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The insolvency of goodwill: Investing in great public schools

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  Published in Stocks and Investing on Saturday, October 25th 2025 at 5:32 GMT by Atlanta Journal-Constitution
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Investing in Great Public Schools: The Insolvency of Goodwill and the New Role of Private Capital

In a thought‑provoking piece that challenges conventional wisdom about school funding, the Atlanta Journal‑Constitution’s education desk laid out a stark reality: the future of many American public schools hinges on a financial model that has never been designed for them. Titled “The Insolvency of Goodwill: Investing in Great Public Schools,” the article argues that the historic reliance on goodwill—a term for the intangible value parents, teachers, and communities invest in their schools—has become a liability. With local tax revenues slipping, state budgets tightening, and federal aid fluctuating, the article calls for a reevaluation of how we finance school infrastructure, technology, and programs.

The Goodwill Dilemma

Goodwill, in the educational sense, refers to the positive perception that communities hold about their schools: a sense that students will graduate well‑prepared, that teachers are respected, and that the institution contributes to local identity. This perception often translates into political support for funding. Yet, the article shows that goodwill has no hard currency. As property values decline in many districts and school enrollment falls, the tax base that traditionally subsidized public schools has shrunk. Consequently, many school districts have resorted to taking on debt or turning to state and federal grants that come with strings attached.

To illustrate the scale of the problem, the article pulls in data from the 2023 “Public School Finance Report.” Districts across the South have seen their debt-to-capital ratio climb from 2.5:1 to nearly 4:1 over the past decade, a trend mirrored nationwide. This debt burden threatens to crowd out operational spending—classroom supplies, teacher salaries, and new technology—because a larger share of budgets must be directed toward interest and principal payments.

The Goodwill Insolvency Report

The article links to an in‑depth Goodwill Insolvency Report published by the nonprofit Goodwill Education Initiative (GEI). The report, released in August 2024, provides a sobering financial snapshot: Goodwill’s assets have eroded by 18% over the past five years, largely due to declining volunteer hours and sponsorships. Meanwhile, the organization’s liabilities have grown by 27%, driven by a surge in operational costs and an ambitious expansion of its after‑school programs. The report concludes that unless Goodwill can secure new revenue streams or drastically reduce costs, it faces a 15% probability of insolvency within the next two years.

The GEI’s financial distress is not isolated. The article notes that many similar foundations—focused on school improvement, mentorship, and community engagement—have struggled to maintain cash reserves. These findings underscore a broader trend: the goodwill that schools once relied upon for moral and social capital is now under economic pressure, making it difficult for schools to pursue long‑term improvements.

Private Investment: A Double‑Edged Sword?

Faced with these challenges, the article turns to a controversial solution: private investment in public schools. Drawing on examples from New York City’s “School Bonds for the Future” program, the piece outlines how municipalities have begun to sell municipal bonds backed by future student performance metrics. These bonds attract private investors seeking moderate returns, while the district gains immediate capital for construction and technology upgrades.

The article includes a link to a detailed study on school bond markets titled “Private Capital in Public Education: Risk and Return.” The study estimates that school bond markets could grow to $50 billion by 2030, with a weighted average internal rate of return of 4.5% for investors. However, it also highlights significant risks: covenant breaches if student performance does not meet projections, and the potential for gentrification if improved schools attract higher‑income families, thereby altering the very tax base that funds public education.

The Role of State Legislation

To balance the benefits and pitfalls of private capital, the article discusses recent state legislative proposals. In Georgia, lawmakers introduced the “School Financing Equity Act,” which would require a portion of any private investment to be earmarked for low‑income districts. The act also proposes a cap on the amount of debt any district can carry relative to its student enrollment. The article cites a quote from a Georgia Senate committee member: “We must protect our public schools from becoming mere profit centers.”

Looking Ahead

In conclusion, the article frames the crisis of goodwill as both a moral and financial emergency. Without an overhaul of how public schools are funded—moving from a goodwill‑based model to a sustainable, diversified funding strategy that incorporates prudent private investment—many districts risk falling into a debt spiral that compromises educational quality. It calls on policymakers, educators, and community leaders to confront this insolvency head on, ensuring that future generations inherit schools capable of nurturing their potential, rather than institutions that merely survive on the goodwill of their past.