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’s salary last fall, she was in shock. Like other staff at United Schools of Indianapolis’ three charter schools, she was eligible for a bonus based on her year-end evaluation score.

She just didn’t think she’d come out on top.

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

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

Buuck’s bonus comes from the $12.5 million Vigilance in Teaching and Learning — or VITAL — Trust, which launched in 2024 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 billions of dollars given to states to create performance-based pay systems, which the Trump administration also embraces.

The big question: Will it work? Research suggests that it could, if implemented in certain ways. But other studies suggest that narrowly focused merit-pay systems don’t deliver particularly well. And there are concerns dating back years that merit pay in general has little effect on student performance.

VITAL Foundation head Kelly Herron understands that money alone can’t solve the educator shortage. Instead, she said, the grants are part of a broader system to retain teachers.

“You have to create a culture in which this can work,” said Herron, who studied each school’s culture prior to awarding grants through school visits, staff focus groups, and surveys. “You can’t go into a school that already has a broken culture, and think that this is the magic wand.”

Merit pay hopes to address charter hiring challenge

Roughly 15 years ago, President Barack Obama’s Race to the Top initiative incentivized states to adopt merit-based pay structures.

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

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’t have to adhere to collective bargaining.

In the hiring game, charters may have the upper hand in at least one key respect. Charters received nearly twice as many applicants per opening as traditional school districts, 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 — 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’ name recognition.

The VITAL Trust bonuses, entering its third year, is based on a staff member’s numerical evaluation rating. The top 30% of performers receive an award that is weighted based on their score. In the program’s 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’s 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 — which was a pilot school for the VITAL Trust that received $5,000 per certified teaching position — 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.

“But the people who do well and are at Enlace for the long haul are here because they’re amongst peers who deeply care about their community and deeply care about getting strong outcomes for kids,” 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.

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

Some research suggests that certain merit pay structures — like one-time bonuses tied to year-end test score increases — don’t work well, Goldhaber said.

And merit pay like the state’s 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.

“What motivates them is wanting to be good at their job for their students,” she said. “And 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.”

On the other hand, a 2020 meta analysis of merit-pay systems 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’s 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’s important to look at the “continuous 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.”

How merit pay can change the teaching pool

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

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

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’s seen teachers increasing their level of commitment in response to the award.

“I think for all the people who received different levels of this award, it validates the feeling of excellence as a teacher,” he said. “Teachers working here have a big lift on their shoulders. The receipt of this award is just a rubber stamp of, ‘You’re going in the right direction.’”

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This article was written by Chalkbeat Indiana reporter Amelia Pak-Harvey.