Developing a Robust Funding Strategy

Another Resource: The School Mental Health Quality Guide: Funding & Sustainability by the National Center for School Mental Health at the University of Maryland School of Medicine provides background information on funding and sustainability, best practices, possible action steps, examples from the field, and resources.

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Budget Reallocation 

Many districts fund digital well-being products by reallocating funds from their existing budgets. By conducting a budget and resource audit and engaging community members, district leaders may identify areas of overlap or flexibility in departmental budgets. This strategy typically requires minimal administrative effort and can be implemented without additional applications or external approval processes. 

Action Steps: 

• Conduct a Comprehensive Budget and Resource Audit. Conduct a comprehensive review of existing student mental health services, including Tier 1, 2, and 3 interventions. Document current funding sources, funding amounts, allowable uses, and anticipated funding timelines to better understand available resources. As part of the review, identify any underused, duplicative, or low-impact programs that could be consolidated or phased out to support new investments.      
• Build a Multi-Disciplinary Decision-Making Team. Establish a team to guide decision-making throughout the selection, implementation, and sustainability planning process. This team can help prioritize needs, evaluate vendors, and monitor implementation. You can find additional guidance on developing and engaging a multi-disciplinary team here.  
• Develop Sustainability Strategies. Identify potential return on investment that may result from implementing the product (e.g., improvements in student attendance rates). Collect quantitative and qualitative data on the impact of a budget reallocation to foster sustainability. 

Resources: Tools like the “School Mental Health Initiative Alignment Map” and the “Strategic Abandonment Tool” linked in this resource guide may help in this process. 

A Self-Assessment and Planning Guide: Developing a Comprehensive Financing Plan provides teams with direction in their funding and sustainability efforts. The first section, Identification of Current Spending and Utilization Patterns Across Agencies, includes helpful considerations for budget and resource audits. 

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Community and Corporate Partnerships 

Community and corporate partnerships provide access to a wide range of resources, including funding, expertise, and technology. Community partnerships allow for cost efficiencies such as shared facilities and data collection software, as well as capacity expansion. These partnerships require careful alignment of goals between partners and often involve the development of a Memorandum of Understanding. Even if these community partnerships do not directly support a digital product, they may free up funds elsewhere to support a digital well-being tool.  Corporate partnerships may help with donations or discounts on technology or provide technical expertise in selecting and implementing a digital product. 

Resource: For additional guidance on developing school-community partnerships, see the Teaming Quality Guide developed by the National Center for School Mental Health.

Example from the Field (Corporate Partnership): In 2024, Aetna Better Health of Illinois partnered with Kooth Digital Health, a mental health and well-being platform for young people. The partnership provided access to the platform at no cost to thousands of teens and young people in the state. 

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Types of Community and Corporate Partnerships

Philanthropic Funding

Many local, state, and national foundations offer funding to support mental health, children’s health, education, and student well-being. Local community foundations, United Ways, and corporate foundations may also offer grant opportunities, including some that specifically support children’s mental health and well-being in the communities they serve. Many health insurance companies have foundations that may be region-specific. These grants can be substantial in size, and many offer multi-year awards. Philanthropic grants are often highly competitive and often involve comprehensive fiscal and program reports, as well as data collection requirements.  Districts should carefully review grant or funding expectations and evaluate their administrative and staffing capacity to meet all obligations.

Action Steps: 

• Identify potential funding opportunities. Explore grant databases and philanthropic networks to identify foundations whose priorities align with your initiative and use of digital well-being tools. Research local community foundations, family foundations, corporate foundations, and United Way chapters, and develop a list of prospective funders that includes eligibility requirements, deadlines, and funding priorities. 
• Align your initiative with funder priorities. Review each funder’s mission, strategic goals, and previously funded projects to better understand areas of interest. Clearly demonstrate how your initiative supports student mental health, well-being, educational success, or other outcomes that align with the funder’s priorities. 
• Develop a strong proposal. Create a compelling proposal that clearly describes the need being addressed, the population served, and the expected impact of the project. Follow specific application requirements carefully. 

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Resources: 

• Find Grant Opportunities: Explore grant databases and connect with local philanthropic foundations including family, corporate, and community foundations. 
  
  • Candid’s Foundation Directory: Leading source of philanthropy, including an online database of over 242,000 grantmakers available to subscribers. 
  • Grantmakers for Education: A national association of grantmakers who invest in education initiatives in all 50 states.‍
  • United Way: An organization with local chapters that can help connect you with other agencies and/or initiatives within your community. 

• Grant Writing: How Do I Write a Grant Proposal? This resource from Candid provides guidance on writing a compelling grant proposal. It includes several tips and sample documents. See Candid’s resource page for additional articles on proposal writing.

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Examples from the field:

Sonar mental health, well-being coaching and care navigation for youth, received foundation funding to offer Sonar to PA districts.

Clayful received philanthropic funding in Florida to offer access to supervised mental health coaches for middle and high school students and staff.

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Local Community Donations

Individuals, community organizations, or local businesses may be interested in supporting local school or district mental health programs. School districts with education foundations can fund new programs by partnering with these foundations to raise awareness about student needs and secure funding for digital products that support student well-being.

