“You can’t talk about closing the student achievement gap without talking about the resource gap,” says Jess Gartner. In other words, how schools allocate funds for educational services play a major role in shaping student outcomes. Yet deciding how that money is distributed and tracking how it is spent, across state agencies, districts and schools, can be a morass.
That problem is what led Gartner to start Allovue, the Baltimore-based company where she is CEO, and what also spurred her decision to acquire Equiday, a startup that helps districts plan how they disburse funds to schools. Financial terms of the deal, announced today, were not disclosed.
For Gartner, pairing the two companies feels as natural as it seems logical. Both offer education financial software (or “EdFinTech,” a term she’s coined), yet serve different stages in the school budgeting process. Allovue’s tools are used to help schools track and manage funds once their budgets are set by districts; Equiday helps districts decide how to disburse dollars to schools. Between the two, there is “seamless integration on the product side, and lots of overlap on the business development end,” says Gartner.
The timing for the deal seemed ripe from a financial standpoint as well. Earlier this year, Allovue raised $4 million in a Series A-2 round (and $13 million in total). Equiday, based in nearby Washington, D.C. and built by a team of three, had been bootstrapped since launching in 2018, and was considering raising a seed round to expand its operations. Rather than pitch investors, Equiday decided to join Allovue.
Gartner met Justin Dayhoff, CEO and founder of Equiday, at a conference for education finance professionals about a year ago. “From the moment we met, it was a ‘when, not if’ conversation,” she says, referring to the possibility of a business partnership. Dayhoff, along with Equiday’s marketing chief Megan Rainbow, will join Allovue’s team as a result of the acquisition.
Both parties previously referred customers to one another, and have common clients in districts like Indianapolis Public Schools. After this acquisition, Allovue will be used in districts that altogether serve about 1 million students, according to Gartner.
Allovue and Equiday share a mission in helping education leaders spend funds on things that best serve what their districts need, including professional development training, special-needs programs, and staffing support. To plan budgets, districts employ different financial modeling formulas and strategies. Some are based on meeting the needs of disadvantaged students; others are based on class sizes and instructional priorities.
However, as dollars worm their way from districts to schools, sometimes that money isn’t spent according to what they were earmarked for. And as district demographics change, sometimes the school programs that get funded don’t reflect the services that new student populations need.
Allovue’s tools help schools develop budget and staffing strategies that are aligned with district goals, manage spending against those plans, and analyze the impact in the context of outcomes like student achievement or enrollment. They have been used to surface accounting errors, redistribute millions of dollars, and in some cases even locate new pots of money that school leaders did not know were available, according to Gartner.
Having a clearer picture of school finances has also spurred more frequent communication between school principals and district officers, Gartner has observed. “For them to have informed conversations about finance and resources—that is the stuff of my wildest dreams.”
Furthering the push for greater financial transparency is the federal Every Student Succeeds Act, which mandates districts and states to publish each school’s per-pupil expenditures. Among the many questions that these reports aim to answer: whether districts are providing funding to serve high-needs populations, and whether the programs that schools spend money on help students achieve positive outcomes.
These reports will go into a level of detail that many districts have not historically tracked. And the results will be scrutinized by education stakeholders, from parents to politicians, reporters to school board members. But “if we’re going to talk about educational equity,” says Gartner, “we absolutely have to be talking about resource equity.”