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philanthropists
Last February, in a speech in Washington, D.C. that drew 45 of
the nation’s governors as well as a hefty sample of the nation’s education policy elite, Microsoft chairman Bill Gates issued a jeremiad on the state of the American high school, arguing that this venerable institution is obsolete and a threat to the nation’s economic and political well-being. Declarations that public education in general and high schools in particular turn out badly prepared graduates, perpetuate inequities, and generally operate in ways that run counter to the nation’s interests have become almost commonplace. But coming from Gates, whose prodigious wealth and aggressive tactics have become one of the nation’s best-known narratives of entrepreneurship, the words took on new meaning. Stories in the New York Times, Los Angeles Times, Washington Post, and many other newspapers, most written not by education reporters but by Washington-based political and legislative correspondents, reported Gates’s assertions in an unquestioning, almost awestruck tone that made one thing clear: if high schools are bad enough for Bill Gates to declare BY them a disaster, then it must be so. RICHARD LEE COLVIN It was publicity that even the world’s richest man could not buy. But Gates’s standing to speak authoritatively on the issue rested on more than his wealth, celebrity, and business acumen, or even his company’s need to hire well-trained workers. Through the efforts of his richly endowed Bill & Melinda Gates Foundation, Gates has become an unparalleled force who is not only sounding the alarm about America’s high schools, but is also putting forth, and financing, a range of specific solutions. Since 2002, the Gates Foundation has allocated more than $1.2 billion toward creating about 820 new high schools and breaking down about 750 large, comprehensive high schools into smaller, more focused, more intimate academies that aim to send far more students off to college prepared to succeed. The foundation is also the lead partner in a $125 million experiment in “early college” high schools, which are designed to enable 9th graders to get their high-school diplomas as well as two years of college credit, all within four or five years. To increase the impact of its initiatives, the Gates Foundation has involved 13 other foundations and is working with more than one hundred intermediary organizations in two hundred cities located in almost every state. The foundation’s goal is ambitious: to improve the national graduation rate to at least 80 percent,
New
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Can Their Millions Enhance Learning ?
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ILLUSTRATION BY SANDY HAIGHT
expected to swell. Over the next two decades, Americans will pass on to their heirs huge sums, approximately $1.7 trilTypically, about 25 percent of lion of which will go to charities and to endow foundaphilanthropic dollars goes to tions. And, typically, about The Money Pours In 25 percent of philanthropic education, although more goes American philanthropy, by dollars goes to education, local and national foundaalthough more goes to higher tions, corporations, and education than to elementary to higher education than to wealthy individuals, has played and secondary schools. Gates, many important roles in K–12 just to use one example, has a elementary and education: creating new schools, personal net worth estimated by Forbes magazine to be $46 billion, underwriting research, funding secondary schools. and he has vowed to give away 95 perscholarships, testing hypotheses, gencent of his assets during his lifetime. erating new curricula, invoking ideals, setting agendas, bolstering training, and building a case for policy changes. Foundation money is so The New Philanthropists widespread, and so sought after, that few in education are Plenty of other heavyweights in the world of business are conunaffected. Indeed, institutions with which both this author and tributing heavily to education causes already. They include Jim this journal are affiliated receive support from several founBarksdale, the former chief operating officer of Netscape, who dations mentioned here. gave $100 million to establish an institute to improve reading Nothing about this is new. Thousands of schools for instruction in Mississippi; Eli Broad, the home builder and African American students across the Jim Crow South were retirement investment titan, whose foundation works on a built with the backing of the Rosenwald Fund, one of the earrange of management, governance, and leadership issues; liest and most important foundations in education; philanMichael Dell, the founder of Dell Computers, whose family founthropist Grace Dodge founded Teachers College, now at dation is valued at $1.2 billion and is a major supporter of a proColumbia University, in 1887, which led to training of teachgram that boosts college going among students of potential but ers in pedagogy; the Ford Foundation was involved in promiddling accomplishment; financier and buyout specialist moting the employment of classroom aides, National Merit Theodore J. Forstmann, who gave $50 million of his own Scholarships, and the development of Advanced Placement money to help poor kids attend private schools; David Packard, curricula and tests; the National Board of Professional Teacha former classics professor who also is a scion of one of the ing Standards grew out of work funded by Carnegie