Schools operate within a unique funding structure. Grants are an important part of this structure, but they are not the only source of additional revenue. I’ve developed the School Support Pyramid to demonstrate how the various sources of revenue can work together. Your school may operate a little differently, with different revenue streams being higher or lower on the pyramid, but this model represents what I have seen in the schools I have worked with.
School Support Pyramid
At the base of the pyramid, you will find general school funding. This may be tuition for private schools or state revenue based on enrollment for public schools. It may also include special program funds, such as Early Literacy funding that many states offer, and funds for federal programs such as Title I and Title II. Generally speaking, once enrollment is set, this money is predictable and reliable, and it can be budgeted in advance.
The next level is school-based fundraising. This includes any money raised from school-sponsored or parent group-sponsored activities. It may be the annual gala and silent auction or a 5K run. It may be a holiday cookie dough sale or gift wrapping at the local bookstore. It could also be the snack stand at your sports events or weekend car washes. Whether the activity is sponsored by school staff, parent volunteers, or a formal group such as the PTO or Booster Club, there is some exchange of value (a product or a service is purchased) and the proceeds are donated to support school goals. This is the next level on the pyramid because it is generally the first optional fundraising activity that schools go to. It is familiar and easy to understand for both parents and school staff members. Funds from these activities may not be consistent or reliable. Schools don’t generally budget for these donations unless they have a strong track record of successful fundraising.
Would you like a free worksheet to help you plan this out? Download this free resource now.
The third level on the pyramid is donations. This includes any voluntary contributions to the school that are not tied to receiving anything in return. Some schools develop a recognition program for donors, with designations for various donation amounts. Others invite donors to pay for a brick or stone with their name engraved in a pathway or on a wall. Schools can solicit donations from parents, extended family members, and even wealthy patrons. It takes time and consistency to develop this type of donor program and many schools do not take advantage of this opportunity. That’s why this is the next level up. It is less common and not always successfully implemented. This funding source is also not generally included in your annual budget, unless your school has a strong history of soliciting donations. The keys to a successful donation program are relationships and shared vision. The donor needs to feel that he is contributing to something meaningful that aligns with his values, and that he can trust you and your organization to fulfill your promises.
The forth level on the pyramid is grants. Some schools write small grants to support individual projects or classrooms. Once in a while, schools may write larger grants for a specific initiative. Others rely on major federal grants to build or expand school facilities. Very few schools have developed the type of grants pipeline described earlier. The ones that do are often part of a network of schools that can provide a grant-writing team, but I believe more school leaders would add grants to their revenue stream if they understood how to manage the process. Grants may be added to the annual budget if approval has been received prior to the new school year. Most grants require that the funds be accounted for separately from general funds and they must be tracked and reported in accordance with the grant agreement.
The final level of the school support pyramid is business support. This level includes partnering with businesses to achieve specific goals, such as paying for an out-of-state competition for your students or furnishing a new computer lab. In exchange, the business or corporation gets recognition of some sort for its contributions. In some cases, these agreements may include payments throughout the year, such as for advertising placement on your website. In other situation, they may be tied to a specific event such as sponsoring your annual 5K Run and displaying a large banner with the corporation name at the event. These revenues may be added to the annual budget if you have an agreement in place with the business prior to the new school year. This is the final piece of the funding puzzle that many schools overlook.
Learn more in this blog post: 5 Steps to Develop Corporate Sponsorships for Your School
What are other schools doing?
I surveyed my readers to learn what they think are the most successful ways to raise funds for their schools. 50% of my readers tell me that general fundraising is most successful for them. 25% rely on donations, and only around 8% have found success with grants.
It’s interesting to note that none of the school leaders who responded to my survey have found success in building partnerships with businesses. However, I know of several schools that proudly post large banners from local businesses. Their board members report that they have “no trouble” finding sponsors.
Other schools take advantage of matching grant opportunities from corporations where their families and community members work. If a parent makes a donation to your school, their employer may match the donation. Some businesses have a separate foundation that offers grants, and some give grants through direct corporate giving. Encourage your community members to seek these opportunities.
Types of giving
Fundraising - a financial contribution in exchange for goods or services, such as purchase of cookie dough, paying for a car wash by students, or buying snacks at the booster club snack stand
Donation – a one-time offering of money, services, or products, often to meet a specific short-term goal or general overhead costs, with no expectation of receiving value in return
Philanthropy – a commitment to support long-term goals, with multiple, generous offerings to support major efforts or continuous expenses
Grant – an agreement where an agency gives funds to the school to meet a specific goal within a specific time frame defined in the agreement
Corporate sponsorship – a donation of money, goods, or services from a corporation or business for a specific event, project or funding need
Business partnership - a repeated donation from a business in exchange for advertising or marketing privileges over a period of time
Consider the focus for each type of giving. A grant is focused on meeting the funder’s goals. Your proposal will be successful to the extent that it furthers the grant-maker’s agenda.
A donation is connected to the donor’s perception that achieving a specific goal is important. You will be successful in attracting donations when you can clearly articulate the benefits of the goal you want to achieve.
Corporate sponsors want to fulfill their organizations mission to invest in their communities. You want to build relationships with key employees who are decision makers in the organization.
Business partners want to be associated with successful events and projects. They expect value in exchange for their donations, through marketing opportunities and the right to be associated with your success. You will attract business partners when you can demonstrate success with other similar projects.
Philanthropy is based on your vision and the transformation you promise. A philanthropist is willing to wait years to see the results of a project, if the vision aligns with his or hers. They invest in your success, not in a specific project or goal.
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Seven steps to build your pyramid
It’s not enough to know about these potential funding sources. You need to take action. Follow these steps to review your current funding situation and determine where to focus your efforts.
Evaluate your current status
Choose one new area to focus on
Set goals
Make a plan
Take action
Measure results
Repeat from step 1
Your current status includes how much money you are bringing in from fundraising, donations, grants, and business support, and what percentage in each category. Decide which area you want to focus on to improve revenue, and then set goals for how much new revenue you hope to create. Make a plan and implement the plan, then measure the results. Depending on results, you may want to continue the plan and set new goals, or choose to focus on a new funding stream. Repeat the cycle until you have developed consistent and sufficient support for your school programs.
Would you like a free worksheet to help you plan this out? Download this free resource now.
Successful school leaders understand the importance of developing all four types of giving to sustain a school and create a legacy. Set your goals to increase your school's support revenue. You can have greater impact through lasting partnerships that support your goals.
New Series by Peggy Downs
Book 1: Start-Up Guide for School Grants (Answers to the Questions You Should Be Asking)
Book 2: Charter School Grants (Save Time and Write a Better Grant)
Book 3: Grant Writing for Impact (Leverage Grants to Dramatically Increase Funding, Impact, and Credibility for Your School)
Each book in this series addresses a different level of grant writing skills. Just getting started and full of questions? Start with book 1. Ready to write your first grant? Choose book 2. Interested in learning how to develop a school grants program? Then book 3 is for you.
Each book offers links to free resources to help you be successful with school grants. Order yours on Amazon today.Grant Writing for School Leaders
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Peggy Downs works with school leaders who want to leverage grants to dramatically increase funding, impact, and credibility for their schools. More info and a ton of free resources are waiting for you at: www.peggydowns.com
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