Charitable Giving Does Not Close Charter School Funding Gaps

Commentary

Charitable Giving Does Not Close Charter School Funding Gaps

Over the past decade the Department of Education Reform at the University of Arkansas has conducted several studies focused on economics within the education system. Their research teams’ latest national study in the Charter School Funding series revealed that charter schools received a total of $3,814 less in total per-pupil revenues compared to traditional public schools (TPS). This 28.4 percent funding gap has increased from 20 percent only eight years earlier.

In an effort to investigate that funding gap further and create a transparent, unbiased comparison of funding for these two sectors, the Department of Education Reform published Buckets of Water into the Ocean: Non-Public Revenue in Public Charter and Traditional Public Schools. As charter school conversation has increased dramatically in recent years, they constructed the first in-depth school funding study with concrete data on the categories of non-public revenues in the charter and TPS sectors to reveal how they vary between schools and states.

Non-public revenue refers to funds that come from private and non-profit sources, not from any level of government. The study analyzed 15 states with the appropriate financial documentation specific enough to assign non-public revenue to particular categories. Researchers disaggregated the funds into nine categories: non-public food service, investment revenue, non-public tuition, non-public transportation, program revenue, rental revenue, enterprise/community service, miscellaneous revenue, and philanthropic funds and fundraising.

According to the study, both TPS and public charters receive the vast majority of their revenue from public sources. The authors point out that the difference in funding laws for charters and TPS is what makes it possible for these two forms of public schools to receive different amounts of funding to educate their students, which directly generates the per-pupil inequity.

The Department of Education Reform’s five main findings reveal significant discrepancies in the non-public revenues for charter schools and TPS to consider in efforts to mend the funding gap:

  1. TPS and charters receive mass amounts of non-public revenue in raw dollars: almost $6.4 billion for the TPS and nearly $400 million for the public charter schools in the 15 states in their sample alone.
  2. Non-public revenues on a per-pupil basis vary by state, 12 of the 15 states reported more revenues for public charter schools in the sample.
  3. TPS receive most of their non-public revenues from food service and investment revenue, 32 percent and 13 percent, respectively. Charter public schools receive 46 percent of their non-public revenues from philanthropy.
  4. However, philanthropic revenue varies within the charter school sector. Only one-third of the charter students in the study receive nearly 95 percent of all recorded charter school philanthropy and 34 percent of charter schools in the study report no philanthropic support of any kind.
  5. While charitable funds from philanthropies make up almost half of the non-public revenue in the charter sector, they only account for 2.5 percent of total charter revenues, nationally, and therefore cannot be expected to close the 21.7 percent total funding gap between charters and TPS in these sampled states.

Charter schools still do more with less even accounting for charitable giving and significant changes will have to be made in public school funding laws in many states to make funding for children in public charter schools equitable to their peers in TPS. Read the Department of Education Reform’s full study, here.