Assess Your Budget Needs
The first step is understanding your budget needs. The cost of a digital well-being product includes more than the sticker price. It consists of:
Initial product cost:
Licensing fees, subscription costs, or one-time purchase expenses.
Implementation costs:
Training, customizing, and integrating it with existing systems.
Maintenance and support fees:
Updates and technical support.
Scalability:
Expanding across multiple schools or grade levels.
Return on Investment (ROI)
Return on investment based on the impact on student well-being, academic performance, and administrative efficiencies
Accessibility and equity:
Accessibility features or upgrades for students and families who speak languages other than English and/or students and families with disabilities.
Long-term sustainability:
Longevity of the product and potential future costs.
Understand What Funding Sources are Available
Next, determine which funding sources are available to finance your selected digital well-being product. It is important to understand the advantages and limitations of each funding source, some of which are outside of your usual school and district funding pathways.
Complexity of Funding Streams
Simple approach
Moderate Complexity
Complex
Budget Reallocation
Many districts fund digital well-being products by reallocating funds from their existing budgets. By getting input and buy-in throughout the community engagement process, district leaders may identify areas of overlap or flexibility in departmental budgets.
Identify all existing potential sources of funding, including those that have been already allocated.
Identify any current programs that aim to accomplish similar goals that could be combined or eliminated to make capacity for new investments.
Identify potential return on investment, including cost savings or increased revenue that may result from implementing the product (e.g. improvements in student or teacher attendance rates).
Requires minimal administrative effort and can be implemented quickly without additional applications or external approval processes.
May allow for cost efficiencies and streamlining within the district.
Types of Community and Corporate Partnerships
Collaborate with social impact non-profit organizations dedicated to mental health advocacy. Some organizations may offer local chapters, grant programs, or in-kind services for digital well-being products in schools.
Engage local for-profit businesses or corporations in your region that support initiatives for youth or employee well-being. With for-profit insurance companies, start with your district health benefits administrator. Check official websites or corporate social responsibility reports for the latest information.
Examples
For-profit businesses, including technology companies
Banks, credit unions, and lenders
For-profit insurance companies and health systems
Explore partnerships with nonprofit insurance companies and healthcare providers in your region. Some of them may even be required to support their communities through community health benefit projects to keep their tax-exemption status. Funding or in-kind virtual services may be options.
Examples
Nonprofit hospitals/health systems for children and adults
Nonprofit insurance companies
Nonprofit corporations and mental health providers
Partner with colleges and universities interested in community well-being for access to research grants, interns, or resources to implement digital mental health services or products in schools.
Examples
Community colleges
Local/state universities
Research institutions
Philanthropic Funding
Many local, state, and national foundations have programs supporting mental health, children’s health, and/or education. Local community foundations and local United Ways may also have grant opportunities for schools. Some communities have corporate foundations that create and manage funds specifically to support children’s mental health and well-being in the communities where their employees live and work.
Search for philanthropic grant opportunities by exploring grant databases (such as those listed below) and connecting with local philanthropic foundations – including family, corporate, and community foundations.
Understand all requirements,
prepare grant proposals, and submit applications.
In some cases, it may be necessary to contract with outside development professionals for support in identifying funding sources, preparing grant proposals, and submitting applications.
Philanthropic grants exist exclusively to fund nonprofit organizations and schools, often with the mission and purpose of supporting student academic success and well-being.
Depending on your community’s resources, these grants can be substantial in size multi-year grants may be available.
Competition for grants can be high, and the application process may be time-consuming with stringent data collection requirements.
The application timeline for philanthropic grants can be long, with some philanthropic funders only considering funding requests once or twice a year.
Philanthropic grants often provide start-up funding to seed new programs and initiatives and cannot be relied upon for ongoing operating costs and long-term sustainability.
Resources to find grant opportunities include
Leading source of philanthropy, including an online database of over 242,000 grantmakers available to subscribers.
A national association of grantmakers who invest in education initiatives in all 50 states.
An organization with local chapters that can help connect you with other agencies and/or initaitves within your community.
State Allotments
State funding for mental health services varies from state to state. Some states have specific appropriations for school mental health purposes, while others have more general allotments or appropriations.
Learn More About State School Mental Health Funding
The Education Commission of the States released a policy brief titled
State Funding for Student Mental Health in March 2021. This report identifies available funding in various states.
Depending on how state funding is structured, funds for mental health services may be available to a district as part of the district’s state funding entitlement.
Dollars may also flow to the district with requirements for spending specific amounts. Using these restricted dollars, where mental health services are an eligible cost, can save general-purpose dollars for other costs the district may face.
Many of the individual allotments come with specific spending requirements, and each year, the school district must demonstrate that they spent a statutorily defined amount on direct and allowable programs and services.
State funding may be committed to other programs and expenses in the district’s budget and therefore may not be available for mental health services or products. In these cases, cost-benefit analysis may be needed to determine whether dollars should be shifted away from current commitments to new, potentially more impactful strategies.
State and Federal Government Grants
The largest and most common funding streams will likely come from state and federal grants. It is important to remember, however, that various requirements will accompany each type of funding. Grants—particularly federal grants—may include the most stringent requirements.
The funding landscape for school mental health initiatives is rapidly evolving, with shifting priorities, allocation levels, and application requirements across federal and state grant programs, requiring districts to remain adaptable and informed in their pursuit of sustainable support. The resources outlined in this section provide a valuable starting point, though specific program details and opportunities should be explored and evaluated directly from their sources, as they are subject to change.
