25d • General discussion
Public Schools Need a Donor Strategy, Too
Eligible students don’t create scholarship dollars. Donors do.
That is the next part of the Education Freedom Tax Credit conversation I think public-school leaders need to spend some time with. Over the last few weeks, I have been very clear that public-school students are among those that qualify for these scholarships. I have talked about tutoring and other eligible expenses applicable specifically to public schools. I have even talked about the development of Scholarship Granting Organizations and how families could find them. Nonetheless, the EFTC program could still produce only a few scholarships if donors aren’t encouraged to contribute.
The EFTC will only work if enough individual taxpayers make qualified cash contributions to SGOs. As a result, size of the scholarship pool, especially in the next few years as the program begins, is dependent on the number of contributing donors. As a result, engaging with and preparing your community now is essential for both short and long term success.
Thankfully, I am happy to see that public-school organizations are starting to recognize this.
The School Superintendents Association’s (AASA) current superintendent series has moved beyond the basic question of whether public schools can participate. One session is directed at helping district(s) assess community donor potential, develop model revenue projections and even walk through what donor-relationship strategy means for them. Beyond that, even the Bipartisan Policy Center has built a calculator around essentially the same question: how many participating taxpayers would it take to fund public-school programs at a scale that is impactful?
The basic premise is relatively simple: Suppose an SGO serving public-school families in a community wanted to build a $100,000 scholarship pool. At $1,700 per participating taxpayer, reaching that amount would require about 59 maximum-credit contributions.
Of course, this is real life, and inevitably, it will be messier. It is likely that the majority of donors may contribute only partial amounts, instead of the full $1,700 that the credit is available for. Scholarship organizations will have their own missions and priorities. Treasury STILL(!) has regulations to finish. But 59 people is easier for most of us to conceptualize, as opposed to only thinking about the $100,000.
The next question becomes: who are they in your community?
Some probably already support the local education foundation. Some may be parents or alumni. Some may work for, or be, the largest employers in town. Others may be retirees, professionals or taxpayers who have never made a meaningful K–12 education contribution before.
Realistically, there isn’t a chance that every one of those people will give. My point is that the donor universe is changing.
Public-school fundraising has traditionally leaned heavily on foundations, grants, events and business support. We have really leaned into that here in Pennsylvania with our own state level tax credit programs. However, the federal credit is built around individual taxpayers, which creates a new development challenge.
At FundEDU, we already see the importance of that distinction in tax-credit work. Our day-to-day work already involves partnering with businesses, individual donors, scholarship organizations and schools. With that experience, I can confidently say that the mechanics of a tax credit do matter, but at the end of the day, a generous credit sitting in the tax code only creates a donation opportunity. Someone still has to identify it, explain it accurately and make participation easy, efficient and manageable.
In my experience, public school leaders are not accustomed to thinking about revenue that way. Federal appropriations, state aid and local taxes do not depend on convincing individual taxpayers to opt into a contribution the way that scholarship funding does. As such, I would caution against opening your EFTC donor strategy by announcing a giant theoretical funding opportunity. Instead, I would start with your community:
How many people already support the education foundation? Which local employers have large workforces? Which parent, alumni and community networks already communicate regularly? Who can credibly introduce an SGO to taxpayers who care about local students?
After identifying your donors, it helps to be precise. For example, if you want enough scholarship capacity to support a needed tutoring initiative, what does that require in donors? If the goal is something else, how many contributors would need to participate? What level of participation is realistic in year one?
Those are the kinds of questions AASA is now putting in front of superintendents, and for good reason. Donor capacity determines whether the EFTC becomes an actual resource, or if it winds up buried as an obscure, unused credit.
The public-school EFTC conversation has moved quickly. Originally, we had to ask if public-school students were included. The next question was what those students might use scholarships for. Now comes the harder question:
Who will fund those scholarships?
0
0 comments
Public Schools Need a Donor Strategy, Too
skool.com/fundedu
Learn how schools, ED foundations, and donors can use educational tax credits like the PA EITC and the federal Education Freedom Tax Credit.
Leaderboard (30-day)
1
+1
Powered by