In this report, the authors propose and simulate a framework for a new foundation formula approach to distributing federal K-12 education aid. This proposal, with full funding and compliance, would provide every school district with the estimated revenues necessary to reach the goal of average national outcomes in mathematics and reading. The framework is designed to target assistance where it is most needed by allocating federal funds based not only on student need (as is currently the case), but also on states' and school districts' ability (and willingness) to contribute themselves, given their capacity to raise revenue--in other words, based on their "effort." [The following contributed to this report: Burnie Bond, Preston Green III, Esther Quintero, Mary Cathryn Ricker, John See, Ajay Srikanth, and Vicki Thomas.]