Monitor for and identify relevant state and federal grant opportunities.
Consider grant requirements before pursuing funding. Failure to do so may lead to unanticipated challenges later, such as reduced funds, grant award revocation, disallowance of expenditures, or other audit findings.
Prepare grant proposals and submit applications.
Carefully track program, financial, and reporting requirements after receiving a grant.
In many states, there are special federal and/or state grants to support student mental health.
State and federal grants can be substantial and multi-year.
The pursuit of grant dollars may bring in new resources, freeing up other allotments and resources to meet other district priorities. This may be important when budgets are tight.
Competition for government grants can be high, and the application process may be time-consuming with stringent data collection requirements, particularly for federal grants.
Like private philanthropic grants, some state and federal grants are not meant to fund long-term, ongoing operating needs.
Types of Government Grants
State agencies administer many state and federal grants. Federal grants are funded through legislation passed by the U.S. Congress, and state grants are funded through legislation passed by state legislatures. Legislation authorizing the grant may define certain elements of the grant while leaving others to be determined by the agency.
These Department of Education grants are non-competitive and based on a formula that calculates specific grant entitlements for each eligible applicant. They are also called state-administered programs.
Funding is provided by a government agency that allows the recipient to use the funds according to their discretion, within certain guidelines; often awarded based on competitive applications.
Identifying Federal Grants
Grants.gov is an extensive online resource designed to enable federal grant applicants to find and apply for federal grants. It includes a searchable database of grant opportunities and a Grants Learning Center to learn about many topics related to federal grants. You can also subscribe to receive funding announcements.
The Department of Education offers many different grants to support schools. The
Office of Elementary and Secondary Education (OESE) administers several
discretionary grants for which Local Education Agencies (LEAs) may be eligible
School-Based Mental Health Services Grant Program.The Substance Abuse and Mental Health Services Administration (SAHMSA), which was absorbed by the Administration for a Healthy America (AHA) in April 2025, previously administered two block grants that were often used to support student mental health.
Grants.gov is a useful tool to keep informed on all federal grant opportunities, including for information about similar block grants moving forward.
The
Department of Justice supports schools in developing approaches for children who are exposed to violence.
Identifying State Grants
- State education agencies: Contact your state education department for information on available state or federal grants administered by the agency.
- State health or mental health programs: Contact your state health department for information on relevant budget allocations, especially for digital mental health products.
- Others: Other state agencies or the governor’s office may also have information about available grants.
Medicaid (Healthcare) Reimbursement
With
nearly 40% of the nation’s youth receiving health coverage through Medicaid, it can be an important funding stream for targeted or individualized support in your broader funding strategy. While Medicaid does not currently reimburse for or provide direct funding for digital health tools and products, most Medicaid programs allow covered mental health services such as evaluations, medication management, and psychotherapy to be provided via telehealth.
While there is substantial federal oversight of Medicaid, each state operates its own program and is responsible for determining the structure and policies that drive it. States Medicaid programs are operated by a State Medicaid Agency (which may operate within a larger umbrella agency or may operate independently). Consult with your state’s SMA to understand how the considerations outlined below apply in your state.
Contacting your SMA
Find out how to contact your State Medicaid Agency (SMA) by using the
Medicaid.gov search tool. Your state education agency may partner with this agency and can be a valuable resource as you weigh the costs and benefits of Medicaid.
What it Takes
Key factors to consider when evaluating if Medicaid reimbursement is an appropriate part of a funding strategy for your school district:
Eligibility for Medicaid varies from state to state and will impact the proportion of school-aged children receiving coverage through Medicaid. The ability to be reimbursed for services provided to Medicaid enrolled children in a school setting also varies and is dependent on state laws and rules. In all states, school districts can seek Medicaid reimbursement for some health and behavioral health services provided in school-based settings to some Medicaid eligible children. Given the variation between states, you will want to first consider the volume of school-aged children eligible for school-based Medicaid services, as this will inform how much of an impact Medicaid reimbursement may have on your funding strategy.
Determination of covered services within a
Medicaid program is another process that occurs primarily at the state level. While nearly all states’ Medicaid programs reimburse for basic mental health services such as psychotherapy, medication management, and evaluation, the full scope of services covered by Medicaid varies widely from state to state. Additionally, the policies dictating specific aspects of service delivery such as where a service can be provided, provider qualifications, frequency and duration of service delivery, and allowable interventions also vary widely. Districts should consult with the SMA to understand what services are eligible for Medicaid reimbursement and their related policies.
School districts should be aware that healthcare reimbursement requires a significant amount of administrative oversight and risk, including challenges with documentation, billing, reimbursement, and consent processes. These challenges may be greater for small, rural, or under-staffed districts due to the workload required to access these funds. Districts may prefer partners or telehealth vendors to fill this role. The Centers for Medicaid and Medicare Services also provides
technical assistance, which districts may access in partnership with your SMA.
Even if your district determines it is not feasible or efficient to seek Medicaid reimbursement on its own, school districts may be able to enable healthcare reimbursement through careful selection of the digital mental health partner. Some telehealth companies, such as Hazel, Kooth, or Headspace, may handle Medicaid and other healthcare reimbursement for the schools with which they work. These companies can likely provide you with information specific to your state regarding the feasibility of this option.
Advantages:
Disadvantages:
May not be available for the full scope of mental health services provided via telehealth
There is significant administrative oversight and risk, including challenges with documentation, billing, reimbursement, and consent processes.
