Are Friends of Schools the Enemies of Equity? The Interplay of Public School Funding Policies and Private External Fundraising

62 Pages Posted: 1 Sep 2023

See all articles by Lisa Barrow

Lisa Barrow

Federal Reserve Bank of Cleveland

Sarah Komisarow

Duke University - Stanford School of Public Policy

Lauren Sartain

University of Chicago

Multiple version iconThere are 2 versions of this paper

Date Written: August 31, 2023

Abstract

School districts across the U.S. have adopted funding policies designed to distribute resources more equitably across schools. However, schools are also increasing external fundraising efforts to supplement district budget allocations. We document the interaction between funding policies and fundraising efforts in Chicago Public Schools (CPS). We find that adoption of a weighted-student funding policy successfully reallocated more dollars to schools with high shares of students eligible for free/reduced-price (FRL) lunch, creating a policy-induced per-pupil expenditure gap. Further, almost all schools raised external funds over the study period with most dollars raised concentrated in schools serving relatively affluent populations. We estimate that external fundraising offset the policy-induced per-pupil expenditure gap between schools enrolling the lowest and highest shares of FRL-eligible students by 26-39 percent. Other districts have attempted to reallocate fundraised dollars to all schools; such a policy in CPS would have little impact on most schools’ budgets.

Keywords: education finance, public school, school funding, non-profits, fundraising, equity

JEL Classification: I22, I28, H75

Suggested Citation

Barrow, Lisa and Komisarow, Sarah and Sartain, Lauren, Are Friends of Schools the Enemies of Equity? The Interplay of Public School Funding Policies and Private External Fundraising (August 31, 2023). FRB of Chicago Working Paper No. 2023-31, Available at SSRN: https://ssrn.com/abstract=4557871 or http://dx.doi.org/10.2139/ssrn.4557871

Lisa Barrow (Contact Author)

Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States
216-904-8660 (Phone)

Sarah Komisarow

Duke University - Stanford School of Public Policy ( email )

Durham, NC

Lauren Sartain

University of Chicago ( email )

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