This is part two of a two-part series on school choice expansions and investable opportunities around the country. Read part one here.
Since 2020, the school choice movement has been a resounding success. The number of nonprofit organizations supporting these reforms beyond the policy realm has surged. But even as school choice victories have mounted, and thousands of new families flock to alternatives to the traditional public school system, the movement faces two big hurdles: capacity building and anti-school choice litigation efforts.
Thankfully, philanthropy can lead the charge in addressing these issues and finding solutions. Even as donors have unique opportunities to support efforts to connect families with their school choice options, as covered in a recent Roundtable article, the lesser-known peril of a lack of supply of private schools is pressing. As states approve new school choice laws, anti-school choice forces lie in wait to file suit. In many cases, these suits are unsuccessful. But in some cases they are, and they all drain resources that could otherwise be put into classrooms.
But there are solutions.
“We need to support education entrepreneurs who have a vision to launch or expand a private school model, and we need to ensure that there’s an ecosystem in which their organizations can grow and thrive,” notes Mark Gleason, managing partner of the Drexel Fund, a nonprofit venture philanthropy fund that fuels the creation of diverse and innovative private schools.
Efforts to expand school choice are often driven by grassroots groups of families who desire a broader range of options for their children’s education. As more states adopt school choice and word spreads, demand among everyday Americans will continue to grow.
“This is a movement of low- and middle-income families,” says Meredith Olson, president of VELA Education Fund. “It’s a movement of families who are pursuing an alternative for their kid that’s private and might be delivered differently.”
Now is the time to focus on protecting school choice and making it more widely available nationwide. Donors can make a difference by supporting capacity-building and litigation efforts.
The capacity challenge
With each expansion of school choice, the demand for more diverse schools and additional seats in choice schools grows at a fast pace. In many cases, demand is outstripping supply. But nonprofits and donors in key states and nationally are working on solutions.
One of the best examples of philanthropy making a difference in school supply is the aforementioned Drexel Fund. The fund provides grants to support the creation, expansion and replication of private K-12 schools that serve low- and middle-income students. Grants support new school startup, network expansion, strategic growth planning and early-stage research and development.
The fund invests in schools that are pioneering approaches and filling educational gaps in their communities. This support is offered in states with education savings account or voucher programs, helping ensure the sustainability and growth of these educational institutions.
“Once these programs are created legislatively, in a lot of states there then can be a rush of demand from families wanting to seek out private school options using their education savings account or other scholarship funding. And in a number of cases, there’s just not enough already existing supply to meet their needs,” says Gleason.
To illustrate the problem, Gleason points to Florida, one of the nation’s most successful states for school choice programs. As recently as two years ago, around 50,000 students enrolled in the state’s Education Savings Account were waitlisted for private schools due to a lack of open seats in their communities.
“There is a supply-demand gap in Florida, and we’ve seen it in other states as well,” Gleason says.
Gleason identifies accreditation issues as a potential obstacle for new schools coming online. While most states require a school to be accredited before its students can receive an ESA scholarship, the majority have ensured new schools can be ESA-eligible during the accreditation process, which can take several years. When that isn’t the case, and accreditation must be completed before the school can receive ESA funds, school founders aiming to serve families of lesser means find themselves in a bind.
“That becomes a chicken or egg problem for new school funders who want to serve a low-income community quickly,” says Gleason.
Even in states that allow new schools to access scholarship funding without full accreditation, provided they follow specific rules, sometimes the payments’ cadence is such that new schools end up with cash flow problems.
For Drexel, the results have been impressive so far, with 97 new schools and 23,862 new seats created over the last decade. Seventy-six percent of students are from low-income households, while about 10% of students have special needs. Currently, portfolio students draw $135 million annually in stable-enabled scholarships.
Another example is the VELA Education Fund, a nonprofit organization that supports entrepreneurs operating innovative learning models beyond traditional systems, serving families forging their own learning paths.
