Foundations in the Local School District

Various types of foundations have been in existence for many years, especially in universities and private schools. More recently, in the past 2 to 3 decades, public school educational foundations have come into existence. The primary purpose of most foundations is to support the organization through financial gifts in the form of grants or outright contributions. Most educational foundations are developed through endowment funds, usually meaning that only interest income can be used to support the foundation's activities and goals. However, it is possible for a donor to specify gifts for a special purpose and that those funds be disbursed within a certain time frame. Most educational foundations are chartered under existing state and federal tax-exempt statutes [501(c) (3)], which encourage community and corporate giving.

Developing an educational foundation has become a popular way for local schools, both public and private, to increase the fiscal resources available for their general operation. School funding across the nation has undergone significant change and challenges over the past half century. As a result, many states have adjusted funding formulas downward, and the creation of school educational foundations is one of the means school districts have implemented to offset monetary losses. It is common for the foundations to supplement supplies, materials, services, facilities, and in limited cases, employee salaries. This is especially true in difficult economic times, but in general, foundation funds in public schools are used to support classroom activities. However, Carol Merz and Sheldon Frankel reported that more than one half of all the education foundations were created to offset declining income.

It is estimated by the Michigan-based Educational Foundation Consultants that nearly 18% of the nation's 14,200 public school districts have funds supplied by educational foundations. In addition, many schools and school districts have established their school foundation as part of the community's foundation. As an example, Cleveland City School's educational foundation could be set up inside the Cleveland Foundation. Little is known, however, about the total amount of funds raised by the school foundations.

The management of the school foundation is usually controlled by a board of directors, typically having 10 to 15 members, with representation from the local school board and administration. Typically, the foundation funds are placed in accounts separate from the school district and are administered by the foundation's treasurer. Funds are disbursed by the foundation's board or subcommittee. The financial awards from a foundation are generally given on a competitive basis through an application process conducted by the foundation's awards committee. Only a limited number of school-based foundations have paid staff; most depend on volunteers to conduct the foundation's business.

Some educational leaders who have worked with various foundations sense a disadvantage in the existence of school foundations. Many believe that school foundations are rarely effective unless they are in an affluent community where patrons have available funds to support various charitable initiatives. Others believe that the school foundations further exacerbate funding inequities in poor and wealthy districts. In addition, some of the districts that can afford to support educational foundations are concerned that the state funding formula may count the income from the foundation against the school district's overall revenue.

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