PTA Equity Project: An Experiment in Re-distributive Economics

Somewhere there is a Econ Grad Student that needs to call me

FOIAGRAS is a free newsletter run by Tom Hayden (FOIA GRAS LLC) that explores various topics in local Evanston Governance, especially around ETHS and School District 65 (Evanston/Skokie). I publish and share all my data and reports. Subscribing is free, so please subscribe or share.

---

There’s a saying from Justice Louis Brandeis that states are “laboratories of democracy.” Well, hold on State of Illinois because I’m going to tell you a story about your local PTA as the true laboratory of democracy.¹ This is technically part 2 of a story I started back in December 2022, you can read that if you want, but I’ll summarize the timeline below:

• Pre 2020: The PTAs in District 65 are all run as individual entities within the individual schools. Reserves are maintained by the individual PTAs. Some schools have as much as $60,000 in reserves.

• Pre 2020: The PTA Equity Project exists as an experiment that is funded by the Evanston Community Foundation and the funds are managed by Foundation65.²

• March 2020: COVID

• April 2020: PEP Fund requests a 75% payment of all PTA reserve funds to be used for COVID-relief purposes. All PTAs vote to approve, my prior work tells the story of how it went down at Walker.

• June 2020: Management of the fund is transferred to the Evanston Community Foundation.

• November 2020: PEP Fund requests that PTAs commit all their reserves (minus $5000) to the PEP One Fund, who will then manage how money is distributed and spent. All PTAs vote to approve but this was more heated, you can read the meeting minutes for the Walker PTA.

• August 2021: The first Distribution to PTAs happens. I’ll explain what this means below.

PEP Fund Operations

Here is how the system works:

• In August of each year, the PEP Fund takes their pile of money and calculates how to distribute to the individual PTAs. They use a model they call “equality/equity” that does some math so that the PTAs of schools with more free lunches get more money.

• The PTAs now have money. They can spend it on whatever but fundraising must go through the PEP Fund first. ³

• Everyone does fundraising for the PEP Fund only. You can see booked is doing a fundraiser for PEP right now.

• In July of each year, the PTAs give their pile of money back and we begin anew.

So the next question is, we’ve been doing this for 3 years - what does the overall pile of money look like? Well, there is limited amount of data available but I do have three years of records from public documents.

Roughly, you can see the pile of money is shrinking. In August 2021, the fund had $483k and today has about $100,000 less. On average, the PTAs spend about $60,000 per year ($100/head) and total fundraising is only around $35,000/year.

One piece of information I have still not been able to ascertain is: how much money did the PEP Fund have in November of 2020, when they received the reserves of all individual PTAs? The only source of information on this is the Evanston Community Foundation Annual 2020 Financial Report, which shows $518,910 in net assets.⁴

Net Assets as of 12/31/2020

So in total, the funds started with $518,910 and are now down to $397,050, which is a 23% decrease in total assets. Basically, they’re burning through the reserves that were collected prior to 2020 and turned over to PEP. At a burn rate of about -$25k per year, they have about 15 years before the reserves are gone.

At that point, the funding per student will drop by half, from $100/head to $50/head just for the fund to break even. Of course, they could mitigate this by fundraising more money and slowing the burn rate.

I think it’s fair to say that the jury is still out on the sustainability of the funding model.

Discussion

I think this leads to a really interesting discussion in economics and re-distributive politics. I think the following statements are true (feel free to argue in the comments)

• In aggregate, Evanston PTAs are Poorer. The shift to this system ended local PTA fundraising events and created a fair amount of resentment. The best performing fundraisers stepped away and quit the PTAs.⁵

• Funding is distributed more equally. I don’t think there is any doubt about this, that schools which had no or low funding for PTAs now have it. The “equity” portion of the distributions, I think, results in pretty minimal school-to-school differences.

• Fundraising is Harder: The marketing shift required to go from fundraising for your child’s PTA to fundraising for someone else’s child’s PTA is a much harder sell. You can only do so many native plant and bookstore promotions; you need to convince people with big checkbooks to donate.

• This required a big pile of startup money to work. If they didn’t have the half million dollars in the bank to start with, none of this would’ve really worked because they’re subsidizing the whole thing with reserves now. It is also worth noting that this big pile of money was raised in a different era - the donors of that money were funding their local PTA, not the PEP fund.

• It’s debatable whether this would’ve passed if not for COVID: If you read the PTA meeting notes, I get a sense that there was a certain amount of wanting to help with COVID but not knowing how and this seemed like a good avenue.

Lastly, I still contend that this effort being led by active board members was a conflict of interest. According to the District 65 website, in November 2020, PEP fund leaders Suni Kartha and Biz Lindsay-Ryan were school board members at the time. You can listen to an hour long interview on PBS below with Ms. Kartha and Ms. Lindsay-Ryan to get a sense of their motivations, which are clearly rooted in wanting to fight for a specific vision of equity. They were trying to solve a very real and well-studied problem - inequality in PTA funding.

However, a conflict of interest doesn’t require a specific intent. They were coming from a position of power. Consider that the School Board is currently assessing which schools to close. This puts the PTA members in an incredibly awkward position - do we turn over the PTA reserves to a project run by board members or potentially make powerful enemies that can impact their children’s lives in a big way?

1. I think it’s debatable whether the true laboratory of democracy is the PTA or your local HOA.

2. Details according to the Evanston Community Foundation Grants page:

$50,000 – Program: ECRRF Immediate Needs, Category: Children and Families
Basic human needs for 630 District 65 families, managed by school principals and social workers. In collaboration with Evanston/Skokie Council of PTAs, individual District 65 school PTAs, Foundation 65, and Evanston Baseball & Softball Association

$14,000 – Program: ECRRF Immediate Needs, Category: Children and Families
Collaboration with PTA Equity Project and Foundation 65 to provide 200 laptops to District 65 students. Tech support available through District 65 and Evanston Public Library

3. The implication of this is that things like “Raise Money for Sick Teacher” are not permitted because that money doesn’t go through the PEP Fund first. I can’t verify this fact, but I believe it to be likely true.

4. It also shows $97,317 in net assets with donor restrictions, but I am unsure if that is included in the $518,910 or not. I’ve asked the ECF for clarification and got no reply.

5. As a child of the 80s, this is what my parents always told me about the soviet union - it wasn’t sustainable because the centralized command and control model took too much decision-making power away from locals and wrecked the incentives.