Corpofounders of Hewlett-Packard and has given $75 million to help ration of New York, which also funded the Educational TestCalifornia school districts improve reading instruction; and the ing Service to develop objective ways of measuring academic Walton Family Foundation, which benefits from the fortune of merit, which led to the SAT. More recently, Ford and the the founder of Wal-Mart, and which is the nation’s largest supRockefeller Foundation supported the work that led to equity porter of charter schools and private school scholarships (see lawsuits, dramatically altering how schools are funded in “A Tribute to John Walton,” p. 5). many states. Even if the $1.5 billion that philanthropists As is clear from this partial list, many of the newcomers are spend on K–12 education is paltry compared with the $450 in the West, or otherwise far from the old-money power cenbillion annual price tag for the system as a whole, all of these ters of the East. A number of the individual donors did not come are examples of the huge impact that well-placed philanfrom money, but attended public schools before amassing thropy dollars can have (see Figure 1). their fortunes. As a group, they share a belief that public eduEven though some foundations have reduced their involvecation has not done well by immigrants or poor students, ment in K–12 education or shifted their education investment hardly a radical claim. But they are less likely than were donors to prekindergarten or afterschool programs, far more philanin the past to think that the solution to that problem lies solely thropists are entering the scene than are leaving, says Bill Porter, executive director of Grantmakers for Education. or even primarily in spending more money or even in making the allocation of resources more equitable, which has been Indeed, according to the Future of Philanthropy project, an a common thread in work that many better-established founanalysis done by a Cambridge, Massachusetts, consulting dations have pursued. group, the number of foundations involved in education is
from about 65 percent, while increasing the likelihood that all high-school graduates are college-ready. So, more spending, in more places, is likely on the way.
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The San Francisco-based Pisces Foundation, for example, was endowed by Donald Fisher, founder and chairman emeritus of the Gap clothing chain, and his wife, Doris. By 2005 Pisces was the biggest single supporter of Teach for America, a nonprofit that has, improbably, made teaching in poverty-ridden urban schools one of the most popular career choices of students at Ivy League colleges. Pisces also gave about $35 million to fund the national expansion of the instructionally demanding Knowledge Is Power Program charter schools, which serve mostly low-income students. Overall, the foundation is spending about $20 million a year to “leverage change in public education—especially in schools serving disadvantaged students—through large strategic investments in a small number of initiatives that bolster student achievement.” That rate of spending was about the same as that of the venerable Carnegie Corporation and would have put the foundation in the top ten or so givers to K–12 in 2002. (See Table 1). Like Fisher, other new philanthropists tend to believe that schools, in addition to securing adequate financial resources, need to embrace accountability and to overhaul basic functions. Many are personally involved in overseeing the grants they give and they insist on results from educators and schools. They believe good leadership, effective management, compensation based on performance, competition, the targeting of resources, and accountability for results can all pay dividends for education as well as for foundations. They tend to set ambitious goals for their own work and to be aggressive in pursuit of their agendas. That, too, is something of a departure for philanthropists, who have tended to stay in the background and let their grantees set their own goals while they bask in the spotlight. “These are people who made money challenging the status quo,” says Barry Munitz, president and CEO of the J. Paul Getty Trust, referring to the new givers.“These high net worth, first-generation folks…approach their gift-giving the way they approached their investing—due diligence, measures of accountability, a lot of involvement, each with an agenda. It’s very different from spending money on the system and standing back and letting it work.” But it’s not always easy for foundations to manage the tradeoffs between aggressively pushing school districts in a certain direction and respecting the wishes of a community and its leadership; between demanding quick results and acknowledging the complexity of school reform and the intransigence of bureaucracies; between investing in something new and injecting operating resources into a project already under way. In thinking about these dilemmas, many in the philanthropic world continue to cite the 1993 Annenberg Challenge as an example of what they want to avoid. The $500 million challenge issued by former ambassador and publishing mogul Walter Annenberg is still the largest philanthropic gift ever given to American public education. After
A Grain of Salt (Figure 1)
Even if philanthropic foundations allocate their funds effectively, it remains unclear whether reform in the multibillion-dollar public-education enterprise can be achieved with annual philanthropic expenditures of $1.5 billion.
