🛝 Public Schools Turn Fundraiser, Pre-K Trying AI, Child Care Funding Frozen

Welcome to Playground Post, a bi-weekly newsletter that keeps education innovators ahead of what's next.

This week's reality check: While the federal government freezes billions in child care funding over a viral YouTube video, public school districts are quietly becoming nonprofits to survive. Meanwhile, preschool teachers are experimenting with AI but nobody taught them how to tell if it actually works.

💎 Data Gem

Chronic absenteeism dropped from 28.5% of students in 2021-22 to roughly 23.5% in 2024. That's still 1.7 times higher than the pre-pandemic baseline of 13%. At current rates, attendance may never fully return to normal.

Public Schools Are Becoming Fundraisers

The Los Angeles Unified School District just revived its dormant nonprofit foundation and hired a new executive director to court Hollywood and corporate dollars. 

The goal: $100 million over five years. So far, they've raised $26 million.

LA isn't alone. Mike Taylor, head of the National Association of Education Foundations, says he's been fielding calls since summer from districts looking to navigate federal funding uncertainty.

Of the nation's 13,000 school districts, around 6,000 already have foundations. 

Most are volunteer-run. The focus has evolved from buying extra books to funding workforce development partnerships, teacher retention, and student mental health support.

"Government dollars will only go so far, and there are unmet needs that often foundations can address," said LAUSD Superintendent Alberto Carvalho.

The Eli and Edythe Broad Foundation, along with foundations from "Two and a Half Men" co-creator Chuck Lorre and Clippers owner Steve Ballmer, recently gave $11 million to support LAUSD's 121 "priority schools" with the highest student needs.

Here's what makes this different from past waves of education philanthropy: funders say they're focused on supporting strong school leaders rather than disrupting how education is delivered. 

Erica Lim from the Broad Foundation put it plainly: "We're not looking to backfill or solve really systemic budget issues. That's for district leaders to solve."

But Carvalho acknowledged foundation money could become a stopgap if federal funding for programs like those that support English language learners gets cut. "That would be a legitimate support from the foundation," he said. "Which could be a likely scenario in the months to come."

For education innovators, the gap is visibility and speed. 

Districts don't know which schools have parent fundraising and which don't. Foundation money gets deployed "quickly and with less bureaucracy" compared to government funds. Tools that help districts map donor gaps across campuses, or replicate sponsor-a-school matching models, address needs districts are actively trying to solve.

1 in 3 Preschool Teachers Uses AI. Most Can't Tell If It Works.

Preschool teachers are the least likely educators to use generative AI. Still, 29% are already using it, according to new research from RAND. Compare that to 69% of high school teachers, 64% of middle school teachers, and 42% of elementary teachers.

The question now is whether AI in pre-K will grow or stall.

"Are we going to learn more about developmental impacts that will prevent it from becoming more common?" asked Jordy Berne, an associate economist at RAND. "Or will we find ways to use it really productively?"

Screen time remains the big concern. 

Teachers worry that devices could detract from the human interaction young children need for social development. But pre-K classrooms are plenty plugged in already. 

Almost all teachers surveyed (98%) use online video or audio with students. 

Interactive whiteboards hit 77%. 

Electronic games reached 64%.

The real question isn't whether teachers use technology but whether they know if the technology is any good.

Here's the gap that's rarely thought about: 70% of preschool teachers received training on how to use edtech. Only 38% received training on how to assess its quality.

"Especially as AI is evolving and the entire edtech landscape is evolving, it's making it harder for teachers to know what is high and low quality," Berne said. "So this is probably more important than ever."

For innovators, pre-K AI is wide open territory. But the opportunity isn't building tools for four-year-olds. 

It's building AI that helps teachers without requiring student screen time, like lesson planning assistants or family communication platforms. And there's a clear gap for quality evaluation frameworks, procurement advisory services, or training programs that help teachers assess whether the shiny new products actually work.

Federal Child Care Funding Is Frozen

The Trump administration rang in 2026 by freezing all federal child care funding to states. 

HHS is now requiring additional verification before states can draw down Child Care Development Fund money.

The consequences are predictable - more delays. 

When Illinois struggled with payment delays in 2023, providers shut their doors. "I got a license through the state of Illinois to be a childcare provider and take care of children and help families in need," one provider told local news at the time. "And now I'm in need."

The trigger for the freeze? A viral YouTube video claiming a handful of child care centers were fraudulent operations with no children inside. 

Minnesota officials have since conducted compliance checks on nine centers featured in the video. All but one, which wasn't open during inspection, were "operating as expected" with children present.

Elliot Haspel, an early childhood policy expert, explained the stakes: "Most child care programs operate on shoestring budgets. Any extra delay in payments can easily create a fiscal crisis."

Many centers serve families across the income spectrum, from grocery store workers to surgeons - and federal child care funds also support hundreds of thousands of school-aged kids in after-school and summer programs.

For education entrepreneurs, this crisis shows a fragile system ripe for innovation.

There's immediate demand for compliance and verification tools that can satisfy federal requirements. 

Attendance tracking software with verifiable data could help restore trust and unfreeze funds. Child care infrastructure that depends entirely on government funding needs alternative business models. Micro-centers, employer-supported care, and diversified revenue streams are no longer theoretical conversations.

⚡️More Quick Hits

More in education this week:

• California's 5.8 million students face cellphone bans by July 1 — The Phone-Free School Act requires all districts to limit or ban smartphones, plus new laws prohibit ultra-processed foods in school meals by 2035

• $145 million in federal apprenticeship funding now available — Labor Department's largest push yet toward 1 million apprenticeships, with bonus payments for hitting outcome targets

• Nearly half of Hawaii's new teacher hires are unlicensed — 48% of newly hired educators lack a teaching license, up from 27% in 2020-21

• Lawsuits challenge $168 million cancellation of community schools grants — AFT and state attorneys general argue termination of 19 multi-year grants was unlawful, with hundreds of tutors, social workers, and family liaisons already laid off

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