Category Archives: Strategic Planning

How One-Time Funds Can Help or Hurt Your Organization

Photo courtesy of Allison Shelley for EDUimages

As recent news broke of several major gifts to K-12 organizations from philanthropist MacKenzie Scott, many education organizations and nonprofits, such as Communities In Schools, Latinos for Education, and NewSchools Venture Fund, among others, may suddenly find themselves in the unique and enviable position of determining how to prudently spend an unexpected windfall. This comes as many school districts across the country received one-time infusions of K-12 funding from the federal government’s American Rescue Plan Act of 2021 through the Elementary and Secondary School Emergency Relief Fund.  

With a network of ed sector clients across the country, Bellwether is often approached to advise on spending strategies, sustainable financial modeling, and strategic ways to make these funds stretch, impact communities served, and, importantly, last. Our team approaches this issue from a diverse array of viewpoints, offering a range of recommended practices and tips to strategically approach one-time funds and avoid common missteps.

Rebecca Gifford Goldberg, partner, Strategic Advising

Recommended practices:
First and foremost, take a moment to celebrate any gift as an affirmation of the work with communities, families, and young people — particularly during this extraordinarily difficult time to lead in the education sector.

Second, recognize that this is a one-time gift and not a source of ongoing capital. What are the things this funding enables you to test about broadening and deepening impact, centering community and family voice in decision-making, and/or improving long-term financial sustainability? Does this give you the chance to expand more quickly with quality? Explore whether there’s a different way to reach students (or families, or educators) you want to test, or a different way to deliver your service or product. Build in mechanisms to evaluate the work and grow your organization’s own capacity to measure progress.

Third, consider ways to use these funds to make the lives of staff members a little bit better or easier. Involve the team’s input into spending plans that best meet their needs. This could be hiring some short-term contractors to take on urgent priorities, investing in professional development, offering staff members access to mental-health supports, or supporting extra vacation days off this year. 

Finally, invest in your reserve. Allocating a portion of unrestricted one-time gifts toward that rainy day fund isn’t flashy, but is a sound investment in the long-term financial sustainability of your organization.

Potential pitfalls to avoid:
Three things stand out to me as cautionary approaches to spending one-time funds: 1) don’t increase your per-student cost or operating costs without a clear path to financial sustainability; 2) don’t forget to engage community stakeholders in a conversations about how you’ll use the money; and 3) don’t spend it all in one place!

 

Anson Jackson, senior adviser, Academic and Program Strategy

Recommended practices:
One-time giving affords single-site schools and school networks a range of exciting opportunities. Knowing where to start and prioritizing strategic decisions along the way is critical. It’s important to ask yourself and your organization: what can one-time funding buy us today to better enable using recurring funds in the future for something else. Make strategic trade-offs with the long game in mind.

  • Allocating funds for adult learning and professional development across entire teams is a smart investment. This is especially true during the COVID-19 pandemic as schools face a variety of virtual learning and technology challenges that impact all areas of a school building, from instructional teams to operations staff. And carving out funding to give adults in the building stipends for additional duties during the pandemic is advisable.
  • Similarly, strengthening learning and engagement for families as partners in student learning is critical. During the pandemic, this could mean allocating funds to offer short-term workshops on how to use technology. Funds can even be used to directly support the short-term technology needs of current families who may not have access to laptops and devices they’ll need to use throughout the pandemic.
  • Supporting time-bound interventions that can close a gap for good is a prudent use of one-time unrestricted funds. Consider using funds for interventions like learning loss and social-emotional learning recovery during the pandemic.
  • Applying funds toward infrastructure is often a good way to start setting a foundation for future projects and funds down the line.
  • Using one-time funds to purchase books and materials that will be used long after funds are dispersed can build up your single-site school or school network resources. 

Potential pitfalls to avoid:

  • Using one-time funds to hire additional staff without considering time constraints on their tenure presents downstream challenges (e.g., don’t hire interventionists for two years if you don’t want to lay them off once funds are gone).
  • When allocating funds to invest in interventions and/or programs, think about the longer-term ongoing costs associated with technology licenses, tools, management, upgrades, staff support, internal knowledge management, and more. Build that forecasting into any spending plan and be sure to budget for down the road.
  • Forgetting to be thoughtful about waste is detrimental. Having $1 million in one-time unrestricted funding doesn’t automatically mean you can get everything. Be mindful of resources you use and devise a strategy to use them. Have a resource, tied to a priority, tied to a strategy, tied to a clear timeline and set of goals.

 

Andrew Rotherham, co-founder and partner

Recommended practices:
I bring less a recommended practice than a recommended caution. The idea that a sudden influx of money ruins lottery winner’s lives is overstated. Still, it does happen. And the education sector has money absorption habits that make the most profligate lottery winner seem downright Scrooge-like. 

You have to believe one of two things: all billionaire philanthropists are simply greedy or it’s actually challenging to give away a lot of money responsibly. Why? Because many people who are seeking to give away the bulk of their fortune are nonetheless struggling to do it thoughtfully. It’s possible MacKenzie Scott is pointing up a grantmaking strategy that was out there in plain sight and will be transformative. It’s also possible other philanthropists know something, too. 