Philanthropic and Government Spending on Education
500
435
Billions of Dollars (2002)
400
300
200
100
1.5
0
Philanthropic spending
Federal, state, and local expenditures
SOURCE: U.S. Census Bureau; Jay Greene, “Buckets into the Sea: Why Philanthropy Isn’t Changing Schools, and How It Could,” prepared for American Enterprise Institute conference, “With the Best of Intentions: Lessons Learned in K–12 Education Philanthropy,” April 25, 2005, Washington, D.C.
being matched by more than $600 million in goods and services from the local communities that were recipients, the money was given to nine large city school systems, a consortium of rural schools, and two national school-reform groups, among others. In some ways, the amount of money involved was both too much and too little. Some have said the money was doled out with far too little oversight by the foundation. But others contend that, in the foundation’s effort to affect a number of communities, its impact was diluted. “We spread ourselves too thin,” remarked Harold Williams, president emeritus of the J. Paul Getty Trust and a board member of the Los Angeles organization that was spawned by the Annenberg grant. “If we had taken on fewer school families and focused our dollars and human resources on those, we would have accomplished more.” Guilbert C. Hentschke, dean of the school of education at the University of Southern California, one of the main partners in the challenge, is now studying the impact of philanthropy on education. He says that the Annenberg grant met “the
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classic definition of a professional between $4 billion and $6 billion, reform,” meaning that it mostly is in his 70s, and he too plans on Gates Foundation officials paid for more of what already giving away most of that was going on in the schools. amount during his lifetime. For the most part, he says, are also aware that, unless pub- Most of it will go toward “The school districts and the K–12 education causes, schools gobbled up those Dan Katzir, lic money takes over when private according to foundation’s grants like lunch, and they the education were ready for the next one.” managing director. money goes away, the innovative What may have been needed The foundation supinstead, Hentschke says, was ports a number of what a “radical”reform that started Katzir calls “branded flagapproaches the foundation is with an empty slate and ship initiatives,” such as the redesigned the most basic operBroad Center for the Managefostering will disappear ations of the schools. Many of the ment of School Systems or the leading donors today are trying to Broad Institute for School Boards. with little impact. figure out how to do just that. Its largest investment is a $20 million-plus stake in SchoolMatters.com, a project of Standard & Poor’s School EvaluHigh Schools ation Services unit that marries information about The Gates Foundation has attempted some of that reimagining how schools spend their money with academic indicators. with its high-school initiative, which brought together other Another major foundation that has invested heavily— philanthropies, including Carnegie, the Open Society Institute, even more so than Broad—in improving the skills of prinAnnenberg, the W. K. Kellogg Foundation, Walton, and Ford. cipals and superintendents is the Wallace Foundation, which Carnegie alone has put in $60 million for its Schools for a New was established by DeWitt and Lila Acheson Wallace, the Society high-school redesign effort, which aims to overhaul founders of the Reader’s Digest Association. In 2000 the all the high schools in a district.“We’re not ideological about foundation committed $150 million over five years to attacking the problem,” says Tom Vander Ark, who is in charge improving leadership at the school and district level and is of the Gates Foundation’s education work. “We’re trying to now underwriting in 24 states a wide variety of programs: attack it in many different ways.” leadership academies, university-school district partnerGates Foundation officials are also aware that, unless ships, research, changes in what it takes to become certified public money takes over when private money goes away, the as a principal, and superintendent training. Wallace and innovative approaches the foundation is fostering will disBroad, as well as Annenberg and Gates, also are underappear with little impact. “In the narrowest sense, it’s a $10 writing the New York City Leadership Academy, a very billion to $20 billion problem that we’re attacking, and over expensive undertaking that pays aspiring principals full time we might contribute a tenth of the solutions it will salaries as they train for a year to take jobs heading up require,”Vander Ark says.“It would be difficult, impractical, schools in the city. expensive, and ineffective for us to do this work ourselves.” The Wallace Foundation’s Richard Laine emphasizes that it is not enough just to improve the training of principals. Put a well-trained leader in a bad system, he’s fond of saying, and Leadership, Management, and Governance “The system will win every time.”What’s needed, he says, are By the end of 2004, the education foundation established by policy changes, giving the best teachers incentives to go into Eli Broad and his wife, Edythe, had assets worth $540 milthe most demanding schools and allowing principals to lion. The foundation has already committed some $135 milhave more control over hiring and evaluating teachers and lion to overhauling fundamental aspects of urban school dismore flexibility and control over their budgets. tricts: identifying new sources of talent for positions of authority; developing alternative training methods for manTeaching agers, principals, and teachers union leaders; creating new tools for analyzing performance data; and working with Improving teaching has long been high on the agenda of many foundations.“It really all boils down to good teaching,” school boards to help those sometimes obstructionist bodsays Janice Petrovich of the Ford Foundation.“If you can figies become more focused on student learning than on petty ure out how to do that, you’ll make a difference.” power plays. Broad, whose fortune is variously estimated at
