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Indianapolis Teacher Merit Pay in Charter Schools Gets Increasing Philanthropic Support

Teacher merit pay in Indianapolis charter schools gets millions in new aid from philanthropies.

Courtney Buuck, a kindergarten teacher at Avondale Meadows Academy, said she always wanted to be a teacher. She landed at the school directly after graduating from Ball State University, and won the top $40,000 bonus in the merit bonus program’s second year. (Amelia Pak-Harvey/Chalkbeat)

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Courtney Buuck thought there was some kind of mistake.

When she learned that she received a $40,000 bonus payment on top of her base teacher鈥檚 salary last fall, she was in shock. Like other staff at United Schools of Indianapolis鈥 three charter schools, she was eligible for a bonus based on her year-end evaluation score.

She just didn鈥檛 think she鈥檇 come out on top.

鈥淚 am just really hard on myself as an educator,鈥 said Buuck, who teaches kindergarten at the Avondale Meadows Academy K-4 school. 鈥淎nd then once the shock wore off, I was just really proud of myself.鈥

Buuck plans to save her bonus to help her purchase her first home.

Buuck鈥檚 bonus comes from the $12.5 million Vigilance in Teaching and Learning 鈥 or VITAL 鈥 Trust, and pledged to support performance-based bonuses for staff at the charter network for 25 years. In the first year of awards, she received nearly $16,000.

Now, another venture with essentially the same name is expanding merit bonuses to 11 more Indianapolis charter schools this year in an effort to attract and retain high-quality educators. In April, the philanthropic VITAL Foundation awarded roughly $1.3 million in its first round of grants for teacher bonuses at high-needs schools that could range from $1,000 to $10,000.

The two initiatives differ in a few respects, but both are a substantial investment in merit pay in Indianapolis, where dozens of charter schools and multiple school districts compete for educators. The federal government has promoted the concept over the years through , which the Trump .

The big question: Will it work? Research suggests that it could, if implemented in certain ways. But other studies suggest that . And there are concerns dating back years that .

VITAL Foundation head Kelly Herron understands that money alone can鈥檛 solve the educator shortage. Instead, she said, the grants are part of a broader system to retain teachers.

鈥淵ou have to create a culture in which this can work,鈥 said Herron, who studied each school鈥檚 culture prior to awarding grants through school visits, staff focus groups, and surveys. 鈥淵ou can鈥檛 go into a school that already has a broken culture, and think that this is the magic wand.鈥

Merit pay hopes to address charter hiring challenge

Roughly 15 years ago, President Barack Obama鈥檚 Race to the Top initiative .

But today, state law does not tie teacher pay directly to student performance. Instead, school districts can bargain differentiated pay based on a teacher鈥檚 evaluation. The state Teacher Appreciation Grant also gives money to up to 20% of a district or charter school鈥檚 teachers using .

Charters and district-run schools can face different challenges when it comes to hiring and keeping teachers. Starting salaries can vary based on the schools. And charters don鈥檛 have to adhere to collective bargaining.

In the hiring game, charters may have the upper hand in at least one key respect. , according to a 2025 paper from the Center for Analysis of Longitudinal Data in Educational Research, or CALDER. The center analyzed teacher applications for 43 districts and charter school organizations nationwide using the Nimble application platform 鈥 a common hiring tool in Indiana.

But charter leaders can also have distinct hiring challenges that Herron, a former executive director of the United Schools of Indianapolis network, has experienced firsthand.

Some may struggle to keep up with the competitive base pay of nearby districts, she said. Others may have longer hours than traditional district-run schools or lack traditional districts鈥 name recognition.

The VITAL Trust bonuses, entering its third year, is based on a staff member鈥檚 numerical evaluation rating. The top 30% of performers receive an award that is weighted based on their score. In the program鈥檚 first two years, awards have averaged $10,000, with the top performer earning the $40,000 maximum. All staff members, not just teachers, are eligible for an award.

The new VITAL Foundation grant operates a bit differently.

