SEAs in the 40 states (41 including Washington, DC) with a state statute specifically authorizing the establishment of charter schools may apply. A state receives and then makes three-year subgrants to developers of charters in its state who have applied for or have already received a charter.

A state may reserve up to 10 percent of its allocation to support successful charter schools wishing to disseminate information. A charter school may apply for dissemination funds whether or not it has applied for or received funds for planning and implementation. To qualify for the dissemination funds, a school must also have been operating for at least three consecutive years and must have demonstrated overall success, including:

• Substantial progress in improving student achievement;

• High levels of parent satisfaction; and

• The management and leadership required to overcome start-up problems and establish a thriving and financially viable charter school.

If an eligible SEA elects not to participate, or if its application for funding is not approved, individual charters can apply directly to the U.S. Department of Education for funds under another grant program, the Non State Educational Agency (Non-SEA) competition.