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That, however, turns out to be difficult for foundations to do well and even more difficult to sustain. Foundations actively working on this front today have a wide variety of strategies for making a difference. Some of these might be categorized as efforts to build the capacity of the current system by simply paying for professional development sessions on particular topics; others might be thought of as attempts to change the system by developing new approaches to hiring, compensating, and evaluating teachers. Ultimately, Petrovich says, increasing the capacity of the system changes the system. But foundations often are reluctant to work inside classrooms to help teachers, for fear that they won’t have a systemic impact; at the same time, to make a difference broadly, foundations have to fund projects over which they have little control. One of the most ambitious efforts to improve teaching is called Teachers for a New Era, a $65 million project underwritten by four venerable foundations: Carnegie, which initiated the effort and has the largest stake; Annenberg; Ford; and the Rockefeller Foundation. As of 2003, 11 education schools had received five-year grants to develop teacher-preparation programs that mimic the kind of clinical training that
doctors receive as residents and that pay more explicit attention to the effect of the training on student learning. The grants must be matched locally. The Milken Family Foundation has spent well over $100 million to make teaching more attractive by recognizing achievement and pushing districts to base pay on performance. The foundation’s Teacher Advancement Program, which provides training opportunities to help teachers climb a career ladder toward higher salaries based on their performance, is now in place in 85 schools and is poised for a major expansion, with states and the federal government offering financial support. “We are hell-bent on figuring out a way of creating the proper incentives and putting them into practice to attract talented people into the profession,” Lowell Milken says. Another foundation committed to improving teaching is the William and Flora Hewlett Foundation, where Marshall Smith, a former acting deputy secretary of education in the Clinton administration, heads up education reforms. The former dean of the Stanford University School of Education, Smith is perhaps the leading proponent of what’s known as “systemic” reform in education. He says that about half of the
Smart Money? (Table 1)
Of the 15 foundations that gave the most, a majority of their giving constituted little more than donations to the current public education system (lower-leverage). But $235 million was spent on higher-leverage efforts to alter the public school system through major interventions such as small schools, charter schools, and vouchers.
Millions of dollars, 2002 Foundation Bill & Melinda Gates Foundation Walton Family Foundation Annenberg Foundation Carnegie Corporation of New York Lilly Endowment New York Community Trust Ford Foundation W. K. Kellogg Foundation William and Flora Hewlett Foundation Oberkotter Foundation MBNA Foundation Danforth Foundation Pew Charitable Trusts Goizueta Foundation Total Higher leverage 111 68 9 6 5 8 4 7 6 0 2 0 9 0 235 Lower leverage 135 10 31 19 18 13 17 14 13 18 14 15 6 13 336 Total 246 78 40 25 23 21 21 21 19 18 16 15 15 13 571
SOURCE: Jay Greene, “Buckets into the Sea: Why Philanthropy Isn’t Changing Schools, and How It Could”
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$36 million or so he has to spend support, by one estimate, 10 percent on K–12 education annually of all the nation’s charter schools. goes to “trying to figure out “Our theory is that competition ways of improving instrucin a high enough degree will tion in inner-city schools.” eventually create competitive Journalists rarely criticize Academic content and pressures to encourage the performance standards are to really try foundations on substantive issues existing systems says Buddy now well ingrained in and compete,” American public education, Philpott, the foundation’s and are far more likely Smith believes. But the stanexecutive director. dards movement that he had a hand in launching “really to laud them than to question Can Philanthropy Make doesn’t touch the classroom a Difference? in a deep way. What’s arisen in their strategy or It is often difficult to tell whether the past five or six years as an a foundation is making a difference. issue is the quality of the teacher their impact. Outside of evaluations paid for by the and whether we have the capacity and foundations themselves or even done smarts and knowledge to improve that.” internally, philanthropy often receives little scrutiny, and philanthropists are often treated like celebrities. Frederick M. Hess, an editor of this journal, anaSchool Choice During the past decade, the nation’s foundations have lyzed press coverage of leading philanthropies involved in education for the publication Philanthropy. He concluded that become major champions of school choice, supporting the development of charter schools and, to a lesser extent, the journalists rarely criticize foundations on substantive issues financing of vouchers to pay for private school tuition for and are far more likely to laud them than to question their low-income students. Indeed, it seems that many