Private funding for public education: A local response to state actions

The popular press routinely reports on individuals and communities raising considerable funds for their public schools. These reports naturally lead to questions about the equity of these contributions, especially in light of extensive state actions to reduce disparities in public funding across school districts. This research investigates factors that influence the probability and amount of private funding for public education, with particular attention to how state control over local education finance and variations in demand for education services influence private contributions. Private funding for public education is defined narrowly for this study as contributions from selected booster-type clubs and local education foundations and funds. The study is limited to larger school districts, defined as those with seven or more schools.; The study relies on nonprofit, state, county, and school district data from a variety of sources. This research is the first to link the IRS Form 990 nonprofit organization tax return data to a national sample of school districts. In addition, this research examined the effect of education demand heterogeneity, state charitable contribution deductions, and county-level charitable giving behavior on private funding for public education. These factors have not been examined previously.; Private funding from booster-type clubs and local education foundations was not widespread in larger school districts, and per pupil amounts varied widely from {dollar}1 to {dollar}307 per pupil, with an average of {dollar}15 per pupil in 1997-98. The limited occurrence and wide range in private funding per pupil do not automatically dismiss equity concerns since the funding occurs more often and is higher in higher-income communities.; The regression analyses found that state controls over local education finance do bring about a private response in the form of private funding for public education, although not always in the direction anticipated. For example, state school finance reform activities and potentially binding tax and expenditure limitations had a significant and positive effect on private funding per pupil, while state recapture provisions had a negative effect on private funding per pupil. The findings regarding variations in demand for education services were mixed.