It’s fashionable lately to say that those closest to problems always know best. It’s unfashionable to point out that’s no more an iron rule than the idea that experts and those distant from problems can just swoop in and fix things. Most thorny stubborn social policy problems are more situational and complicated. 

All this might sound like a rationalization or justification for hoarding money, it’s not. I’m all for the super-wealthy giving away their money — and wish more would put philanthropy toward the kind of high-risk/high-reward pursuits the government is ill-suited to take on. But, large gifts can also lead to displacement and, in edge cases, cause or enable chaos as some of Scott’s are alleged to. A more pedestrian risk, conversely, is how the education sector has shown time and again an ability to absorb huge sums of public and philanthropic money with little change left behind. 

More resources can often drive positive change for organizations. And I’m not trying to be cute. We surely wouldn’t say no to Scott largesse. It would be impactful. Bellwether, and many other organizations focused on inequity could use this kind of financial support. But being cautious and appreciating the real risks must be part of the calculus, so we’d see such support as a risk as well as an opportunity.  

Won money spends better than earned money, and I’d argue something similar is true of found money. So, you need to be planful. My colleagues make some valuable suggestions here. I won’t repeat those, but here are a few guideposts for organizations (and some that apply for philanthropists as well):

  • Focus on your north star. How will this money help you achieve your goals? How will you curb an additive desire to immediately tack new goals onto the funding?
  • Pause and plan. Carpenters say measure twice and cut once, and that’s sound advice especially with the pressure of a huge financial gift.
  • Make sure your governance and systems are robust enough to absorb a huge unrestricted gift — money can help solve problems, it can also expose them.
  • Think long term and consider ways to leverage this money over time rather than only considering it as a one-time spend.

Potential pitfalls to avoid:

  • Resist the urge to rush into new things.
  • Don’t try to “prove” this money “works” or fits a narrative. That’s someone else’s problem. Instead, make the money leverage results for whomever your organization serves.
  • Just as Hemingway said of bankruptcy, mission displacement happens gradually, then suddenly. Keep a close eye on the “why” behind your work and your line of sight to the change you seek.

 

Alex Cortez, partner, Strategic Advising

Recommended practices:
Education organizations receiving support from MacKenzie Scott have just been blessed with the one thing virtually no organization ever gets funded to do — build their capacity and the power of the communities they serve to drive systems-level change.

Systems change involves investing in efforts to shift a combination of mindsets, relationships, and power to shift policy, practice, and resource flows. Education entrepreneurs have learned repeatedly that it isn’t enough to simply be well intentioned and get results to transform education systems, because education systems are not usually rational systems but rather political systems composed of a complex web of money, power, interests, and values. Most education innovations require disrupting the status quo of systems to get to scale, and systems are very good at preserving their status quo.

Further, systems change isn’t the thing that most education philanthropy funds — even as it’s the very thing education innovations need to be transformational. Funding systems change requires being unapologetic about power; it’s not linear but rather cyclical, and it’s not a marathon nor a sprint, but rather a commitment to walk 10,000 steps every day (which is counter to the usual narrow timeline of philanthropy).

With this kind of one-time unrestricted gift, education entrepreneurs can make an investment in systems change and on a timeline that many have never been able to pursue until now. However, doing this isn’t easy, and an additional challenge leaders will need to overcome, even with this gift, is wrestling with whose power they’re building, and towards what agenda. If education leaders and entrepreneurs are truly committed to changing systems, they have to invest in informing and organizing a community of students and parents so that they can exercise their innate power — individually or collectively — to craft the agenda for change, drive it, and sustain it.


If you have questions about one-time gift strategy and financial forecasting and modeling, please reach out to Rebecca Gifford Goldberg at
rebecca@bellwethereducation.org.

(*Editorial note: Communities In Schools and NewSchools Venture Fund are Bellwether clients.)

Designing From the Margins Toolkit: Three Ways to Solve Problems Facing Young People

Young people facing disruptions to their education need support and guidance to meet their goals. But too often, the systems meant to support young people at the toughest moments of their lives end up frustrating and burdening them as they navigate a complex bureaucracy. Leaders working within these systems can see the challenges young people face, but they get stuck, because creating change within and across large organizations is difficult.   

A different approach to problem solving can help communities get unstuck within and across schools, nonprofits, and other child-serving organizations. This week, Bellwether released Designing From the Margins: Tools and Examples for Practitioners to Address Fragmentation and Build Equity Into Systems Design. The downloadable toolkit draws on Design Methods for Education Policy and is aligned with our Continuous Improvement in Schools Workbook, but is created specifically for local leaders who might be new to tackling human-centered design from start to finish. It includes tangible examples and facilitation strategies for collaborative problem-solving processes based on our work with communities across the country. 

Designing From the Margins centers young people and families with the most serious and concentrated needs to make inclusive solutions for everyone. By taking this approach, problem solvers focus on equity from the start, and focus on the voices and perspectives of those experiencing problems directly. 

