The lifeblood of efforts to rethink schooling or devise new solutions is the money it takes to make them work. These dollars can come from three sources: profit-seeking investors, philanthropy, or government. To date, the lion’s share of the bucks have come from philanthropy. In a new piece published today in Education Next, “Fueling the Engine,” I explore why entrepreneurs have had trouble raising funds and how the philanthropic sector has sought to tackle that challenge. (The article is an excerpt from my new book Education Unbound).

This is all of particular relevance today, as more than 2,000 districts, schools, and nonprofits have notified the U.S. Department of Ed that they’ll be submitting applications for i3 grants. “We’re making an unprecedented investment in cutting-edge ideas that will produce the next generation of school reforms,” Secretary Duncan said when he announced the grant competition. Over $650 million in funds will be awarded, and a coalition of foundations announced last week that it will offer up to half a billion dollars to match the federal grants.

This is an intriguing development. Whether this federal investment deepens the pool of resources for new providers (especially in light of the “collaboration” between ED and twelve major funders) or swamps the sector and enriches some while making it harder for others to get a hearing remains to be seen. Remember, the i3 investment probably amounts to a third or more of school reform investment in the U.S. this year, and the follow-up $500 million will increase its impact even more. This could be a substantial boon to innovation and a spur for new providers to take evaluation and scale far more seriously, or it could result in cementing the status of popular outfits that know how to write grants, land influential consultants, and afford high-priced evaluation. Ultimately, it will probably be something of each, and we need to do what we can to tilt that mix in the right direction.

To do so, it’s useful to note why entrepreneurs have so often struggled to land support and the role that venture funders have played. The key problem historically has been that when funding is scarce, the leaders of an entrepreneurial venture have to spend too much time fundraising and not enough time leading their organizations. Here’s hoping that i3 can change that, without raising new concerns about groupthink, the influence of politically connected players, or the tyranny of overly narrow evaluation metrics.