Charters were awarded $3,000 per certified teaching position, and can only give bonuses to teachers designated as effective under the school鈥檚 performance system. How much each teacher receives also depends on their exact numerical evaluation score.

Schools that applied for the grants provided the foundation with their performance rubrics, which may rate teachers on academic outcomes along with other measures.

Neither the VITAL Foundation nor the VITAL Trust discloses its donors.

At Enlace Academy 鈥 which was a pilot school for the VITAL Trust that received $5,000 per certified teaching position 鈥 40% of teacher evaluations is based on student academic outcomes. The rest is based on school-wide goals such as staff attendance and professional practice measures, such as response to feedback from teaching coaches.

Longer hours and lower pay is a challenge when it comes to recruiting teachers, said Katie Dulay, executive director of the Neighborhood Charter Network that operates Enlace.

鈥淏ut the people who do well and are at Enlace for the long haul are here because they鈥檙e amongst peers who deeply care about their community and deeply care about getting strong outcomes for kids,鈥 she said.

How can merit pay for teachers be successful?

Researchers suggest that there are two ways that merit pay could improve the existing teacher workforce.

鈥淧ay would induce people to work harder or to get invested in themselves in ways that make them better,鈥 said Dan Goldhaber, the director of CALDER who has studied teacher pay systems. 鈥淎nd it could also change the quality of the workforce by encouraging the right people to stay or come into a system.鈥

Some research suggests that certain merit pay structures 鈥 like one-time bonuses tied to year-end test score increases 鈥 don鈥檛 work well, Goldhaber said.

And merit pay like the state鈥檚 Teacher Appreciation Grant has fostered competition rather than collaboration, said Indiana State Teachers Association President Jennifer Smith-Margraf. Some districts declined the grant because of those tensions, she said.

Ultimately, Smith-Margraf said pay for performance is not what motivates teachers.

鈥淲hat motivates them is wanting to be good at their job for their students,鈥 she said. 鈥淎nd what keeps them from being focused on that is having to take care of doing two to three and four jobs instead of focusing on the one job of being an educator.鈥

On the other hand, a found a positive effect of merit pay programs on student test scores.

Systems like those in the VITAL initiatives that distribute bonus amounts based on a teacher鈥檚 relative performance to others are more likely to have a positive impact on test scores, the analysis found. And those competitions did not appear to generate unhealthy competition.

Successful performance pay structures base teacher evaluations on factors beyond just student achievement, Goldhaber said. They also make the bonuses permanent by increasing base salary after multiple positive evaluations, for example, he said.

Matthew Springer of Basis Policy Research, an author of the meta-analysis, said it鈥檚 important to look at the 鈥渃ontinuous quality improvement of the program and its design, as well as the overall effect of what the program is having on the system as a whole.鈥

How merit pay can change the teaching pool

At the United School of Indianapolis, administrators say they鈥檙e already noticing a difference two years into the VITAL Trust award program.

鈥淚 definitely think that the type of people that we get is becoming different,鈥 Ciara Jones, principal of the Avondale Meadows Middle School within the charter network, said of the hiring process. 鈥淚t鈥檚 the people (who) want to be recognized and have opportunity to work hard and receive something.鈥

Teacher retention rates dropped across USI schools since the first round of the VITAL Trust awards from 2023-24 to 2024-25, according to data from the Richard M. Fairbanks Foundation. But leaders say they expect to see retention rates fluctuate from year to year while they focus on retaining high-performing teachers.

In the first two years of awards, 98% of bonus recipients returned to a USI school the following year, the network noted.

Damien Plaza, a social studies teacher at Avondale Meadows Middle School who won the $40,000 award in its first year, said he鈥檚 seen teachers increasing their level of commitment in response to the award.

鈥淚 think for all the people who received different levels of this award, it validates the feeling of excellence as a teacher,鈥 he said. 鈥淭eachers working here have a big lift on their shoulders. The receipt of this award is just a rubber stamp of, 鈥榊ou鈥檙e going in the right direction.鈥 鈥

Chalkbeat is a nonprofit news site covering educational change in public schools. This story was originally published by Chalkbeat. Sign up for their newsletters at .

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