Here are three ways schools, foster care systems, homeless shelters, and health care providers, among others, can use the toolkit:

1. Engage Young People and Families in Identifying Problems

What problems need solving right now? In order to answer this question, you should go to the people experiencing issues directly. This toolkit focuses on improving systems serving young people. In our work, we used techniques like empathy interviews to hear from young people about their experiences and unmet needs. We prioritized young people with severe disruptions in their lives and education, such as incarceration or homelessness, in order to hear how systems served (or failed) those with the greatest needs. The toolkit can help you create a plan to collect these perspectives and reflect on them in a structured and coherent way. 

2. Structure a Collaborative Problem-Solving Process

Organizations serving young people often operate under great stress and uncertainty. This can make collaboration difficult. For example, a leader of a community nonprofit might consider another organization to be a competitor for funding or enrollment, rather than a potential collaborator serving overlapping groups of young people and families. The Designing From the Margins Toolkit gives tangible examples of ways to build a productive, cross-organizational working group that centers on the needs of young people, which includes building relationships among participants who might not work together frequently. 

3. Plan for Better Implementation Through Monitoring and Continuous Improvement 

Even great plans can fall victim to incomplete or insufficient implementation. The problem-solving cycle described in Designing From the Margins includes an emphasis on concrete implementation plans, with clear metrics and owners each step of the way, along with a framework for implementing continuous improvement cycles of monitoring and evaluation once solutions are put in place. 

Click here to read and download Bellwether’s Designing From the Margins Toolkit, and visit Bellwether’s Lost by Design website to learn more.

ICYMI: Is There or Isn’t There a Looming Fiscal Cliff for Education?

Throughout the past month, Bellwether has weighed in on the financial health of schools in light of the COVID-19 pandemic, with different reactions, resources, and recommendations from across our team. In case you missed it, here’s a quick recap: 

You can read all the posts in the series here, and we welcome your reactions! Thanks for following along.

To Keep Cuts Away from Kids, Districts Must Use These Two Financial Levers

On top of immense public health and learning challenges, school districts are grappling with  critical questions about their financial future. What are the magnitude of state and local revenue shortfalls? What is the cost to fund new public health measures, social-emotional and mental health supports, and necessary academic interventions? Will there be additional federal stimulus funds to support education?

Even amid uncertainty, districts need to carry out proactive planning processes that ensure their spending remains aligned to their long-term (three to five year) strategic priorities, especially the initiatives and services that support students with the highest needs.

From our work supporting schools through earlier crises, we observed that that “urgent” budget cuts sometimes resulted in focusing too much on finding smaller short-term savings within district budgets. For example, if a district has a long-term goal around improving early elementary literacy outcomes, making cuts to literacy coach staffing may save needed dollars in the immediate term, but will put long-term outcomes at risk. By considering budget cuts in the context of strategic priorities, leaders can minimize the adverse impacts of funding shortfalls on students while maintaining momentum towards their desired future state.

Yesterday, my colleague Jenn answered common questions about whether and how changes in state revenue will impact school funding. If those changes in state revenue do have negative impacts, districts will likely need to make cuts to their operating budgets. Today we propose that districts need to both consider reductions to ongoing spending and adjustments to strategic investments. Leaders can combine the set of options outlined below to mitigate financial loss in a way that minimizes adverse impact on students, especially those with the greatest needs.

1. Reductions to Ongoing Spending

Districts will need to consider spending reductions that minimize the negative impact of COVID-19 on their strategic direction. Continue reading

The Looming Financial Crisis? Resources for the Education Sector

Efforts to lift economy could tip off a financial crisis.” School districts brace for cuts.” Will the Banks Collapse?

With headlines like these making the rounds, there’s no way to avoid questions about how the COVID-19 pandemic has and will impact the economy — and in turn, America’s schools. The uncertainty is very real, and the consequences could be as well, but how can education leaders make sense of often contradictory and evolving prognostications? And if the impact won’t be catastrophic, what is the more complicated outlook?

At Bellwether Education, we’ve worked with schools, CMOs, districts, states, and nonprofits to understand this moment, and have begun to build an understanding — unpredictable as this moment is — of where our sector is headed fiscally, how organizations and policymakers should respond, and the key variables to keep an eye on. We understand how school funding works, from the federal budget process to state legislatures to local levies, and we’ve coached hundreds of clients on planning for and through financial uncertainty. 

In this new series, The Looming Financial Crisis?, we bring our policy chops together with our practical experience with districts, schools, and networks forward to share perspectives on how a financial crisis might play out and where impacts will be felt. Some questions we’ll explore:

  • Where does school revenue come from, what do we know about how the economic downturn might affect lower income communities? 
  • How can districts and schools carry out short-term and long-term planning amidst uncertainty, while prioritizing students furthest from opportunity?
  • What are the potential impacts on private school operations, especially those private schools dedicated to serving high-need students?
  • Will an economic downturn lead to increased interest in charter school mergers, and how should school leaders approach these potential partnerships and their impact on students and school communities? 

We’re here to cut through the noise so the education sector can navigate the uncertain future as effectively and efficiently as possible. Follow along as we roll out insights targeting school districts, state education agencies, individual schools, charter networks, and more.