of the strategy or their impact. major foundations involved in education are backing charWere journalists or others to attempt it, though, it is probter schools in one way or another, either by supporting indiably easier now than in the past to determine the impact of vidual sites or by financing research or advocacy designed philanthropy. That’s because, in response to the national to promote policies friendly to charters. push for academic standards and accountability, moveBroad has nine separate school-choice initiatives. A sigments fueled by philanthropy, states now are required to test students and report on the results. When the Annenberg nificant number of the high schools Gates is supporting are Challenge was being evaluated, for example, the use of test charter schools. The Annenberg Foundation gave more than scores as one measure of the grant’s effectiveness met resis$10 million to underwrite an architecturally daring buildtance in many cities where it operated. Today, it is expected ing for the Accelerated School, a highly successful charter that changes in test scores will be factored into the evaluaschool south of downtown Los Angeles. Financier Theodore tions of interventions. J. Forstmann, along with the late John Walton (see “Tribute,” But some worry that demanding rapid test-score gains from p. 5) each gave $50 million to start the Children’s Scholarfoundation-backed reforms could lead to the abandonment ship Fund, which subsidizes private school tuition for lowof promising practices before they have a chance to prove income students. In 2001, according to the Foundation Centhemselves. That is why foundations such as Gates and Broad ter, the Fund was the ninth-largest recipient of charitable and others are trying to be strategic in the degree to which they donations in the area of K–12 education, and in 2002 it was rely on test scores as indicators of progress and are also monthe top recipient. Forstmann and Walton helped raise another itoring a number of other changes including graduation rates, $70 million for scholarships from donors that included attendance, and qualitative changes. Broad, former Hollywood super agent Michael Ovitz, and Needless to say, there is a rich history of success and failsupermarket mogul Ronald W. Burkle. ure to learn from. In 1972 the Ford Foundation published a Since 1998 the Walton Family Foundation started by Sam remarkably frank critique of its own education reform efforts and Helen Walton, the founders of Wal-Mart, has given an during the 1960s. Called “A Foundation Goes to School” and estimated $284 million to K–12 education, the bulk of that written by Ed Meade, Ford’s longtime education program to support charter schools and private school scholarships officer, the report observed that the projects the foundation for low-income students. The foundation is by far the supported “underestimated the complexity of improving biggest donor to school choice-related causes and has helped
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schools” and did not fully account for the difficulty of working with unions, community leaders and parents, or the effect of broader social conditions. Foundations can’t impose their view of how the district should operate, in what Marshall Smith calls a “mega-reform.” The challenge for foundations, then, is not to create the initiative that will work precisely as planned. The challenge is to use a variety of strategies—investment, capacity building, the creation of competition, parallel structures that challenge the status quo—to help the schools and districts themselves do a better job. Tom Payzant, the veteran superintendent who heads up Boston Public Schools, says large school districts get funding from a variety of philanthropic organizations, but he has had to work hard to persuade these funders to align their efforts to support a system-wide vision of how to improve education and avoid contributing to what he calls “project-itis,” which is just a series of ad hoc donations that make givers feel good but have little impact on students. “It’s been very hard for educators to stand up and say, ‘I don’t want the money unless it’s aligned with what we’re doing,’ without being snooty about it,” he says. Lowell Milken says that one way to judge the work of foundations is whether other givers get on board and whether a project changes the way the district does business. “Is the
district willing to adjust its budget and, if a project meets its goals, will they take on the whole cost? All those issues are critical to us, in looking at how we should proceed.” Despite the sometimes gloomy assessments of philanthropy’s impact, there is reason for hope. Giving to K–12 education will surely increase. Foundations are working together much more than in the past. They seem to recognize that public policy has to change if their projects are to be sustained, and foundations are becoming more active in the policy arenas. The philanthropists are funding outside evaluations, and they seem to be more transparent and forthright about the shortcomings of what they’re funding as well as their successes. Vander Ark of the Gates Foundation openly acknowledges that 10–20 percent of the foundation’s grants are not working, and another 10–20 percent are working out differently than planned. If it were otherwise, he says, one would suspect that the foundation was only placing safe bets, and safe bets are unlikely to produce the major improvements that are needed in education.
Richard Lee Colvin is director of the Hechinger Institute on Education and the Media, based at Teachers College, Columbia University. This article is adapted from a chapter in the forthcoming book The Best of Intentions: How Philanthropy Is Reshaping the Landscape of K–12 Education.
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