39Fiscal Stress and Voluntary Contributions to Public SchoolsEric J. BrunnerQuinnipiac UniversityJennifer ImazekiSan Diego State UniversityAbout the AuthorsEric Brunner is an associate professor of economics at Quinnipiac University. His research focuses on school fi nance, the political economy of school spending and school choice, and the voluntary provision of public goods. He holds a B.A. from the University of Connecticut and a Ph.D. from the University of California, Santa Barbara. He can be contacted at [email protected] Imazeki is an assistant professor of economics at San Diego State University, where she teaches courses in public fi nance and applied microeconomics. She re-ceived her Ph.D. in economics from the University of Wisconsin-Madison, where she also worked as a re-searcher for the Consortium for Policy Research in Edu-cation. Her research focuses on school fi nance reform and teacher labor markets. Recent work includes papers on whether No Child Left Behind is an underfunded mandate and the political economy of school vouchers. She can be contacted at [email protected] papers in this publication were requested by the National Center for Education Statistics, U.S. Department of Education. They are intended to promote the exchange of ideas among researchers and policymakers. The views are those of the authors, and no offi cial endorsement or support by the U.S. Department of Education is intended or should be inferred.4041I. IntroductionThroughout the country, school fundraising is being taken to new levels as a weak economy threatens not only extracurricular programs but core academic offerings as well. The traditional bake sale has been replaced with celebrity fundraisers and wide-scale mail campaigns, as an increasing number of public schools and districts are appealing to their communities for private contributions to help counter dwindling local tax revenue and budget cuts at the state level. While schools on the receiving end of these contributions certainly welcome the assistance, the increasing prevalence of voluntary donations has raised concerns about the equity of allowing some schools to benefi t while other schools, often in less affl uent areas, do not have access to the same resources. Yet it is unclear whether these concerns are well founded. Much of what we know about the magnitude and dis-tribution of voluntary contributions to public schools is anecdotal. While popular press stories now abound about schools that manage to raise exceptional amounts of money, the amount raised by most schools is likely to be far more modest. For example, in their examination of the level and distribution of voluntary contributions to California public schools in the early 1990s, Brun-ner and Sonstelie (1997) found that while a few schools Fiscal Stress and Voluntary Contributions to Public SchoolsEric J. BrunnerQuinnipiac UniversityJennifer ImazekiSan Diego State Universitymanaged to raise signifi cant amounts of money, contribu-tions tended to be quite small, on average. However, the prevalence of voluntary contributions has increased over the last decade, raising the possibility that contributions now have a greater impact on the distribution of revenue across communities. The purpose of this paper is to in-vestigate that possibility by documenting the level and distribution of voluntary contributions to California’s public schools in 2001.California provides an ideal setting to examine the level and distribution of voluntary contributions for two reasons. First, while the use of voluntary contributions to fund public school programs is a relatively recent phenomenon in most states, it is a long-established practice in California. As documented by Brunner and Sonstelie (1997), the growth of private donations to public schools in California is directly related to two events: the California Supreme Court ruling in Serrano v. Priest, which mandated the equalization of per pupil property tax revenue across districts, and Proposition 13, the 1979 property tax initiative that capped property tax rates at 1 percent of assessed value. Combined, these events reduced the amount of tax revenue available to many school districts, particularly wealthy districts, and prohibited school districts from raising property taxes to fund school spending in the future. In response to thoseDevelopments in School Finance: 200442restrictions, many school districts have attempted to replace lost property tax revenue with voluntary contribu-tions. Second, California is a diverse state, both in terms of the number and size of its schools and school districts and the socioeconomic status of its student body. As a result, California provides an excellent setting to examine how the characteristics of schools and school districts affect the distribution of voluntary contributions. The remainder of this paper is organized as follows. In section II, we discuss the sources of our data on voluntary contributions. Section III documents the size of volun-tary contributions in 2001. We fi nd that contributions have increased substantially over the past decade from approximately $123 million in 1992 to $238 million in 2001. Even so, we also fi nd that voluntary contributions remain small on average: If the $238 million in voluntary contributions were distributed equally across schools it would amount to less than $40 per pupil. Of course, voluntary contribu-tions are not equally distributed across schools. In section IV, we document the distribution of voluntary contributions across schools and school districts and examine how the characteristics of those schools that have been most success-ful in raising voluntary contributions differ from schools that have been less successful. Finally, in section V, we examine one potential explanation for why the use of voluntary contributions is not more widespread.II. Identifying Voluntary ContributionsThere are only a few wide-scale studies that examine the size and distribution of voluntary contributions to public schools. This is due, in part, to the fact that schools and school districts often do not report private contributions in their offi cial statements of revenue and expenses and even when they do, private contributions are not singled out as a separate source of revenue. Consequently, studies that examine the distribution of dollars per pupil (e.g., Murray, Evans, and Schwab 1998) typically use data that either do not include