Do you know how school districts are funded? Livingtree CEO Gary Hensley took a moment in the first of our new vlog series to address the confusion of where districts receive their funding and the challenges they face. What are your thoughts?
Hey everybody, my name is Gary Hensley and I am the CEO of Livingtree and this is a weekly episode that we are going to try and do. We work in the field of education, and specifically around fundraising and family engagement, and so we are going to cover topics that are related to those two. And one of the things that I get the privilege to do is to go around the country and talk about fundraising, and I’ve noticed that there is some confusion about how schools get funded. This is a conversation that is going on nationally as districts and states try to figure out how to support their schools. So, I wanted to go over what those three buckets are and the relative percentage of that, and I’d love to get your feedback if you knew that, or didn’t know that, or your thoughts around school funding and maybe your solutions to that.
So, there are three buckets. The one that most people are familiar with is the federal bucket. So the federal government does provide money to schools and you hear that there are billions of dollars being spent, and that is true, but it is spread out over 14,000 districts. So when you really look at the percentage of money that is going to any individual school district, it is relatively small, so it ranges anywhere between 5 and 10 percent of the overall school district’s budget. So, it is the smallest of all of the buckets that schools get money from.
The second bucket is the state. So, the state provides, and depending on the state, around 40 percent of the overall school district budget.
And then the last bucket is the local bucket. And that comes from local taxes in a lot of cases, and that funds the other 40 to 50 percent of the school district’s budget. So, as you can see the biggest buckets really come from the state and the local entity. And what has happened overtime since the recession is a lot of the local dollars went away because the biggest portion of taxes is assessed from property value.
So those are the three buckets that comprise how school districts get funded. And that might be a surprise to you, especially the percentage of those three areas. So just wanted to go over that because this a part of the problem that school districts are wrestling with, is: what percentage, and who needs to fund, and if the state needs to provide more do you get that from local taxes or does the federal government need to kick in more dollars. What you start to realize is that it’s really 50 different educational systems across the U.S. so as you can see it’s a challenge and school districts are wrestling with this.
Obviously for us, a growing portion, and I don’t know what percent it would be is crowdfunding.