-need schools.

Ryan says he often gets calls from districts across the country looking to tackle inequitable fundraising, perhaps with a similar model. “Many of the calls seem to start off really inspired and courageous in their intent, and then they find moving this forward takes a lot of political will.”

Auditing the PTA (cont.)

The auditor should ask for a correction if an error is found in a recorded transaction. Corrections must be listed on the next treasurer’s report.

If members raise financial questions, the president should appoint a committee to look into the concerns.

Source: California PTA

What the numbers say

School fundraising has grown exponentially in recent decades. Revenue from school-supporting nonprofits—PTAs, PTOs, alumni associations, booster clubs, school foundations and local endowments—increased nearly 350 percent from 1995 to 2010, from about $197 million to $880 million, according to a 2014 Indiana University study.

In that same time, the percent of districts with at least one school-supporting nonprofit increased from 12 percent to 29 percent.

Moreover, districts with higher levels of per-pupil state and property tax revenues were more likely to have a school-supporting nonprofit, and districts with higher per-pupil revenues on average see larger donations, the study found.

“Collectively, these findings imply that voluntary contributions do not constitute an efficient or stable substitute for the financing of K12 public education” the study’s authors concluded. “Rather, they serve to enhance spending in school districts that already receive significantly larger per-pupil revenues.”

In 2013-14, the 50 richest PTAs raised nearly $43 million—about 10 percent of the estimated total $425 million raised by all PTAs in the country, according to a 2017 Center for American Progress report.

Researchers found “that few of the districts with the 50 richest PTAs have policies in place to respond to outsized donations to the wealthiest schools.” That report offers a blueprint for districts that are looking to address inequities, including:

creating central funds to redistribute donations to schools with the greatest needs

imposing restrictions on the use of donations

encouraging donations that promote districtwide benefits.

“While implementing these policies can cause political pushback” the report states, “addressing private donations is essential to achieving resource equity.”

‘They came up with a solution’

Portland launched its redistribution model in response to funding cuts. In 1990, voters in Oregon passed Measure 5, which shifted the school funding burden from local property taxes to state funds. The immediate effect was cuts, first to low-hanging fruit like art, music and physical education.

Parents in Portland Public Schools responded with a massive increase in fundraising, particularly at wealthier schools.

“The spike in private fundraising at that time was overwhelming” Ryan says. “The school board took it upon itself to take on this issue, and they came up with a solution.” Portland schools were allowed to form education foundations to raise money for staffing to add back teachers.

After the first $10,000 raised, a third of the money went into a central equity fund.

That money is redistributed to schools, first through grant applications and later through a formula that considers student demographics (such as students living in poverty, students of color and students with limited English proficiency) and finances (including amount of Title I funds received, money raised through the school’s PTA and previous equity fund awards).

In 2015-16, Portland school foundations raised $3.4 million, of which about $1 million went into the equity fund to pay for extra staff members, classroom supplies, field trips, professional development and other resources.

A big shift

In California, the long tradition of private donations for public education goes back to 1978, when voters passed Proposition 13 to limit property taxes.

And as in Portland, districts in Marin County, just north of San Francisco, responded to budget cuts by developing a regional approach to promoting equity through fundraising.

SchoolsRule-Marin, a consortium of education foundations representing the county’s 19 districts, formed in 2011 to draw attention to the decline in school funding during the recession.

“Originally the idea was just to get the message out about the needs of schools” says Trisha Garlock, SchoolsRule board president. “There’s so much noise, now more than ever: Schools need money, schools need money, schools need money. People don’t listen anymore.”

The districts’ foundations still solicit donations from parents, while Schools Rule raises money from local businesses and charitable foundations.

Unlike in Portland, SchoolsRule distributes money on a per-student basis.

Garlock says this method promotes transparency—there should be no question as to why the money goes where it goes—and encourages all foundations to participate in fundraising efforts because the foundations know they will share equally.

At the highest-need districts in the county, SchoolsRule money makes up more than 30 percent of the foundation money raised, she adds.

Marin County districts are also addressing the inequity issue in smaller ways.

About five years ago, officials at the Mill Valley School District recognized inequities in the way their elementary schools were using technology. Each school decided which devices to buy and how to use them, a

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