August 21, 2005
Young Students Are New Focus for Big Donors
By TAMAR LEWIN, NY TIMES

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In the world of education philanthropy, colleges and universities have traditionally received about twice as much grant money as elementary and secondary schools.

But in the last few years there has been a quiet revolution in education giving, as a new generation of wealthy entrepreneurs, concerned about high dropout rates and low achievement levels, has begun pouring so much money into projects for kindergarten through 12th grade that such grants now outpace foundation giving to higher education.

According to the Foundation Center, which tracks and analyzes foundation giving, large foundations gave $1.23 billion in grants to elementary and secondary schools in 2003, the latest year for which data is available. That same year, higher education grants totaled $1.12 billion. It was a sharp turnaround from five years earlier, when K-12 grants were about $620 million, compared with $1.07 billion for higher education.

But it is not only the size of the grants that has changed. The nature of the philanthropy has undergone a profound shift.

"A lot of the old philanthropy was devoted to helping schools do what they were already doing," said Richard Lee Colvin, director of the Hechinger Institute at Teachers College at Columbia University. "The new group is saying, 'Let's try something different.' It's a lot of young, active entrepreneurial people - Bill Gates, Eli Broad, the Waltons, Dell, Milken - who want to change the schools, who want to use their money to support specific school reforms."

Many of these entrepreneurs turned philanthropists talk passionately about a fundamental injustice in public education, with poor minority children getting nowhere near the educational opportunities of wealthy white ones.

And they are not shy about using the philanthropic podium to preach the gospel of school overhaul, as Mr. Gates did earlier this year when he appeared at a National Governors Association meeting in Washington and delivered a blistering critique of how obsolete high schools are ruining the lives of millions of Americans every year.

"A number of us have come to believe that the biggest problem America has is the state of our schools," said Mr. Broad, the entrepreneur from Los Angeles who founded KB Home, a maker of prefabricated housing, and SunAmerica, an insurance company. He started the Broad Education Foundation in 1999, and has made it the centerpiece of his $1.2 billion network of foundations.

"The world has changed dramatically, with globalization and free trade, moving from an industrial economy to an information economy," Mr. Broad said. "But while that's been happening, K-12 education hasn't changed at all. Meanwhile, China's graduating five times as many engineers as we are, and you look at India and you get alarmed."

Many foundations, espousing different approaches, are putting huge sums of money into K-12 education, but not always in existing public schools.

The Walton Family Foundation, created by Wal-Mart's founder, Sam Walton, and his wife, increased its annual K-12 giving almost tenfold from 1998 to 2003, to $45 million, mostly to support charter schools and tuition vouchers for low-income students.

Many foundations focus on attracting and training good teachers, principals and administrators. The Milken Family Foundation has spent more than $100 million on programs to attract and reward new teachers. The Wallace Foundation committed $150 million over five years to improve school leadership. The Michael and Susan Dell Foundation, founded in 1999 with assets of more than $1 billion, has given large sums to Teach for America, which places recent college graduates as teachers in urban and rural schools, and New Leaders for New Schools, which helps train people to become urban school principals.

But the Bill and Melinda Gates Foundation is by far the largest player in the field, investing $1.2 billion in K-12 education over the last five years, including $100 million to New York City to help create small high schools, $100 million for a network of early-college high schools in dozens of states, and $36 million to support the conversion of 20 large Ohio urban high schools into 75 autonomous small schools.

Some urban school superintendents say that support from the Gates Foundation has allowed them to move ahead with plans for change far more quickly than they could have without it.

"When I first got the job, Gates put in $20 million to help us break up some large high schools," said Arne Duncan, who became head of the Chicago Public Schools four years ago, adding that the money had been important in creating momentum for the changes he sought. "It's allowed me to take some risks I wouldn't otherwise have been able to.

"We have a real partnership with them, and I expect that it will be long term. At the same time, we say no to people who want to fund things that aren't part of our core strategy."

Over all, it is too soon to say how much impact the outpouring of new giving will have in the sprawling, locally run $400 billion enterprise of educating the nation's children.

"Even with the Gates money, it's still a drop in the bucket," said William Porter, the executive director of Grantmakers for Education, an organization of 180 foundations that makes gifts to educational programs.

The last big K-12 push, the five-year, $500 million Annenberg Challenge, announced with a flourish at the Clinton White House in 1993, stands largely as a cautionary tale of money spread widely and with little focus. Some of the projects it supported were successful, but it had little overall impact.

"Annenberg didn't do much to change the bloodstream of public policy," said Frederick M. Hess, the director of education policy studies at the American Enterprise Institute. "It did make ripples, but they were so spread out that there was only a small impact on education in this country."

The lesson has not been lost on the new philanthropists.

Indeed, most of today's education donors are far more focused in their efforts, whether it be the Walton Foundation's backing of parental choice through charter schools and scholarships to private schools, or the Broad Foundation's emphasis on school management, or the Gates Foundation's push for high school change.

