Open for Business
The Economics of Everyday Entrepreneurs in Unconventional Education
Humboldt Park Montessori, Illinois
VELA supports the largest community of everyday entrepreneurs in unconventional education in the United States, with more than 2,000 investments made and $24 million disbursed since 2019. This support has served entrepreneurs reaching more than 6.5 million learners and families.
VELA's active and engaged community provides unique insights into the rapidly growing market of unconventional education. In order to gain a better understanding of the business practices and models used in this nascent landscape, VELA conducted a survey of its community in the fall of 2022. The findings are valuable for entrepreneurs, learners, families, funders, policymakers, and anyone interested in the future of education.
What did we learn?
Unconventional education is for everyone — not just for white, affluent families.
The overwhelming majority of grantees report building organizations that engage a diverse customer base. Ninety-three percent (93%) report serving learners/families who identify as low-income or historically underserved, and 38% report having a core focus of serving those populations.
Entrepreneurs are working to responsibly sustain and grow their relatively young organizations.
Most respondents are nonprofits (56%) or intend to incorporate a nonprofit (10%), and 28% operate for-profits (e.g. LLC, sole proprietorship, corporation). At the time of receiving their first VELA grant, 42% of programs had been operating for less than a year, 30% for one to three years, and 28% for more than three years. And in terms of expansion, 95% of grant recipients intend to grow — 66% want to grow a lot, 29% a little.
Resourceful and with minimal external funding, entrepreneurs are building their organizations from the ground up.
Eighty-four percent (84%) report that they earn revenue from participants (e.g., tuition/fees from learners, selling products or services), and almost 70% report that tuition/participation fees are a primary source of revenue. Seventy-three percent (73%) of respondents said they hadn’t received any grant dollars in 2022, outside of their VELA grant. Only 23% of respondents acquired funding through loans, and only 10% currently access public funding.
In terms of expenses, respondents report spending more than half of their operating budgets on staffing and facilities. They keep costs low by utilizing volunteers (e.g., 23% of programs rely on volunteer educators) and contractors and by renting or sharing building space.
Entrepreneurs are using bespoke, community-responsive funding models.
Because they’re balancing the concerns of sustaining themselves, providing a flexible and high-quality learning environment, and ensuring access to those with minimal means, the ways they structure their programs vary widely. Respondents leverage diverse fee structures, making available a range of discounts, scholarships, and low-cost or free options.
Many use sliding scales based on family income and honor systems, and they’re willing to negotiate and barter for a lower price in exchange for goods/services as currency. Additionally, most offer differentiated learning schedules and business models (e.g., subscription, membership, etc.), which help keep their offerings accessible, flexible, and sustainable.
Humboldt Park Montessori, Illinois
After spending years as an educator, Andrea Bazemore began to see the potential of alternative approaches to learning and curriculum that better meet students’ needs. Throughout the COVID-19 pandemic, she offered a culturally responsive virtual learning program tailored to underrepresented and neurodivergent students. To meet demand, she began opening hybrid microschools in public libraries, and she now operates 4 microschools in the broader Dallas-Fort Worth area. Through her company — the Black Apple — she also began creating and selling her own curriculum, with curriculum income as a source of revenue for her school programs. She also offers scholarships and a sliding scale tuition model based on family engagement.
What does this look like in practice?
When the Children’s House at Serenbe began experiencing significant growth, it knew its unique learner-centered model was something families wanted. The Montessori-inspired program expanded to serve learners ages 2 months through 18 years, and it ultimately affiliated with the Acton Academy model. The school is now in the process of opening a first of its kind, environmentally-friendly campus to meet demand. The school by-laws explicitly state that at least 25% of students will receive need-based scholarships. The primary way they do this is through the Apogee Georgia School Choice Fund, a qualified education expense credit program that supports student scholarships via Georgia tax payers who wish to support alternative educational opportunities.
Bramblewood Academy is a hybrid co-op located on a farm in Hilltown, Pennsylvania. They offer a mix of project-based learning, Socratic discussions, and real-world activities. In order to maintain flexibility and meet the financial needs of families, they offer a 2-day/week program with a volunteer-based tuition structure. Parents are not expected to be teachers, but they are encouraged to volunteer in other capacities. Parents who volunteer one day/week receive an almost 50% discount, and those who volunteer for a half-day/week receive a sizable tuition discount. Not only does volunteering reduce total cost for families, but also parents benefit from the increased buy-in and sense of community. The program tuition is capped at $230/month, and they also offer additional discount rates for siblings.
Engage Learning, Oklahoma