What a New Study Says About K-12 Funding Trends

It's hardly news that K-12 philanthropy is an enormous enterprise, growing in size, visibility, and influence. Once derided as ineffective (remember the Annenberg Challenge?), philanthropists in today’s education landscape exercise significant influence over the shape and content of K-12 education policy. Whether that influence is for the better may be open to debate, but there is no questioning the influence wielded by funders such as the Gates, Walton, and Kellogg foundations, among others. 

A recent study by Michigan State University researchers Sarah Reckhow and Jeffrey Snyder analyzed trends in K-12 giving, and their findings contain good news for organizations striving to offer alternatives to traditional elementary and secondary education. The news is not so good, however, for traditional public education entities. 

The study, published in the journal Education Researcher, found that philanthropic giving for K-12 education soared more than 70 percent in the past decade, from $487 million in 2000 to nearly $844 million in 2010 (and yes, those are inflation-adjusted dollars). Further, the number of grantees receiving more than $1 million in total grants more than quadrupled, from only 7 in 2000 to 34 in 2010.

What’s more, an increasing share of those funds are flowing to organizations the authors refer to as “jurisdictional challengers,” or groups that compete with or offer alternatives to the K-12 status quo.

These jurisdictional challengers include national charter organizations (hello, KIPP Foundation), organizations focused on teacher training and recruitment (see: Teach For America), and venture capital groups such as the New Schools Venture Fund. These groups use their grant dollars to invest in other jurisdictional challengers.

Meanwhile, the study reports that while traditional educational institutions have not been left out of the K-12 funding picture, their share of the pie has shrunk over the years covered by the study. This is true for public school systems, universities, and state education departments. The latter have seen the most drastic funding reductions, the study found.

But perhaps most significant was the study’s finding of a pattern of convergence among funders and the organizations they support, with top foundations supporting similar types of activities and often the same organizations. The top recipients of foundation grants in 2010 — the Charter School Growth Fund, Teach For America, and KIPP — all received grants from more than one of the major funders.

This convergence can also be viewed more broadly, with shared funding relationships existing among dozens of organizations and the foundations that support them. Using social network analysis, the study’s authors depicted a dense web of funding arrangements linking some of the largest grantees to dozens of other organizations, both large and small.

The study’s findings support some of what we know about K-12 education funding, namely, that top funders often prefer to work with organizations they have funded in the past. While this can make it more difficult for smaller, lesser-known organizations to get on these foundations’ radar, the social network analysis conducted by Reckhow and Snyder underscores the importance of broad networking. Organizations that align their priorities and activities with those of these larger grantees can give themselves a greater presence and an edge in the funding race. This means that smaller charter networks and other jurisdictional challengers should network effectively, building relationships that raise their profile in the education landscape.

Although the study contains little good news for school districts and other traditional educational institutions, they are not out of the funding race. As we've been reporting, there are some major funders now ramping up, like George Lucas, who are more interested in improving the existing system than overthrowing it.