Action Steps:

• Develop a fundraising campaign to raise money for a new digital well-being product. Create a compelling case for support that focuses on investing in student mental health, well-being, or access to care based on identified needs. Build a coalition of school leaders, students, families, and other champions to support the effort, and develop outreach materials to disseminate through email campaigns, school events, family nights, student-created videos, and social media campaigns. Consider different fundraising approaches such as matching campaigns, sponsorship opportunities, and tiered giving levels. 
• Ask local businesses to sponsor new digital well-being products for students and staff. Identify businesses with a demonstrated commitment to youth, families, education, and community investment, including chambers of commerce, healthcare systems and hospitals, and civic organizations. Frame sponsorship opportunities around improving community well-being and workforce readiness, while highlighting the potential impact of digital well-being tools.  

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State Allotments 

State funding for school mental health varies widely. Some states have allotments specifically for school mental health services, while others have more general allotments. Because allotments are typically formula-based allocations distributed through state education agencies, they can offer a more predictable and sustainable source of funding than competitive grants. Depending on the funding stream, districts may receive these funds automatically as part of their state funding entitlement or be required to meet specific spending, programmatic, and reporting requirements. Digital well-being tools may qualify as allowable expenses under some allotments.  

Action Steps

• Identify eligible state allotments. Contact the state’s department of education to identify mental health, student support, wellness, and school safety allotments available to the district. Review guidance on allowable use to determine whether digital well-being tools and associated implementation expenses/activities (e.g., professional development) may qualify for funding.  
• Confirm compliance and sustainability. Before committing funds, assess any spending restrictions and reporting requirements associated with the allotment. Develop a plan to monitor outcomes and ensure investment can be sustained if allotment funding levels or priorities change in the future. 

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State and Federal Government Grants

State and federal grants are often the largest and most widely used funding sources for school mental health initiatives. These funding opportunities can support a wide range of activities such as personnel, training, prevention and intervention programs, and community partnerships. However, grant funding typically comes with specific eligibility requirements, as well as comprehensive fiscal and program reporting. Before pursuing any funding opportunity, districts should carefully review grant expectations and evaluate their administrative and staffing capacity to meet all grant obligations.

Types of Government Grants

Government grants may be funded through federal or state appropriations and administered by federal agencies, state agencies, or a combination of both. Some federal grants are awarded directly by federal departments, while others are distributed to states and administered by state agencies. Similarly, states may establish grant programs through legislative appropriations or statewide initiatives. 

Government grants generally fall into two broad categories: formula grants and discretionary (or project) grants. Understanding the distinctions between these grant types can help districts identify opportunities that align with their goals. 

Formula Grants

These grants are noncompetitive funding programs that allocate funds according to a predetermined formula typically based on factors such as student enrollment, poverty rates, or other demographic indicators. These grants are often administered by state education agencies. 

Examples: Title IV, Part A—Student Support and Academic Enrichment Grants, Individuals with Disabilities Education (IDEA) funding

Discretionary or Project Grants

These grants are competitive funding opportunities awarded through an application process. 

Examples: Mental Health Service Professional Demonstration Grant, School-Based Mental Health Services Grant, Project AWARE  

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Federal Grant Action Steps 

• Identify relevant federal agencies and funding opportunities. Review grant programs administered by agencies such as the U.S. Department of Education, Substance Abuse and Mental Health Services Administration (SAMHSA), Health Resources and Services Administration (HRSA), and National Institute of Justice. Forecasted grant applications are often listed in December or January. Look in advance to see what may be released in the upcoming year. 
• Learn the federal grant process. Review guidance on federal grant terminology, eligibility requirements, registrations, and application procedures through resources such as the Grants Learning Center. 
• Register for funding announcements. Grants.gov allows users to receive notifications about funding opportunities from federal agencies. Many federal agencies also offer agency-specific email alerts or listservs. Subscribing to these notifications can help districts identify opportunities as soon as they become available.  
• Review previously funded projects. Examine past grant awards to better understand agency priorities and common application expectations.

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State Grant Action Steps 

• Identify funding opportunities through state agencies. Contact your state education agency, state health department, and state mental health agency to learn about available grants that may support school mental health initiatives such as prevention services, crisis response systems, or telehealth services. Review agency websites regularly for competitive grant announcements, funding formula guidance, and technical assistance resources.  
  
  • Example: Funded by the New Mexico Health Care Authority, Navi is a free, digital mental wellness platform for New Mexican teens ages 13 to 18. It offers practical tools to manage stress, handle emotions, and connect to local crisis resources, with offline capabilities for rural and Tribal communities. 
• Monitor Governors’ initiatives and state budget appropriations. Governor’s offices and state legislatures may establish initiatives that include grant funding for school mental health services and supports. Review state budget proposals and legislative reports to track emerging funding opportunities. 
• Sign up for state grant notifications and listservs. Subscribe to email alerts, newsletters, and grant listservs from state agencies to receive timely updates about federal opportunities and application deadlines. 
• Note: Listings for state-funded grant opportunities vary by state. While some states list grant opportunities on Governors’ websites, others post on the official state website. States may also list grant opportunities through state agency websites. Look for grant opportunity listservs and sign up to receive regular updates. If you cannot find grant listings, contact your Governor’s office and ask where to look.