"I think about Annenberg every week," said Tom Vander Ark, executive director of the Gates Foundation's education program.

But even with a sharp focus, Mr. Vander Ark has found, getting results is not so easy. "The biggest lesson learned to date?" he said. "It is even harder than we thought to create widespread improvement. My dad is a brain surgeon; this is more complicated."

While Gates-backed projects may achieve obvious success in improving vaccines, or in conquering malaria, Mr. Vander Ark acknowledged, there is no silver bullet that will assure all American children a good education.

Small high schools alone, he said, will not begin to solve the problem of getting all students to graduation and ready for college. Even in the foundation's work with small schools, it has been more successful with the new high schools that it started than in improving the existing schools it has converted.

Recently, bumping up against the limits of working with individual school districts, the Gates Foundation broadened the scope of its grants, adding a pool of money so states can apply for assistance.

Few of the new education donors sit back and simply review grant applications; most go out and seek partnerships in which they can play an active role.

"If you create a foundation and wait for people to come with grant applications, that's easy," said Mr. Broad, whose foundation has given more than $135 million to school districts for management and training projects. "But unless you come up with a business plan and monitor it, and see results, it's very easy to throw away millions of dollars."

Ultimately, philanthropists are accountable only to themselves. And despite the huge amounts of money involved, there is little discussion of what role private money should play in shaping basic matters of public policy.

"What many people, especially on the left, are concerned about is whether these folks are buying a piece of public policy," said Mr. Hess, who was the moderator at a conference last spring on K-12 philanthropy. "It's a reasonable question, since the political economy of this is that their work is usually evaluated only by people they hire, and the findings, which tend to be positive or mixed, are disseminated in glossies that play up the positive aspects.

"Philanthropists are used to being applauded for their work, not criticized as people with extraordinary resources taking it on themselves to shape public policy," he continued. "At the conference it was just astonishing to see all these national figures, one after another, kowtow to the philanthropists."

So how should philanthropy shape K-12 education?

"The role of philanthropy should be to try new ideas," said Mr. Colvin, of the Hechinger Institute. "School boards are not very good at innovation. They don't have a lot of extra money to try new things."

Researching Philanthropy

Council on Foundations

Children First - Central Florida

Atlas Economic Research Foundation


Another entrpreneur who is benefiting from the rush toward education philanthropy and school choice - in his case, Florida - is John Kirtley:

Fla. Debates Expanding Its Voucher Program
March 28, 2001
Jessica L. Sandham, Education Week

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Two years after Florida lawmakers approved the first statewide voucher program in the country, the debate over using tax dollars to send students to private or religious schools is raging again in the Sunshine State.

Last week, the House of Representatives voted 63-54 to pass a bill that would provide vouchers of up to $3,000 to students who attend overcrowded schools defined as those that serve at least 20 percent more students than they were designed to accommodate.

Earlier this month, House members approved another measure by a vote of 71-46 that would allow corporations to redirect up to 75 percent of their corporate income taxes to nonprofit organizations that award scholarships to low-income public school students. Students could receive up to $4,000 through those organizations to cover the cost of tuition at private schools, including those with religious affiliations, among other schooling costs. Similar measures have also been proposed in the Senate.

If approved by the Republican-majority legislature and signed by GOP Gov. Jeb Bush, either measure would amount to a significant extension of the narrowly focused program passed two years ago that offers taxpayer-financed tuition to students in schools labeled failing by the state for two out of four years. Currently, only 50 students from two Pensacola elementary schools receive vouchers through the program.

Voucher opponents say the latest round of proposals comes as no surprise.

"This is what's inside the Trojan horse," said Elliot M. Mincberg, the vice president and education policy director for People for the American Way, a Washington-based advocacy organization opposed to vouchers. "If not privatize all schooling, then subsidize private schooling. The first voucher program was just the first step, and there are folks in Florida interested in advancing it as rapidly as they can."

But supporters of both measures say that the proposed programs would provide cost-effective ways to bring school choice to a greater number of families.

"If parents can decide which schools will get the funds for their children's schooling, then schools will do better, both public and private," said Patrick J. Heffernan, the president of the advocacy group Floridians for School Choice.

Dollar-for-Dollar Credits

Observers in the state say the proposal that would allow corporations to receive tax credits for donations toward private school scholarships faces fewer hurdles than the measure tied to overcrowded schools. The House version of the former legislation was approved on March 8, and a similar proposal was approved by the Senate education committee on March 18.

Under the House version, corporations would receive a dollar-for-dollar tax credit for money donated to nonprofit organizations that award scholarships for low-income students. Organizations receiving such donations could provide private-school-tuition scholarships of up to $4,000, scholarships for home schooling of up to $1,000, and transportation scholarships of up to $500 for students who wished to transfer to different public schools. Students would qualify for the scholarships if they also qualified for the federal free or reduced-price lunch program.

