School Trust Funds

Wisconsin's four School Trust Funds are the Common School Fund, the Normal School Fund, the Agricultural College Fund and the University Fund. As of 2026, balances in these funds amounted to more than $1.6 Billion. As fiduciary, BCPL invests the funds for the benefit of public school education.

This Fund is as old as Wisconsin. The framers of our state Constitution, in Article 10, established this permanent "school fund" and required that its income be applied exclusively "to the support and maintenance of common [public K-12] schools ... and the purchase of suitable libraries and apparatus therefor."

The Fund was established with proceeds from the sale of the 16th Section of each township - nearly 1 million acres of land granted by the federal government to Wisconsin upon statehood. Except for ~6,900 acres that remain in trust, all of the lands from these original grants were sold to establish the Fund.

Like other states joining the union at that time, Wisconsin received another grant from Congress of 500,000 acres of land for the purpose of making "internal improvements." Wisconsin's early leaders petitioned Congress for permission to dedicate these lands for public education, as well.

The Common School Fund principal continues to grow because the state's constitution provides that the Fund receive “all moneys” and the clear proceeds of fines and forfeitures (including unclaimed and escheated property) that accrue to the state. This important source of principal growth and support for public education has been eroded from historical levels as "clear proceeds" is redefined and governing bodies impose "surcharges" in lieu of fines. For example, the Common School Fund today receives less than 10% of the revenue from a typical speeding ticket.

The investment authority of the BCPL was expanded by the State Legislature in 2015 to include Prudent Investor Authority. BCPL has now diversified the Fund across a number of asset classes designed to produce a steady stream of distributable income, along with growth in the principal of the Fund. The Investment Policy Statement approved by the BCPL Board includes the following mission statement:

The largest investment allocation is to the BCPL State Trust Fund Loan Program. These loans provide funding necessary for Wisconsin municipalities and school districts to pursue thousands of public purpose projects including economic development, local infrastructure, capital equipment and vehicles, and building repairs and improvements. State Trust Fund Loans have been originated by BCPL since 1871 and provide a good rate of return with very little risk. There has not been a single loan default in the 155+ year history of the program.

Growth from fines, forfeitures, unclaimed property, and now capital gains has pushed the total principal to more than $1.65 billion (2026). Earnings from investment of the Common School Fund are directed to provide the sole state aid for the purchase of public school library media and resources. In 2026, $73.5 million was distributed among the 421 Wisconsin school districts for library aid.

Visit the Department of Public Instruction to learn how the Common School Fund benefits public education.

At the time of statehood, the founders mandated that excess common school fund revenue should go to teachers' colleges, then called "normal schools," although none existed at the time. In 1865, following the sale of some federally granted swamp land, and with common schools adequately funded, the legislature established the trust fund principal for a unique Normal School Fund. By the 1930s, normal schools evolved into state colleges which, in turn, became part of the University of Wisconsin System. While much smaller than the Common School Fund, earnings from the Normal School Fund continue to go to the University of Wisconsin for scholarships and programs in accordance with Wisconsin Statute 36.49. In Fiscal Year 2026, the distribution was $2.3 million, an all-time record.

In 1838, Congress granted to the Territory of Wisconsin the equivalent of two townships, or 72 square miles of land, to be sold to support a university. In 1854, Congress granted more land - an additional two townships - to benefit a university. Most of these lands were sold soon after Wisconsin obtained title, and no provision was made for adding to the principal. Therefore, the principal balance of the University Fund, $234,129.75, does not change from year to year.

The Agricultural College Fund was established with a land grant pursuant to an 1862 act of Congress known as the "Morrill Act." The law provided that each state was entitled to receive 30,000 acres of land for each member of Congress representing the state. Wisconsin had eight Congressional representatives, so the state received title to 240,000 acres of land. Proceeds from the sale of these lands were to be invested in a perpetual endowment fund to support "colleges of agriculture and mechanic arts" in each of the states - our nation's land-grant colleges.

These lands were sold shortly after Wisconsin obtained title, and no provision was made for adding to the principal. Therefore, the principal balance of the Agricultural College Fund, $307,076.35, does not change from year to year.