School districts today have a lot on their plates, as they strive to best serve students, teachers, parents and their surrounding communities. From educating future leaders, innovators and global citizens to providing safe environments that are most conducive for learning outcomes and objectives, successfully living up to their missions goes far beyond the classrooms. At HIP Investor, our ratings help bring attention to the districts going above and beyond, as well as highlight those who could improve upon their mission, operations, stakeholder engagement, and education outcomes.
The HIP Impact Ratings for school districts analyze all 13,063 kindergarten through high school districts across the United States, evaluating their performance across a number of key metrics. From Health metrics such as student to teacher ratios, and math and reading test scores, to Equality metrics such as access to free or reduced school lunches and availability of special education programs, HIP Ratings aim to capture a holistic view of how well school districts are serving the intended outcomes for students and their communities.
Evident in Figure 1, there is a general correlation between financial resources of a district (measured in district revenue per student) and its performance across the HIP Metrics (summarized by the overall HIP Rating). This relationship is intuitive: wealthier districts with greater resources can more easily invest in new education technology, hire effective faculty, and build top of the line facilities. But of course, there is wide dispersion along this correlation relationship, which is to say that there are many factors determining how effective school districts are in serving its students.
In fact, one of the more interesting portions of the graph is the upper-left quadrant, highlighted in Figure 2, containing 3,444 school districts who are creating positive impact (with a HIP Rating above 50%) with below average resources (less than $13,460 district revenue per student). For investors looking to maximize the impact of their portfolios, these districts who are already using their lean resources effectively provide significant impact opportunity. Investments in these districts would likely have positive impact based on the districts’ demonstrated successful management given existing resources.
By contrast, consider the 511 school districts in the bottom-right quadrant, highlighted in Figure 3. These are districts with above average revenue per student (more than $13,460) who are nevertheless lagging across the measured performance metrics. Whether due to inefficient management or other administrative challenges, these districts are unlikely to provide the maximum possible impact without considerable engagement with the issuer to ensure that capital is being utilized as effectively as possible to better serve the students and larger communities.
Want to know how your local school district rates? Contact us to learn more about our HIP Ratings for K-12 School Districts, and how they can be used to build a more impactful portfolio.