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Example from the field: Backpack Healthcare won a contract through the Maryland Community Health Resources Commission via the Consortium on Coordinated Community Supports (funded by the Blueprint for Maryland’s Future) to serve 150,000+ students in Baltimore County and Howard County, including through telehealth supports.

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Medicaid Reimbursement

Medicaid provides health coverage to nearly 40% of the nation’s youth. Children may be eligible for Medicaid based on factors such as household income, unique health needs (e.g., disability), and foster care status. Medicaid is funded through a combination of Federal and State funds. While Medicaid operates under substantial federal oversight, each state administers its own program and determines the structures and policies that drive it.  

Since the reversal of the Free Care Rule, which restricted schools from getting reimbursement for services provided to Medicaid-enrolled students without an Individualized Education Plan (IEP), in 2014, many states have expanded Medicaid to allow school districts to bill Medicaid for school-based health services, including mental health services, provided to all Medicaid-enrolled children, not just those with an IEP. States that have expanded school-based Medicaid demonstrate that expansion leads to a significant source of new funding at the state and district levels. 

Overall, Medicaid is a critical funding stream for targeted or individualized supports within a broader funding strategy. While Medicaid does not reimburse or provide direct funding for digital health tools or products, most Medicaid programs reimburse for services provided via telehealth, including evaluations, medication management, and psychotherapy. 

For additional information about school-based Medicaid, see the Medicaid SBS 101 Quick Guide developed by the Medicaid School-Based Services Technical Assistance Center. Healthy Students, Promising Futures, an initiative from the Healthy Schools Campaign, also has numerous resources about school-based Medicaid.

Action Step to determine your state’s status: 

• Explore the School Medicaid Expansion Map page to find the status of your state. This page, developed by Healthy Students, Promising Futures, an initiative from the Healthy Schools Campaign, tracks state status on Medicaid school-based services expansion. To date, 28 states have taken steps to expand their school Medicaid program to cover services outside of an Individualized Education Plan (IEP). The status of your state will help inform your next steps. 

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Action Steps for States without School-Based Medicaid Expansion 

Note: The action steps below are from a webinar delivered by the Medicaid School-Based Services Technical Assistance Center titled Primer for Local Education Agencies (LEAs) on Medicaid School-Based Services. 

• Continue to ensure a Free Appropriate Public Education (FAPE) as directed by the Individuals with Disabilities Education Act (IDEA) and bill Medicaid for Medicaid-enrolled students.   ​
• Empower and educate school staff on the importance of their role in administering school-based Medicaid services and the existing school-based program.​
• Understand how to provide more existing services by identifying the current services provided to students within school settings and identifying the needs of students. 
• Determine what is feasible to increase student access to Medicaid by ensuring reimbursement is provided for already-available services and ensuring compliance with existing state mandates and policies. 
• ​Make your voice heard by fostering relationships and having conversations with decisionmakers from your State Medicaid Agency and State Education Agency that are developing school-based Medicaid policies. Ask questions about the status of expansion efforts and share suggestions and concerns on the feasibility of administering school-based Medicaid. 

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​ ​Action Steps for States with School-Based Medicaid Expansion 

• Understand your state’s school-based Medicaid expansion status by identifying whether your state submitted a state plan amendment or passed legislation and what Medicaid services and administrative activities are eligible for reimbursement. This document, developed by the Healthy Schools Campaign, tracks state activity related to Medicaid school-based services and includes links to key state resources such as bill texts, state plan amendments, and Medicaid manuals for LEAs. 
• Identify other LEAs that are billing for Medicaid school-based services and ask questions about the services they provide and strategies around developing and maintaining billing systems. 
• Identify service delivery models used in your state for school-based Medicaid. Generalized service delivery models can be used for general healthcare needs, and specialized service delivery models can be used for specific conditions. Some States may also offer telehealth modalities as an option for delivering a covered Medicaid service for Medicaid-eligible children.

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Example from the Field: Anaheim Elementary School District (~13,000 students) unlocked over $700,000 in its first state reimbursement cycle (September 2025) using TadHealth to bill Medi-Cal and commercial payers through the CYBHI fee schedule. 

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Combining Funding Sources 

Combining funding sources to purchase and implement digital products as part of a broader student mental health and well-being initiative is crucial to extend your reach, increase the sustainability and flexibility of funding, and enable a comprehensive and holistic mental health strategy. Developing a funding strategy that combines new, existing, and former funding through braiding, blending, and sequencing is crucial.

• Braided Funding
  
  • Coordinates funds from different sources for a single purpose. Each fund retains its identity and requirements.
• Blended Funding
  
  • Combines funds into a single pot with its own requirements. 
• Sequenced Funding
  
  • Involves utilizing multiple funding streams separately and sequentially for specific services.