Funding Our Future: Challenges and Opportunities for K-12 Education

by Kate Henne, Today’s Giving

Society. Economy. Technology. Diversity. Across the multitude of factors that affect primary and secondary school needs across the nation, the only constant is change itself.  While the economic downturn of recent years has strained funding for kids in kindergarten through 12^th grade (K-12), it’s by no means the only budget challenge, and both public and private schools are increasingly trying to meet growing demands with shrinking resources.

A study of U.S. students ages 16-18 between 1985 and 2008 reveals that while enrollment the percentage of eligible students enrolled has fluctuated less than two percent, the national average number of enrollees rose 14 percent due to population increases. Another national study brought good news in achievement: The national status dropout rate declined from 14 percent in 1980 to 8 percent in 2008, with most of that change taking place in the 2000s. (U.S. Department of Education, National Center for Educations Statistics (2010).

The Minnesota, Dakota K-12 Funding Landscape

Schools in Minnesota and the Dakotas—and the Midwest in general—were exceptions to the national rates as people generally migrated to larger population centers. In the first half of the decade, the three states showed declines in enrollment of -1.6 percent (MN), -5.8 percent (SD) and -11.5 percent (ND). (See table.)

The sharp decline in enrollment in North Dakota was largely based upon out-of-state migration. The financial rub: Since the lion’s share of funding comes from state and local taxes, a lower population base means fewer dollars.

And while the Dakotas face funding challenges based upon declining enrollment and population, Minnesota’s current funding is challenged most by the state’s significant budget shortfalls.

In a recent session, the Minnesota legislature changed timeframes for when funding would be available to schools during the year. Laine Larson, Superintendent of Thief River Falls Public Schools, MN, said that next year school districts will receive only 70 percent of funding up front and won’t receive the remaining 30 until fall, and some districts will need to seek short-term loans to address the change.

North Dakota was one of few states not reporting a budget shortfall for their 2010 fiscal year. Some areas of North Dakota have seen economic growth, such as the recent “oil boom” in the western part of the state. In the areas of Fargo, Bismarck and Grand Forks—all of which have trended toward population growth over the past several decades—funding for K-12 has been stable, compared to rural areas or lower population centers where the local tax basis is smaller. And state legislation has provided an increase in K-12 funding in the last two sessions.

But even with those positive factors, funding has been a challenge. Changes in demographics, increased diversity, longer transportation due to consolidations, and the need to keep up with changing technology have all stretched the system.

Public K-12 schools across the country received a “shot in the arm” from a recent federal stimulus plan to cover basics such as textbooks and required technologies, but that funding was a one-time influx that won’t be available long-term.

Private schools are also feeling the squeeze of tighter-than-ever budgeting. Terinne Berg is a consultant for private schools and served as superintendent of Park Christian School in Moorhead, MN, for nearly 19 years. She says that while private schools can choose to receive some federal funding, most opt out to avoid the requirements and constraints which may prevent or distract from private schools’ focus on their missions.

But without careful and dedicated funding and budget management, private schools face huge challenges. (See also “Financial Success for Faith-Based Schools” in this issue). Berg says that on average, tuition only covers about 80 percent of costs per student. In addition, private schools must cover and carry capital expenses including building/facility ownership and management.

Foundations Bring Education from “Good” to “Great”
Over the past 20 years, North Dakota and western Minnesota have seen a surge in the number of foundations formed to enhance the K-12 public school experience beyond the basics covered by tax-based funding.

Lowell Wolff, Assistant to the Superintendent and spokesperson for Fargo Public Schools, says that because Fargo draws from a diverse funding base, has seen population growth, and has an engaged and active school community, the school district is “in good shape.” He quickly adds, “But ‘good’ can sometimes become an obstacle to becoming really great. That’s where the Fargo Public Schools Foundation comes in. They’re always looking for ways to make Fargo schools even greater.”

Wolff says that K-12 public schools foundations began decades ago in the South as a way for schools to cover funding gaps. But most district-based foundations nowadays are focused on augmenting education, enhancing the educational experience, and keeping alumni engaged.

Karen Heidt, Dickinson Public Schools (DPS) Foundation Director, says that since their foundation was created in 1989, they’ve remained focused on their mission to support unique, challenging, innovative projects and programs that enhance educational excellence and empower students to succeed.  The DPS Foundation has awarded over $147,000 in grant awards that help enhance and enrich education.  In addition, they fund two $1,500 scholarships annually.

Public-school foundations in Thief River Falls, Fargo, Grand Forks, Minot, Bismarck and Dickinson all offer teacher-incentive grants through which educators can apply to fund pilot and innovative programs not covered by traditional funding.

Bismarck Superintendent Paul Johnson says, “It’s from teacher’s special and innovative projects that we learn about things that really engage students….we need to nurture our most creative teachers’ efforts, but basic public funding doesn’t usually cover that kind of innovation.”

