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Note: This report is available in its entirety in the Portable Document Format (PDF).
SECTION I.
INTRODUCTION
Throughout American history, public schools have been supported by education support organizations (ESOs). Formed by groups of citizens, they have supported and advanced quality education, serving as catalysts and change agents in communities across the country. They help bring together diverse stakeholders; work with school districts and communities and work to improve educational outcomes. They vary widely in size, activities, and even in purpose.
A subset of these ESOs does have certain distinct characteristics. Local education funds, or LEFs, are nonprofit organizations that advocate for involvement by all segments of the public in public education, for accountability and achievement of high standards by all involved with public education, and for systemic improvement in the quality of public education. LEFs work with, but are independent of, their school systems, have paid staffs and boards reflective of the community, and tend to work in school districts with a significant population of low-income children.
The Public Education Network (PEN) is a national organization of LEFs and individuals working to improve public schools and build citizen support for quality public education in low-income communities across the nation. PEN believes that "an active, vocal constituency is the key to ensuring that every child, in every community, benefits from a quality public education."
According to PEN, its LEF members pursue these goals in several ways, mainly by:
- leveraging and generating new resources and relationships for education reform initiatives in their corresponding districts through, for example, facilitating investment from local governments, businesses, and philanthropic foundations, and convening diverse constituencies and individuals;
- ascertaining public opinion and concern over the most pressing education challenges and working to inform and engage the public through, for example, information campaigns, community assessments, and forums.
- providing support for academics through identification of instructional or curricular areas of need and creation and provision of professional development opportunities or other expertise to address these needs.
Spurred in 1983 by a grant from the Ford Foundation that seeded 53 LEFs across the country, the LEF movement has grown in size and influence. In 2003, PEN reports that it and its member LEFs are building public demand and mobilizing resources for quality public education on behalf of almost 11 million children in more than 1200 school districts in 32 states and the District of Columbia.
This study was commissioned by PEN with the goals of building awareness about the vital role and characteristics of LEFs and educating policymakers, the media and the public. Through the provision of data on the financial, programmatic and functional aspects of this relatively new movement, this research intends to more clearly define LEFs and distinguish them from other nonprofit organizations involved in K-12 public education at the local level.
Definitions in This Report
For the purposes of this report, education support organizations (ESOs) are defined as groups exempt under Section 501(c)(3) of the Internal Revenue Code set up to aid local public schools. This broad category of ESOs is divided into LEFs and the remaining ESOs called school foundations. Most LEFs belong to PEN. Therefore, an analysis of PEN's organizational membership provides an excellent portrait of LEFs.
While school foundations often resemble LEFs in many of their activities (for example, both may provide awards to teachers), PEN identifies several critical distinctions between the two groups. LEFs focus on school districts with a significant proportion of low-income families, working to improve the education systems where there is greatest need. Additionally, many school foundations serve only one school within a district (Merz and Frankel, 1997), whereas all LEFs serve entire districts and in many cases, multiple districts within a region or state.
Another key difference between LEFs and school foundations, according to PEN definitions, is that school foundations do not attempt to maintain independence from the school systems that they seek to improve. School foundations were created simply to raise extra dollars for school programs or to make up for public revenue that had been lost (Bergholz, 1993) - unlike LEFs, their role is not to offer reform-oriented constructive criticism. Hence, school foundation staff may be paid by the school districts they serve and may have boards that are not reflective of their communities. A district superintendent often acts as chairperson, or is granted the right to vote in board decisions. SF resources are most often deployed for existing school programs, rather than for system-wide reform efforts.
The source of data for this research is the IRS Forms 990 filed by ESOs exempt from taxes under IRC Section 501(c)(3). These annual reports are required from those with annual gross receipts greater than $25,000. Based on the purpose and program descriptions include in the forms, we identified 1,339 ESOs that included 72 PEN member organizations1. Because it is often difficult to determine whether an ESO met the criteria for classification as a LEF based on the words written on the Forms 990, the members of PEN have been used to represent all LEFs. The remaining 1,227 organizations may include some LEFs that are not PEN members, but the overwhelming majority are school foundations. Parent-teacher organizations, school booster clubs and organizations whose sole mission is to bestow scholarships were not included in this group of ESOs.
Data Limitations
This study represents a descriptive, statistical portrait of local education funds. While the National Nonprofit Organization Research Database contains a wealth of information, there are some data limitations. According the data available from one statewide organization promoting school foundations, the California Consortium of Education Foundations, less than 40% of California school foundations are represented in the data. This is largely because religious organizations and organizations with less than $25,000 in annual gross receipts are not required to file a Form 990 and so are not included in these results. An additional limitation with the data is that the descriptive information on the IRS Form 990 often does not provide enough detail to make definitive pronouncements as to whether or not an organization dedicated to the strengthening of public education is indeed a LEF as defined by PEN.
For further information on methodology and data sources, please refer to Appendix A.
Note: This report is available in its entirety in the Portable Document Format (PDF).
1. At the time of this research, there were actually 81 PEN members, but only 72 had filed Forms 990. This is because some PEN members were small and not required to file, some did not exist during the time period examined here (2001), and others were programs of larger organizations and were not required to file separately.
Acknowledgements
This report was written by Linda M. Lampkin and David D. Stern, with assistance from Sheryl Romeo, all at the Urban Institute's Center on Nonprofits and Philanthropy based in Washington, DC. The project was commissioned by the Public Education Network in Washington, DC.
The authors would like to thank Guitele Nicoleau and Rudy Careaga of PEN for their careful review and thoughtful comments.
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