Many schools request a school donation. It is voluntary, tax-deductible for parents, and does not attract GST. Schools state that the school donation is needed to bridge the gap between the costs of delivering quality learning over and above what the Government funds.
Schools typically use the funding to top-up the Operational Grant. Funds are tagged for items attractive to parents - e.g. additional teachers/small class sizes, ICT, or other learning resources, but as they are counted as income for operational matters in reality donations are indistinguishable from other operational grant expenditure, including any staff funded by the Board of Trustees.
The Government provides a higher Operations Grant for low decile schools because the decile represents the school community's socio-economic rank. As they get less Government funding, and because parents have more ability to pay, high decile schools typically request a larger donation.
On 10 May 2013, the NZ Herald reported that in 2012 parents raised "more than $357 million a year in donations and fundraising to support the "free" schooling system."