Kathi Schwan, chair of the Fargo Public School Foundation, says that at a high level donors or endowment managers may specify that funds are used for a specific purpose. “The Eleanor Laing Law endowment, for example, specifies that the FPS Foundation distribute funds for literary and library needs in honor of its namesake,” Schwan said.

The Minot Public School District Foundation was formed in 1993 and is headed by Dr. Lowell Latimer, who has been with the district for over 50 years in roles including teacher, principal and administrator. Latimer points to a recent example program funded by the foundation wherein young students were able to take a fieldtrip to the North Dakota Lewis & Clark Interpretive Center and Fort Mandan in Washburn. The kids, he says, came back excited to learn about North Dakota history and their heritage.

And Latimer says that while the foundation focus on funding innovative education projects and awarding scholarships from the community, the board also spends time assisting with Minot school reunions. While that task may be out of scope for larger school foundations, Latimer says it’s essential for Minot because most foundation contributors are alumni. Many have moved from the area and appreciate a central way to keep in touch, as well as having local people assisting with event logistics. While not all public-school foundations assist with reunion details, most can assist with putting alumni in touch with reunion organizers.

What about graduates of schools that no longer exist? Across rural areas of Dakotas and Minnesota, the consolidation of primary and secondary schools has resulted in many school closings. Alumni interested in finding a foundation close to their childhood alma maters should check with the school districts that currently preside in the location of their former schools

Foundation and school district leaders across the state agree on one thing: It’s often challenging to get financial support for K-12 education due to the public perception that their tax dollars are already covering education needs. Invariably they ask that people become more aware of needs in their district and they’ll see that tax dollars cover only the very basics, and teachers need flexibility to reach beyond those basics. ““If a teacher really wants to go above and beyond with a creative idea its really important that we give those teachers the resources to move ahead,” Johnson said.

Jenny Arel, Executive Director Grand Forks Foundation for Education, encourages foundation contributors: “Leave your legacy with the children that will be leaders 20 years from now. You’ll gain in the long run, too.”

Businesses Step Up Education Involvement

Businesses across communities over the past decade have been working with districts to offer their special resources to education, and opportunities abound for them to get involved. Several larger districts have dedicated staff on foundations or within the district to support coordination between schools and businesses. For example, the Fargo Public Schools District and the Foundation have worked with businesses to create the “Adopt a School” program, wherein businesses contribute resources—and often employee time—to assist with learning and provide workplace insight to a particular school.

Businesses sometimes work directly with the district to identify needs and match them with services that businesses can offer.  For example, Heidt said that in Dickinson, Baker Boy donated special ovens for a school remodeling project, and TMI Systems Design Corporation donated cabinetry work. In Thief River Falls, Larson said Digi-Key Corporation provides support for the FIRST Robotics program.

And Ellen Dunn, Fargo Public Schools work experience educator for students with disabilities, says there’s a great need for businesses to offer work opportunities for the older students with special needs. Dunn says that on-the-job experience is extremely valuable to special-needs students and would like more businesses to consider working with the district to offer placement. She added, “The business does need to be prepared to make a commitment—sometimes it takes 6-8 weeks of working with the district and the student to ‘ramp up’ for the experience.” (See also “Beyond the Classroom: A look at special-needs education” in this issue.)

Across the board, school districts and foundations welcome business participation and can point to many examples of community strength built by the liaison. Businesses interested in getting more involved should contact the school district, school board, or public- or private-school foundation.

Collaboration Is Key When Resources Are Tight
Terinne Berg points out that centralized school districts are larger than individual or private schools, and the feasibility of creating a foundation for a single or private school depends upon the size of the school, how long it’s been in operation (and size of alumni base), and the project cost of operating the foundation. She suggests that private schools look for ways to tie in with each other or with existing foundations to be more efficient.

Some cities or areas have a “community fund” which partners with educational nonprofits and projects to create efficiencies in gift management and accountability. For example, in Barnesville, MN, the Barnesville School Foundation is a fund within the larger Barnesville Area Community Fund which raises funds to provide books, computers, and equipment for the school and other education projects.

In addition to alumni and community support, a successful foundation needs to foster a strong relationship among the foundation, school district, and students.  Denise Laymon, executive director of the Thief River Falls Education Foundation, says their foundation has very strong relationships and nice representation from across school members including teachers, students and the school district. “The foundation meets regularly with the student senate, because they value the student’s input,” she said. Who better to understand current needs than student and teachers? And the result is that kids are more engaged with the school and with volunteer programs, keeping graduation levels high, better preparing students for work or college, and encouraging kids to stay in or come back to the region.

Berg says that it’s also important that board members of both schools and foundations are open to working with the development part of the business. “Board members would be more effective if they were open to getting involved more directly with fundraising and development, and understand how they can facilitate it,” she says. She encourages boards to view development as a collaborative effort, not just one development person or group’s responsibility.