Hidden Money: The Outsized Role of Parent Contributions in School Finance

Catherine Brown, Scott Sargrad, and Meg Benner:

In 2014, parents of students at Horace Mann Elementary School in Northwest Washington, D.C., spent over $470,000 of their own money to support the school’s programs.1 With just under 290 students enrolled for the 2013-14 school year, this means that, in addition to public funding, Horace Mann spent about an extra $1,600 for each student.2 Those dollars—equivalent to 9 percent of the District of Columbia’s average per-pupil spending3—paid for new art and music teachers and classroom aides to allow for small group instruction.4 During the same school year, the parent-teacher association, or PTA, raised another $100,000 in parent donations and collected over $200,000 in membership dues, which it used for similar initiatives in future years.5 Not surprisingly, Horace Mann is one of the most affluent schools in the city, with only 6 percent of students coming from low-income families.6

Horace Mann is not unique. Throughout Washington, D.C., and around the country, parents are raising hundreds of thousands—even millions—of dollars to provide additional programs, services, and staff to some of their districts’ least needy schools.7 They are investing more money than ever before: A recent study showed that, nationally, PTAs’ revenues have almost tripled since the mid-1990s, reaching over $425 million in 2010.8 PTAs provide a small but growing slice of the funding for the nation’s public education system. While the millions of dollars parents raise is equivalent to less than 1 percent of total school spending, the concentration of these dollars in affluent schools results in considerable advantages for a small portion of already advantaged students.9
This situation risks deepening school funding disparities, which already exacerbate inequities. In many states, state and local funds allocate more money to affluent districts and schools than neighboring districts and schools that have higher rates of poverty. According to a U.S. Department of Education report based on 2008-09 data, 40 percent of schools that received Title I money received significantly less state and local money than non-Title I schools.10 Twenty-three states spent more on affluent districts than high-poverty districts. In Pennsylvania, for example, the districts with the highest levels of poverty received 33 percent less state and local funding for education than affluent districts.11

Federal funding goes a long way to compensate for these discrepancies. When considering federal, state, and local spending, nationwide, the highest-poverty districts spend about the same amount—only 2 percent less—per student as the most affluent districts.12 In the majority of states, per-pupil spending in high-poverty districts is about equal or more than per-pupil spending in affluent districts.13
These numbers, however, do not illustrate the full picture of funding discrepancies. Average district per-pupil spending does not always capture staffing and funding inequities.14 Many districts do not consider actual teacher salaries when budgeting for and reporting each school’s expenditures, and the highest-poverty schools are often staffed by less-experienced teachers who typically earn lower salaries.15 Because educator salaries are, by far, schools’ largest budget item, schools serving the poorest children end up spending much less on what matters most for their students’ learning.