“We see this vibrant activity happening in what we describe as the out-of-system space, which is the intersection between what used to be traditional homeschooling and traditional private schooling,” says Olson. “This marketplace of low-cost private schooling is accessible, diverse, modern, fresh and led by communities, parents and the founders we support.”
VELA provides early-stage funding, community support and resources to these innovators, fostering a diverse range of educational approaches such as micro-schools, hybrid homeschools and cooperative learning communities. By investing in these alternative models, VELA seeks to empower families and learners, encouraging creativity, collaboration and adaptability in education.
The litigation challenge
“Getting school choice programs passed in legislatures is really only about a third of the battle,” says Thomas M. Fisher, vice president and director of litigation for EdChoice Legal Advocates, an organization carrying on Milton Friedman’s legacy of advocating for school vouchers. “Another third is implementation—getting people to use them. The final third is defending them.”
With every policy win, there is a need to ensure these programs are legally defended from challenges made by school choice opponents. Every setback in the courts raises concerns about the future of education freedom.
Some recent examples of challenges in the school-choice arena take us to Montana, where lawmakers created a special needs ESA program in 2023 to provide families the opportunity to access needed supports such as tuition, curriculum, transportation, therapies and more. Before the program could launch, opponents sued, trying to stop it.
EdChoice Legal Advocates stepped in to represent lawmaker and mother Sue Vinton, who sponsored the legislation after being inspired by the success of her now-adult son, Jake, who has Down Syndrome. Fisher and his team have already scored an important victory in the case, successfully resisting an effort to get the judge to stop the special-needs program before it even started. But the case is still pending in court.
EdChoice has mostly participated in legal matters through amicus briefs over the past 30 years. However, they have now started directly representing parties in litigation, a role previously dominated by Institute for Justice (IJ).
IJ has focused on defending school choice programs, including federal and state issues, and achieved significant legal victories. Over two decades ago, IJ successfully defended Ohio’s first school choice program before both the Ohio Supreme Court and the United States Supreme Court. In that case, Simmons-Harris v. Goff, the Ohio Supreme Court held that school choice programs were consistent with the state constitution.
Rejecting the argument that the Ohio constitution implicitly forbids alternatives to the public school system, the court said Ohio could provide additional educational options. The United States Supreme Court similarly protected school choice under the U.S. Constitution in the historic decision Zelman v. Simmons-Harris.
IJ eventually opted to transfer responsibility for defending parents on school choice matters to EdChoice. The result was the creation of EdChoice Legal Advocates, led by Fisher—the former solicitor general of Indiana—and other newly hired legal professionals, to continue defending school choice programs. The organization is already actively involved in litigation, including the ongoing case in Montana as well cases in several other states where it works alongside IJ to represent parents and defend school choice.
According to Fisher, it’s essential for families who benefit from school choice programs to show up in court.
“They drive home just how important the programs are, who benefits from them, what will happen if they go away and all the negative consequences that follow,” he says.
Fisher also says a victory in litigation doesn’t necessarily mean a school choice program will be permanently secured. Opponents will continue to challenge the courts’ decisions, and advocates should be prepared to meet those challenges.
“It’s important to make sure we’ve got a durable system in place to defend these programs around the country, no matter when and where the lawsuits arise,” Fisher says. “Even when you’ve won, you can’t take for granted that victory is going to stand because the opponents of education freedom will be back for another bite.”
As an example, Fisher points to current litigation challenging Ohio’s ESA program, which carries on despite longstanding precedents from both the Ohio Supreme Court and United States Supreme Court upholding school choice in Ohio. In this recent case, EdChoice and IJ have teamed to represent parents who have intervened to help defend the ESA program.
To best protect school choice nationwide, donors can support capacity-building efforts by donating to organizations such as Drexel and VELA, which are dedicated to bolstering established and developing programs. And when it comes to litigation efforts, organizations such as EdChoice and those doing similar work will benefit from financial support. These proactive giving efforts are essential to the success and survival of school choice programs across the country.
