HBCU Financing

The landscape of research on education funding is broad and researchers have probed into the depths of this issue for decades. The topic consistently draws attention from economists in public finance, education researchers, as well as those concerned with issues like human capital and economic development. This research has looked at the geography of education funding, the historical legacy of policy decisions and social institutions, and the intricacies of state funding systems (budget mechanisms). On the whole, the research is both sound and credible, displaying a high level of sophistication and nuance (see Baker 2015 for a review).

Research consistently finds support for the relationship between increased funding and improved outcomes for children (e.g., reducing achievement gaps) and communities. That relationship holds most consistently for low-income students and school districts. Recently, research has turned to assess the true causal effect of additional funding. Moreover, the research indicates that it matters which specific strategies that funding supports because the simple increases in funding do not guarantee benefits will accrue to those students most in need. For example, researchers find that reforming the structure of education finance in a state is more impactful than merely allocating funds for class size reduction (LaFortune et al 2016).

It is a well-established fact that higher spending on education produces positive outcomes for students, schools, and communities. When examined over time, results show returns in the form of higher school completion rates, higher earnings in adulthood, and reductions in adult poverty (Coleman et al., 1966; Hedges, Laine, & Greenwald, 1994; Borman & Dowling, 2010). It’s worth noting that much of this research was conducted on systems that had instituted funding reforms to ascertain the impact of improved system funding as a result of the deliberate financial intervention. 

Moreover, looking beneath the broad analyses of the effects of increased state-level spending to analyses of school-level expenditures, it is clear that there are huge benefits that derive from increased funding. Across a range of interventions, research finds that the cost-benefit estimates for both students and society consistently show magnitudes of positive returns for both. The Washington State Institute for Public Policy examined 52 different educational interventions and found 45 of the 52 showed a favorable cost-benefit. For those with a favorable estimate, the net benefits range from a low of $162 positive return to a $36,164 return. Their model includes projections for a range of benefits to both society and the individual participant. At the community [society] level, they estimate increased tax revenue as well as savings from reduced criminal justice system expenditures, child welfare, and other systems. At the individual level, they account for increased participant lifetime earnings and participant spending, as well as benefits that accrue to the community (e.g., crime victims).

The landscape of research on education funding is broad and researchers have probed into the depths of this issue for decades. The topic consistently draws attention from economists in public finance, education researchers, as well as those concerned with issues like human capital and economic development. This research has looked at the geography of education funding, the historical legacy of policy decisions and social institutions, and the intricacies of state funding systems (budget mechanisms). On the whole, the research is both sound and credible, displaying a high level of sophistication and nuance (see Baker 2015 for a review).

Research consistently finds support for the relationship between increased funding and improved outcomes for children (e.g., reducing achievement gaps) and communities. That relationship holds most consistently for low-income students and school districts. Recently, research has turned to assess the true causal effect of additional funding. Moreover, the research indicates that it matters which specific strategies that funding supports because the simple increases in funding do not guarantee benefits will accrue to those students most in need. For example, researchers find that reforming the structure of education finance in a state is more impactful than merely allocating funds for class size reduction (LaFortune et al 2016).

Commission a report or gather evidence of the disparities in your community, particularly educational disparities in communities of color and low wealth communities. An equity assessment should be a component of that review. The Colorado Department of Education has a model assessment that features some great elements. Voices for Racial Justice offers a number of education data elements that can inform that process.

Gain an understanding of the funding landscape and history in your state/community and its history. EdTrust is a good place to start in that it provides an analysis of educational funding equity for all 50 states.  Additionally, the Alliance for Resource Equity provides a useful framework for examining funding equity.

Gain an understanding of the connections between educational investments, human capital development, and economic development. Enlist stakeholders from a range of sectors including private sector, secondary education, workforce/economic development, community leaders, legal experts, and higher education. You can find a great toolkit available from the American Institute for Research on stakeholder engagement, specifically focused on equity.

Given that the majority of the educational reforms that have been implemented have occurred through court action, it is imperative to understand the both the constitutional guarantees and legal history of education in your community.

Commission a report or gather evidence of the disparities in your community, particularly educational disparities in communities of color and low wealth communities. An equity assessment should be a component of that review. The Colorado Department of Education has a model assessment that features some great elements. Voices for Racial Justice offers a number of education data elements that can inform that process.

Gain an understanding of the funding landscape and history in your state/community and its history. EdTrust is a good place to start in that it provides an analysis of educational funding equity for all 50 states.  Additionally, the Alliance for Resource Equity provides a useful framework for examining funding equity.

Gain an understanding of the connections between educational investments, human capital development, and economic development. Enlist stakeholders from a range of sectors including private sector, secondary education, workforce/economic development, community leaders, legal experts, and higher education. You can find a great toolkit available from the American Institute for Research on stakeholder engagement, specifically focused on equity.

Given that the majority of the educational reforms that have been implemented have occurred through court action, it is imperative to understand the both the constitutional guarantees and legal history of education in your community.