I was surprised to see this presented as a 'dilemma'. The first duty of an educator and a school is to the student. One of the criteria for accepting a student to a school should be whether the school is able to offer "a program at which the student has a reasonable chance of success." If not, you are setting the student up for a school career of continual frustration and failure, which is unforgivable. In this case, there is another, more suitable alternative apparently readily available! (Sometimes, where no other Jewish school is accessible, parents will argue that having their child in a Jewish environment is their most important consideration. Here, you may - may - have elements of an ethical dilemma.) But to suggest that the potential of fund-raising from a family should take precedence over the welfare of their child is unconscionable.
Paul Shaviv
Paul Shaviv Consulting
