Funding Wizard: How We Calculate
This page explains the methodology behind the Microschool Funding Wizard. Understanding these calculations helps you make better decisions and know where to push back on assumptions.
Key Numbers We Use
TEFA Amounts (2026-2027)
| Student Type | Annual TEFA | Source |
|---|---|---|
| Standard (K-12) | $10,474 | 85% of state per-pupil funding |
| Special Needs (IEP) | $30,000 | Enhanced funding for students with disabilities |
These amounts are set by the Texas Comptroller and represent the maximum scholarship per student. Official TEFA program page →
Prenda Platform Fee
| Fee | Amount |
|---|---|
| Per student, per year | $2,199 |
This covers curriculum, software, insurance, background checks, payment processing, and support. See Prenda profile →
How We Calculate Year 1
"Year 1" means everything needed to successfully launch and complete your first school year. This includes:
- Pre-launch costs (Spring/Summer 2026): Guide salaries before school starts, venue setup, furniture, devices
- Operating costs (Aug 2026 - Jul 2027): The full school year of rent, salaries, platform fees, supplies
Critical timing: The first TEFA payment arrives July 1, 2026 (25% of annual amount). But you'll have expenses before then (Guide training, furniture, devices, rent). All pre-launch spending must come from fundraising or reserves.
TEFA payment schedule: July 1 (25%), October 1 (50%), April 1 (25%). Note: no January payment.
Year 1 is not just the school year. It's the entire journey from "we're doing this" to "we finished our first year." That's why Year 1 costs are higher than Year 2+.
Revenue
Year 1 Revenue = (Standard students × Tuition) + (IEP students × $30,000)
We assume all students have TEFA funding. The wizard lets you set tuition at or above the TEFA amount. If tuition > TEFA, families pay the difference out-of-pocket.
Example: 12 students at $10,474 tuition = $125,688 revenue
Costs
Year 1 has three cost categories:
1. Operating Costs (Aug '26 - Jul '27)
These recur every year:
| Category | What's Included |
|---|---|
| Venue | Monthly rent × 12 (or $0 for church-owned space) |
| Staffing | Guide salary × number of Guides |
| Prenda fees | $2,199 × number of students |
| Insurance | Liability coverage (Prenda may include some) |
| Marketing | Flyers, website, community outreach |
| Supplies | Consumables, books, materials |
2. Pre-Launch Costs (Before Aug '26)
One-time costs before school starts:
| Category | Calculation |
|---|---|
| Guide salaries | Monthly salary × months before August |
| Venue rent | Monthly rent × months before August |
If Guides start in August (when school starts), pre-launch Guide costs = $0. If they start earlier for training/setup, you pay those months before any TEFA revenue arrives.
3. Startup Costs (One-Time)
| Category | What's Included |
|---|---|
| Setup/furniture | Desks, chairs, whiteboards, storage |
| Devices | ~$300/student for Chromebooks |
Year 1 Net
Year 1 Net = Revenue - (Operating Costs + Pre-Launch Costs + Startup Costs)
This is your true Year 1 bottom line. It includes everything you'll spend to launch and run the school for the first year.
Year 2+ Profit
Year 2+ Profit = Revenue - Operating Costs
After Year 1, you don't have startup or pre-launch costs. This is your recurring annual profit. A healthy model shows Year 2+ profit even if Year 1 is tight.
Break-Even Calculation
Break-even students = Fixed Costs ÷ Net per Student
Where:
- Fixed Costs = Venue + Staffing + Insurance + Marketing + Supplies (everything except Prenda fees)
- Net per Student = Tuition - Prenda fee ($2,199)
Prenda fees are variable (you only pay for enrolled students), so they're excluded from fixed costs.
Example:
- Fixed costs = $85,800
- Tuition = $10,474, Prenda fee = $2,199
- Net per student = $8,275
- Break-even = $85,800 ÷ $8,275 = 11 students
Pre-Launch Capital (Fundraising Target)
This is what you need to raise before the first TEFA payment arrives on July 1, 2026:
| Component | Calculation |
|---|---|
| Guide salaries (pre-launch) | Monthly salary × months before August |
| Venue rent (pre-launch) | Monthly rent × months before August |
| Startup costs | Setup + devices |
| 2-month buffer | (Monthly salary + rent) × 2 |
The 2-month buffer is a safety net. TEFA payments could be delayed, or enrollment might drop. Having reserves means you never miss payroll.
When to raise this: Now through Spring 2026. You need this capital secured before you start spending on Guides and setup.
Sensitivity Analysis
The "What if fewer students enroll?" table shows what happens at 80% and 60% of your target enrollment. This helps you understand:
- How many students you can lose before going negative
- Whether your model is resilient or fragile
A healthy model stays profitable even at 80% enrollment.
Key Assumptions
The wizard makes several assumptions. Know them so you can adjust:
| Assumption | Reality Check |
|---|---|
| 100% of students have TEFA | Not guaranteed. TEFA is a lottery. Some families may not get approved Year 1. |
| All students pay full tuition | Some families may need scholarships or payment plans. |
| Guide salary = total compensation | Doesn't include employer payroll taxes (~8% if W-2 employee) or benefits. Consult an accountant. |
| Prenda is the platform | Other platforms have different fee structures. |
| Church space is cheaper than commercial | Default $500/mo vs $2,000+/mo for commercial lease. Your church may charge more or less. |
| No principal/coordinator | At scale (3+ pods), you'll likely need administrative help. |
What the Wizard Doesn't Cover
- Employer payroll taxes - If Guides are W-2 employees (not contractors), you owe ~8% extra to the government. Talk to an accountant about employee vs contractor classification.
- Curriculum beyond Prenda - Specialty programs, enrichment, field trips
- Scholarships - If you're subsidizing families who can't afford co-pay
- Growth capital - Expansion to new pods, additional Guides
- Legal/accounting - Professional services for setup
- Background checks, training - Prenda covers some, but not all
Sources
These calculations are estimates for planning purposes. Actual costs and revenue will vary. Consult with Prenda and financial/legal advisors before committing.