SOURCE: University of Arkansas

University of Arkansas

June 17, 2015 09:00 ET

Philanthropic, Non-Public Funds for Charters Do Not Close Revenue Gap With Traditional Schools

First-Of-Its-Kind Research Reveals That Even With Philanthropic Giving, a More Than $2,700 Per-Student Funding Gap Remains

FAYETTEVILLE, AR--(Marketwired - June 17, 2015) - A research team at the University of Arkansas today released a new, first-of-its-kind school funding report which revealed that in 15 states, traditional public schools received nearly $6.4 billion and charters $379 million in non-public revenues. However, non-public revenue for both was insignificant compared to public sources of funding and only slightly narrowed the overall funding gap. In fact, even when including philanthropic resources, traditional public schools in these 15 states alone still received $2,706 more per pupil than charters.

"Buckets of Water into the Ocean: Non-Public Revenue in Public Charter and Traditional Public Schools" explored funding in states with both substantial charter school sectors and reliable data. It revealed that while about one-third of non-public revenue for traditional public schools came from food service and at least 13% from investment revenue, philanthropic giving made up almost half of the non-public revenue that charter schools received, and 5% for traditional public schools. In the 15 states analyzed in the study, all non-public revenue made up 2.6% of total revenue for traditional public schools and 5.3% for charters, the report showed.

But the report also found that philanthropy in general is such a small slice of total K-12 education funding that it cannot be relied upon to close the funding gap between traditional and public charter schools. In total public and non-public revenues, traditional public schools received $13,628 per pupil while charters received $10,922, mainly due to disparities in access to public revenues.

"The source of disparity in funding continues to remain a largely uninformed public policy issue. Traditional public schools reap the benefit of larger account balances that generate more investment income than charter schools can generate," said Larry Maloney, lead researcher of the University of Arkansas team. "Since charter schools receive less overall funding from public sources, more of their funding must be used in any given year."

"Significant changes will have to be made in the school funding laws in many states since private philanthropy alone can't close the funding gap between traditional public schools and public charter schools in the U.S., contrary to widespread perception," Maloney added.

The researchers had five key findings, which include:

  • Public schools receive large sums of money from non-public sources: nearly $6.4 billion for traditional public schools and $379 million for the public charter schools in the 15 states included in the study;
  • Twelve of the 15 states analyzed reported more per-pupil non-public revenue for public charter schools than for traditional public schools;
  • Traditional public schools receive most of their non-public revenue from food service and investment revenue and about 5% from philanthropy, while charter schools receive most of theirs-nearly half-from philanthropy;
  • Philanthropy is not evenly distributed across all charter schools, with 34% of charter schools in the study reporting no philanthropic support of any kind and 95% of all charter school philanthropy directed at schools that enrolled just one-third of the charter students in the 15 states.
  • Although charitable funds from philanthropies make up almost half of the non-public revenue in the charter sector, they account for only 2.5% of total charter revenues nationally and therefore cannot be expected to close the growing 28.4% total funding gap between charters and traditional public schools.

The traditional public school sector gets a larger share of philanthropic funds than the charter school sector, but it translates into less in per-pupil funding because of the larger student enrollments at district schools. Charters received about $173 million from charitable organizations, which translated into $264 per pupil, while traditional public schools received more, $331 million, translating to $18 per pupil. This means philanthropy only contributed $246 toward closing the significant per-pupil funding gap between traditional public schools and public charter schools in these 15 states.

The report comes one year after the research team at the University of Arkansas published the third in a series of national studies on the general lack of equity in the funding of public charters compared to traditional public schools. "Charter School Funding: Inequity Expands" analyzed local, state, federal and private funding sources for 30 states and 48 major cities, revealing that public charter schools receive on average $3,814 less per pupil than traditional public schools. The funding disparity had increased by 54.5% over the previous eight years and was even greater in major urban areas with significant charter school enrollment.

In the 48 major urban areas included in that report, the funding disparity was even greater, with traditional public schools receiving on average $4,352 more per pupil than charter schools.

All of the research has reached the same conclusion, that public charter schools tend to receive far less money and that inequity from state-allocated funding is mainly responsible for the gap in overall funding.

"Our results contradict the conventional wisdom that philanthropic contributions to charter schools offset public funding inequities," said Patrick J. Wolf, Ph.D., Distinguished Professor and Chair in School Choice at the Department of Education Reform, University of Arkansas. "Building on the 2014 national findings, non-public revenue in general does not allow the public charter school sector to close the overall revenue gap with traditional public schools. In some cases, it makes the gap larger."

To access the full report, including a state-by-state breakdown, please visit: http://www.uaedreform.org/non-public-revenue-in-public-charter-and-traditional-public-schools/.

About the University of Arkansas Department of Education Reform

The mission of the Department of Education Reform is to advance education and economic development in Arkansas and nationwide by focusing on the improvement of K-12 schools. The Department of Education Reform is committed to producing and disseminating high-quality research that will inform policymakers, scholars, parents, teachers, administrators and the general public about policies and practices that could improve the performance of schools in Arkansas and nationwide.

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