"It's important to encourage partnerships between our corporate community and the education community, and this bill achieves that objective," said Rep. Joe Negron, a Republican who sponsored the measure.

John F. Kirtley, an entrepreneur who helped found the Children's Scholarship Fund of Tampa Bayan organization that would stand to benefit from the corporate donationssaid that help from the legislature can't happen soon enough. Currently, the Tampa Bay fund pays up to 75 percent of the cost of private school tuition for more than 300 students, but Mr. Kirtley says that more than 12,000 students are on the waiting list for scholarships.

"We need help in getting kids off this waiting list," Mr. Kirtley said. "Private philanthropy can only make a drop in the bucket's difference here. Eventually, money that would otherwise go to taxes has to be involved."

An Unfair Edge?

But opponents of the plan say that it would create an unfair advantage among charities, making it much easier for nonprofit organizations that grant private school scholarships to raise money than it would be for other charitable groups. They also contend that the tax credits could eventually cost the state as much as $1.2 billion each year in lost revenuean amount equivalent to 75 percent of the annual revenue the state receives through the corporate income tax.

Rep. Bob Henriquez, a Democrat who opposes the measure, said that while lawmakers would likely limit the amount of tax credits businesses could take to much less than $1.2 billion this year, the legislature would eventually have to allow for higher levels as the pool of students grew from year to year.

"It can only go up," Mr. Henriquez said. "There is an albeit indirect effect on our budget, but it's real."

The proposal to offer vouchers of up to $3,000 to students in overcrowded schools, meanwhile, has proved to be even more controversial. While the measure was approved by the House by a vote of 63-54 last Thursday, it has not yet advanced past the committee level in the Senate.

The plan's supporters say that it would help alleviate the state's growing school crowding problem while potentially saving the state money. The $3,000 cost of a private school voucher, they point out, is far less than the average $4,800 per-pupil cost of educating students in public schools.

But opponents of the plan say the state could end up helping wealthy and middle- class families send their children to private schools, as many of the most crowded schools in the state are high-performing schools in desirable neighborhoods.

"If we pass that bill, we might as well shut down the public schools," said Sen. Debbie Wasserman-Schultz, a Democrat who represents a district encompassing parts of Broward and Dade counties. "Almost my entire Senate district would be eligible for vouchers."

The school board of the 150,000-student Palm Beach County district announced official opposition to the plan last month, saying the vouchers would disproportionately help those students attending the district's top-performing schools, many of whom the board said already have economic advantages over other students.

But Mr. Heffernan of Floridians for School Choice noted that "children don't choose their parents or determine their wealth."

Besides, if a well-to-do family accepted a $3,000 voucher and left a public school, he argued, "they'd be making a donation to the state of Florida."

The Philanthropy Roundtable

Financial Freedom Society's Partners for Philanthropy Program

Free Management Library

Effective Education Grantmaking

The Chronicle of Philanthropy Ideas and Resources

The Hechinger Institute on Education and the Media

The Bill and Melinda Gates Foundation

Voucher Advocate Takes Charge at Children First America
Author: School Reform News staff
Published: The Heartland Institute 10/01/2002

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In August, Tampa businessman and leading school choice advocate John Kirtley was named president and CEO of Children First America (CFA), a school choice organization formed 10 years ago to extend nationwide the privately funded scholarship model created by business leaders J. Patrick Rooney in Indianapolis and Peter Flanigan in New York City.

The appointment of Kirtley was the first act of newly appointed CFA board chairman Rick Sharp, Virginia business leader and former Circuit City chairman.

"I am confident that John and his staff will achieve great things in the fight for educational freedom," said Sharp, pointing to Kirtley's proven record of achievement in Florida.

Kirtley is a cofounder of the Tampa-based venture capital firm FCP Investors. He helped found and develop several private scholarship efforts in Florida, and he has worked closely with CFA and other school choice advocates to boost school choice not only in Florida but around the nation. He was most recently involved in the effort to create Florida's corporate tax credit program to encourage private funding of K-12 scholarships.

CFA's aim is to win educational freedom for America's parents so they can exercise their fundamental right to choose the school they think is best for their child, be it public, private, or parochial. The organization, based in Bentonville, Arkansas, pursues a three-part strategy to achieve this:

encourage and support the formation of school choice scholarship programs funded by private citizens;
support school choice parents across the nation as they organize and work for change;>
educate and inform policy leaders at the local, state, and federal levels on the issue to make them more effective.

As a result of the organization's efforts, today there are more than 100 privately funded choice programs formed and operating in 39 states and the District of Columbia. More than a half-billion dollars has been invested in these programs over a 10-year period to serve more than 100,000 children. Many of these programs have been designed in such a way as to support high-quality research into many different aspects of educational choice.

"I have no doubt that the achievements of our organization to this point will serve as a foundation for a greater growth of parental freedom in education," said retiring CFA President Fritz Steiger, who had informed the CFA board earlier this year of his intention to return to the private sector.