The 21st Century Charter Schools Initiative

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The 21st Century Charter Schools Initiative

State to State

Charter school funding is dictated by each state. In many states, charter schools are funded by

transferring per-pupil state aid from the school district where the charter school student

resides. Charters on average receive less money per-pupil than the corresponding public

schools in their areas, though the average figure is controversial because some charter schools

do not enroll a proportionate number of students that require special education or student

support services. Additionally, some charters are not required to provide transportation and

nutrition services. The Federal Elementary and Secondary Education Act, Part B, Sections 502–

511 authorizes funding grants for charter schools.

In August 2005, a national report of charter school finance undertaken by the Thomas B.

Fordam Institute, a pro-charter group, found that across 16 states and the District of

Columbia—which collectively enrolled 84 percent of that year's one million charter school

students—charter schools receive about 22 percent less in per-pupil public funding than the

district schools that surround them, a difference of about $1,800. For a typical charter school of

250 students, that amounts to about $450,000 per year. The study asserts that the funding gap

is wider in most of twenty-seven urban school districts studied, where it amounts to $2,200 per

student, and that in cities like San Diego and Atlanta, charters receive 40% less than traditional

public schools. The funding gap was largest in South Carolina, California, Ohio, Georgia,

Wisconsin and Missouri. The report suggests that the primary driver of the district-charter

funding gap is charter schools' lack of access to local and capital funding.

A 2010 study found that charters received 64 percent of their district counterparts, averaging

$7,131 per pupil compared to the average per pupil expenditure of $11,184 in the traditional

public schools in 2009/10 compared to $10,771 per pupil at conventional district public schools.

Charters raise an average of some $500 per student in additional revenue from donors.

However, funding differences across districts remain considerable in most states that use local

property taxes for revenue. Charters that are funded based on a statewide average may have

an advantage if they are located in a low-income district, or be at a disadvantage if located in a

high-income district.

Debate Over Funding

Nearly all charter schools face implementation obstacles, but newly created schools are most

vulnerable. Some charter advocates claim that new charters tend to be plagued by resource

limitations, particularly inadequate startup funds. Yet a few charter schools also attract large

amounts of interest and money from private sources such as the Gates Foundation, the Walton

Family Foundation, the Broad Foundation, and the NewSchools Venture Fund. Sometimes

private businesses and foundations, such as the Ameritech Corporation in Michigan and the

Annenberg Fund in California, provide support.

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