NBOA President and CEO
For much of my career in independent education, government funding played a limited role in the financial model of most independent schools. Some schools, particularly those serving students with specialized needs, pursued public funding when those resources helped them serve students. For many others, accepting public dollars raised questions about mission, autonomy and government oversight and intervention.
The landscape has changed. Some states have expanded school-choice programs, and the federal government has now entered the conversation through a new scholarship tax credit via established scholarship-granting organizations (SGOs). More independent schools now face a once-distant question: whether and how to participate in programs that direct public or tax-advantaged dollars toward independent PK-12 schools. A source of additional financial support for families and revenue for schools that many find very enticing.
NBOA is are always working to understand what new legislation means for independent schools and to advocate for implementation that expands opportunity while protecting school autonomy. The question for school leaders is not simply whether outside funding is available. Each school must consider whether a particular program fits its mission, finances, governance and capacity, and what obligations accompany the funding.
What We Know About Participation
Two recent studies provide useful context. The first, “Which Types of Private Schools Participate in K-12 Education Choice Programs?,” surveyed leaders of 473 private schools in 31 states with choice programs. About two-thirds (63%) reported participating in a choice program, but participation often came years after programs launched. Only 43% of participating schools entered when their state program began, while another 40% waited an average of 7.35 years.
I spoke with my friend and colleague Damian Kavanagh, co-author of both studies and president and CEO of the Mid-South Independent School Business Officers (MISBO), to gain his informed perspective. He believes schools wait because participation requires more than a financial calculation; it raises “questions of mission, governance, institutional identity, regulatory risk and sometimes simply uncertainty about how a new program will work.”
The better strategy is probably not ‘jump in’ or ‘stay out.’ It is to do the homework early. Understand the program, identify the risks, decide what your institutional guardrails would be, and then make a deliberate decision.
A decision about public funding can affect financial aid, admissions, administration and governance. It can also raise questions about what a school may have to change in return for the funding.
Kavanagh doesn’t recommend waiting by default. “The better strategy is probably not ‘jump in’ or ‘stay out.’ It is to do the homework early. Understand the program, identify the risks, decide what your institutional guardrails would be, and then make a deliberate decision.” I concur.
The study also found that schools charging more than $20,000 were significantly less likely to participate, as were smaller schools. Kavanagh believes higher-tuition schools may have more financial flexibility and therefore less immediate incentive to accept the uncertainty that can accompany public funding. Smaller schools may face a different problem: administrative capacity. “A school with 150 students and a very lean business office may simply have less bandwidth to take that on, even when the dollars could matter a great deal.”
Accountability and Autonomy
The second study, “How Do Government Regulations Affect Private School Decisions to Participate in Choice Programs? Experimental Evidence from a National Sample,” reinforces that point. In the researchers’ survey experiment, adding hiring, admissions or testing requirements reduced private school leaders’ willingness to participate.
For independent school leaders, the concern goes beyond today’s requirements. What happens if the requirements change? Kavanaugh understands this sentiment, but cautions against treating hypothetical future regulation as though it already exists. “The governance challenge is to separate present requirements from future possibilities,” he said. Schools should understand the regulations that exist today, identify their institutional non-negotiables and remain alert to how requirements may evolve.
Private schools are private for a reason, and when you start to make them look more like public schools, they lose their character, they lose the purpose that they serve. We don’t want to get into a situation where we are driving schools away from participating.
Dan Dodd, executive director of the Ohio Association of Independent Schools (OAIS), expects pressure for additional oversight to grow as more public money flows to private schools. “As the amount of money going into private schools continues to increase, there is naturally going to be a push to say, ‘Well, you’re getting more money, you should be getting more oversight.’”
He monitors this angle closely. “Private schools are private for a reason, and when you start to make them look more like public schools, they lose their character, they lose the purpose that they serve,” he said. “We don’t want to get into a situation where we are driving schools away from participating.”
Cautionary Tales
NAIS’ published guidance on educational opportunity programs takes a similarly measured approach. School leaders should consider whether a program:
- Preserves operational, governance and instructional structures.
- Allows schools to maintain hiring and admissions policies.
- Provides stable funding.
More recent NAIS work has placed school choice in the broader context of mission, access, financial sustainability and independence.
Those considerations matter even more as the federal program changes the landscape. The Hechinger Report recently noted that public-school foundations and districts in states that opt into the program can use SGOs to raise money for certain public-school expenses, including tutoring and transportation. The new tax credit therefore creates opportunities beyond private school scholarships and could give public schools another source of philanthropic support.
That broader reach is worth noting because it moves the conversation beyond a simple public-versus-private debate. The new federal program may affect how families access education, how schools raise money and how donors think about supporting education across sectors.
At the same time, existing voucher programs are a reminder that funding and accountability remain closely connected. ProPublica, for example, has recently reported on Wisconsin private schools that rely heavily on taxpayer-funded vouchers while facing fewer transparency and governance requirements than public schools. Even when their own circumstances look very different, school leaders would do well to ask: What level of public accountability should accompany substantial public financial support?
The Wisconsin example does not speak to every state or every independent school. Choice programs differ, and so do the schools that participate in them. But the cautionary tale reinforces the need for boards and school leaders to understand exactly what they are accepting, what obligations accompany the funding and which elements of school governance they want to preserve.
Lessons From Ohio
Ohio offers a useful example of how these decisions can play out over time. Dodd, a former state representative, has watched Ohio’s choice programs develop from both sides of the legislative process.
Ohio independent schools now participate in a range of public programs. But Dodd says that experience has reinforced a fundamental concern about public funding. “The big issue that we have had is that there also tend to be a lot of strings attached.”
Testing has been one of the most significant issues. As Ohio’s voucher programs have expanded, more OAIS schools have participated, but participation has also meant accepting state testing requirements. Dodd has worked to create alternatives that allow independent schools, in some circumstances, to use assessments they already administer.
That experience has led OAIS schools to distinguish between different forms of public support. Members created the OAIS Scholarship Granting Organization after Ohio established its SGO tax credit in 2021. Dodd says virtually all OAIS schools now participate in the SGO, compared with roughly half participating in the state’s voucher programs.
“A lot of our schools are seeing the benefits, especially because as a tax credit program, you do not run into the same types of testing mandates and other types of requirements that follow direct funding from the state.”
The Decision Each School Must Make
For some schools, outside funding may provide an important way to make an independent education accessible to families who otherwise could not afford it. For others, the financial benefit may not outweigh the administrative burden or the potential effect on institutional autonomy. A school's tuition level, financial-aid needs, enrollment, staffing and capacity all shape the calculation.
The question isn’t simply whether an independent school accepts outside funding, but what happens once the school moves forward.
Kavanagh believes the next phase will tell us more about the long-term consequences of these programs. “What interests me most is not simply whether schools participate, but what participation changes over time: who applies, who enrolls, how financial aid is deployed, whether schools become more accessible, and whether their business models begin to shift because a new source of revenue is available.”
The question isn’t simply whether an independent school accepts outside funding, but what happens once the school moves forward. Does the funding advance the mission? Does it expand access? What obligations accompany the money? And which institutional principles are non-negotiable?
Those are questions each school and its board will have to answer as these programs continue to expand. The message is simple: Consider how the many facets of participating in state or federally funded programs may impact your school and discuss them fully with your school’s administrative leadership team and board of trustees. If you collectively move forward, pay close attention to any regulatory changes. Opportunities such as these require a whole-school leadership approach, before, during and after moving forward, and business officers can provide a critical voice in these discussions that balance the acquisition of useful financial resources with the risks. You got this!
Jeffrey Shields, FASAE, CAE
NBOA President and CEO
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