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Endowment Campaign FAQ

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Campaign Specific Questions

Who will the endowment benefit? 

  1. Current students: We will draw from the endowment every year adding to LPIE’s annual support which enables enriching educational programs and support for every grade at Burton Valley, Happy Valley, Lafayette, and Springhill elementary schools, Stanley middle school, and Acalanes high school. 

  2. Future students: As the investments will continue to grow, we are preparing for the growing needs of future generations  

  3. Teachers and all education staff: 80% of LPIE’s funds typically go toward supporting educators and ensure they have the support and supplies they need. 

  4. Community members: Public schools have a directly positive impact on attracting businesses, maintaining  property value, reducing crime, and improving the quality of life for us all. Redfin states that homes in top-performing school districts command $50/square foot more than homes in average districts.

 

Why is an endowment so powerful and how will it provide funding? 

Our initial goal is to raise an initial $10M to invest through our endowment. On average an endowment earns between 5-7% annually. We will likely draw between 3-5% of the endowment principal every year to act as the cornerstone of the annual fundraising. As the principal will continue to grow, so will its annual disbursement. The ultimate goal is for the annual return on investment to be sufficient to address the instability of public school funding.

With a $10M endowment we could anticipate being able to draw $500,000 in tax-exempt proceeds  a year to go directly to the schools. 

With a $20M endowment we could anticipate being able to draw $1,000,000 a year. We can substantially accelerate our progress to a $20M endowment  by allocating or specially fundraising $100,000 in additional support each year. 















 

How will the endowment and the LPIE annual giving work together? 

LPIE’s annual fund will remain a vital source of public school funding every year. The 2022-23 annual fundraising goal is $4.1 million. The annual fund is, and will continue to be, spent in the same year it is raised. 

We will draw between 3-5% from the endowment each year. With a $10M endowment we can expect that to provide an additional $500,000 on top of our annual fundraising to go directly to our schools. The endowment will simultaneously contribute to the public school funding every year while also reinvesting for long-term growth and future use. 

 

Can endowment funds be earmarked for specific purposes? 

Given the delicate balance between the public and private funding, LPIE is not able to designate fund allocation for annual giving or the endowment draw. See question 5 for further explanation of the decision making process.  Generally, 80% of the funds go toward supporting educators, specialists, and staff, 10% to supplies, 9% school site specific support and 1% programming and experiences. 

 

How was the endowment manager selected? 

A volunteer committee with investment expertise conducted a thorough evaluation and interview process. RFPs were sent to a variety of firms and subsequent interviews were conducted utilizing a consistent evaluation matrix. Based on the needs of LPIE and services of the firms, the committee made a final recommendation for approval by the LPIE Board of Directors. 

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Public School Funding + LPIE Questions 

Public School Funding Glossary 

LCFF: California public school funding is determined by the Local Control Funding Formula (LCFF). This formula allocates more funding to school districts that have high concentrations of English language learners, low-income students, and/or foster youth.

 

Basic Aid District: Acalanes High School some years is considered a Basic Aid District and sometimes not. Lafayette School district has never been considered a Basic Aid District. Throughout the year, some districts fall in and out of basic aid status. For a variety of reasons having to do with such things as local tax collection procedures, their status may be uncertain.

 

The California Constitution guarantees that each school district will receive a minimum amount of state aide, called “basic aid”. Basic Aid Districts essentially occur when the local property tax revenue in a district exceed what the state allocated to them under LCFF, and they are able to keep the excess.

 

Out of California’s nearly 1,000 elementary, high school, and unified school districts, approximately 100 are basic aid districts. However, this number changes from year to year as local property tax revenues and enrollments fluctuate. A district can be a revenue limit district one year and basic aid the next.

 

Proposition 13: When California passed Prop 13 in 1978, it capped property taxes in the state. That meant a big reduction in tax revenue. One of the areas most affected was public schools. California went from having some of the highest per student funding of schools to among the lowest in the nation.

 

Prop 13 capped property taxes in the state to no more than 1% of full assessed value. Before Prop 13, local property taxes were the main source of K-12 funding, on average about 60%, but  because Prop 13 drastically reduced property taxes, they are no longer the major source of school funding. California school districts had a great deal of autonomy that prop 13 shifted to state policymakers. 

 

Parcel Tax: Parcel taxes are one of the only local revenue options allowed by Proposition 13. They provide school districts with the ability to raise taxes to supplement the funding they receive from the state. Parcel tax measures involve a simple flat fee that applies to all parcels. A small share of measures propose variable rates that hinge on property size or use (e.g., single-family homes, business, or undeveloped land) 

 

Measure L: Measure L is a local parcel tax measure that  was passed by Lafayette voters in March 2020. It established a $290 parcel tax for 7 years only, providing $3,011,360 annually in dedicated funding for Lafayette School District K-8 schools, with independent citizen oversight, an exemption for seniors, and all money staying local. 

 

Why don’t property taxes pay for schools?

In California, property taxes go to the state’s general fund rather than directly into the community to fund the schools. The money is then allocated by the legislature and governor, along with other areas of state spending. School parcel taxes and bond measures may directly fund schools, but are relatively modest sums, specifically earmarked, and often only for a set time period.

 

What are the sources of revenue for the public schools? 

The sources of revenue for the 2021-22 Lafayette School District budget are outlined below: 

  • Total Revenue: $50,263,937

  • LCFF: 61.5%

  • Federal: 2%

  • Other State: 10%

  • Other Local Revenue/LPIE: 4% ($2,020,851)

  • Other Local Revenue/Parcel Taxes: 15.5%

  • Other Local Revenue: 7%

  • Total Other Local Revenue: 26.5%

 

What is the process for allocating LPIE’s annual fundraising to the schools?

  1. Each year, the School Districts identify annual program priorities following State requirements and with input from parents, principals, and the community.

  2. Schools receive Government funding based on the LCFF formula. The statewide budget is often inconsistent and varies year to year proving very challenging. 

    • To supplement underfunding, the Lafayette community has developed budget relieving tools. Every year these funds prove crucial in filling in shortfalls. These tools include LPIE annual fundraising, Parcel Taxes, and the new LPIE endowment. 

  3. In conversation with LPIE, the Districts determine the allocation of the donated funds.

  4. LPIE directs the money to the Districts where it is distributed to pay for salaries, programs, and supplies for all grades at all our public schools.


 

How common are public school education foundation endowments? 

 

 

 


 

Additional Reading and Resources 

LPIE: Video on Challenges Facing Lafayette School District Funding 

KQED; California Report: How Proposition 13 Transformed Neighborhood Public Schools Throughout California

Policy Analysis for California Education: California’s Education Funding Crisis Explained in 12 Charts

Public Policy Institute of California: Financing California’s Public Schools

Ed100: More Money for Education: What Are the Options?

Ed100: Who Pays: Where California’s Public School Funds Come From

California Department of Education: Education Budget

EdSource: California’s New Budget Includes Historic Funding for Education