What is a Public High School Endowment?

“Raising Excellence” LinkedIn Newsletter Issue June 11, 2025

"I’ve Never Heard of a Public High School Endowment?”

Most people associate endowments with elite universities or private schools. While you likely know that your college has an endowment, and perhaps your child’s private school, you may wonder how it works at a public high school and how an endowment fits in with the tax revenues that go towards education.

How It Works

An endowment is a permanent pool of capital that generates a return each year, which the beneficiary school may use to support programs, scholarships, and other priorities that otherwise might go unfunded. When someone donates to a school’s endowment, the gift is pooled with others and invested according to a long-term strategy, typically a diversified mix of stocks, bonds, and private investment vehicles designed to balance growth with stability. Each year, a small portion of the fund, usually up to 5 percent, is deployed from the endowment to support the school, its needs, and its students. If the return in any given year is above the distribution amount (5%, in this example), these earnings are reinvested, allowing the endowment to grow and compound. This approach ensures that endowment donations can provide steady, annual support forever. Over time, the endowment becomes a self-sustaining financial resource that helps schools navigate economic shifts, go above and beyond in the classroom, and plan for the future.

Why It’s Needed

Schools often operate within tight budgets and shifting priorities. State funding, local taxes, and district budgets can only stretch so far and are often vulnerable to cuts. When donations come in, they’re typically spent within the same year. But what happens when a program needs sustained support over the long term? That’s where an endowment comes in. It creates permanent stability within a school, ensuring that vital programs like college advising, the arts, teacher development, or athletics aren’t dependent on annual fundraising or volatile budgets.

How It Works within a Public School

Public school endowments function just like those at private schools and universities – they are just less common. Funds are raised and invested, and a small portion is distributed each year to support school needs. Because building and managing an endowment takes specialized knowledge and long-term commitment, most public schools have never had the infrastructure to create one. That’s where The Endowment Project Foundation comes in. We provide the financial and operational infrastructure that enables schools to focus on students, not a fundraising strategy or investment returns.

For example, a $1 million endowment with a 4 percent annual payout can provide $40,000 every year, forever, without ever spending the principal. With modest assumptions, that $1m initial endowment can be worth over $100m in 100 years, which would provide $4m in incremental funding for that school each year. That consistent, predictable stream of funding allows public schools to be proactive rather than reactive, planning for long-term improvements in academics, arts, athletics, and beyond.  A true long-term solution to improve the future of our education system.

“Don’t My Tax Dollars Fund Public Schools?”

We often get the question, Don’t my tax dollars fund public schools? And the answer is yes, but not fully. Endowments are not a replacement for tax dollars; they are a supplement that creates long-term opportunity and resilience and improves the experience for teachers and students.  Think of it this way: universities and private schools use endowments to offer scholarships, recruit great teachers, and provide world-class facilities. Why shouldn’t public high schools have access to the same kind of lasting support?

Want to Learn More?

Have questions about endowments or how to start one at your public high school? Please reach out to us!

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