Yes, Even Billionaires Face Dilemmas in Giving Money for School Reform

While big foundations face many issues in giving money to reform U.S. schools, two dilemmas in grant-giving arise again and again.

The first dilemma involves foundations’ strategies to inject new ideas into urban districts to change the status quo: They can give money to urban districts for locally-designed programs (e.g., new technologies, coaches to execute an experimental reading curriculum, professional learning communities) and then hold their collective breath that these funded programs will make meaningful changes in classrooms. Or they can arm-wrestle (or jawbone or lure–pick your metaphor) those same educators into taking gobs of cash to put innovations into practice that altered districts elsewhere even when locals are uncertain the reforms will help them (e.g., small high schools, pay-for-teacher-performance plans, charters).

The second dilemma that big spending foundations (Gates, Broad, Walton, etc.) do not like to discuss publicly because it undermines their legitimacy as agents of school reform is accountability. Large foundations spend huge sums of money to advance their business-inspired versions of successful school reforms yet escape responsibility for errors in judgment. To whom are foundations responsible for funding one strategy over another if negative consequences flow from bad judgments? Voters? Parents? School boards? Mayors?

While there are other dilemmas facing foundations, I want to focus on these two because in the past 15 years there has been a major shift in strategies that the “Billionaires’ Boys Club,” to use Diane Ravitch’s acerbic phrase, has pursued, giving them political muscle in steering urban school reform especially under the Obama administration.

The Annenberg challenge grants of $1.1 billion in the mid-1990s–the largest private gift ever made to public schools–is an instance of the first dilemma. The Annenberg Foundation gave grants to districts for locally-developed reforms (e.g., instructional improvement, professional development, arts programs) reaching 1.5 million students in 2,400 schools in 35 states. In summing up the results, an Annenberg Foundation official said: “We learned the hard way that if you seek to change the public schools, you must be prepared to deal with repeated setbacks, rapid turnover in leadership and sudden changes in direction …. We encountered problems and policy reversals in some places that took everyone by surprise.” A less charitable observer said: “The school districts and the schools gobbled up those grants like lunch, and they were ready for the next one.” Few traces in schools of these foundation-funded programs can be found in 2010.

Since the mid-1990s, wealthy entrepreneurs (John Walton of Walmart, Bill Gates of Microsoft, and Eli Broad of KB homes) see better education, especially in cities, as the solvent of the nation’s economic problems. They have challenged district educators to disrupt the status quo by installing business-oriented innovations (e.g., vouchers, charters, small high schools, date-driven instruction, pay-for-performance). You want the money, foundation leaders say, here’s what you need to do.

In exchange for funding these initiatives, these business-driven foundations expect mayors and school boards to keep entrepreneurial leaders in place (e.g., Michelle Rhee in Washington, D.C., Joel Klein in New York City), use new sources of teaching and administrative talent (e.g., Teach for America, New Leaders for New Schools, Broad interns) and report student test scores, graduation rates, college admissions, and other quantifiable outcomes. These billionaires prize incentives that will spur educators to hire the right people and do the right thing. They are less concerned with local curriculum and instruction–the process of schooling; they are far more dedicated to measures of effectiveness.

If the Annenberg Challenge trusted educators to do the right thing and flopped, the billionaires distrust veteran educators and rely upon outsiders (mayors, non-traditional educators) and incentives) to jolt calcified systems. Whether incentives and the right people will achieve the desired outcomes for student and teachers is too soon to say. Yet the dilemma of finding the best way to cope with the status quo persists.

That business-inspired foundation leaders have made mistakes, however, is obvious. And this is where the second dilemma of responsibility enters the picture, especially given the newly-developed bonds that now exist between the Obama administration and major foundations in funding favored innovations.

Consider what has happened to Bill and Melinda Gates Foundation’s over $2 billion investment in small high schools. In his first “annual letter” to the public after leaving Microsoft, Bill Gates admitted that “many of the small schools that we invested in did not improve students’ achievement in any significant way.” Even though high-performing separate small schools (e.g. Big Picture schools, High Tech High) that received Gates cash have thrived, the Foundation dumped the small high school venture and opted for plowing dollars into districts that evaluate and pay teachers who raise students’ test scores.

Oops! We made a mistake. Yet who is accountable? The fact is that the Bill and Melinda Gates Foundation and other big grant-givers can admit they erred–as had the Ford Foundation led by McGeorge Bundy in mistakenly backed community control in the late-1960s launching years of internecine conflict in New York and other big cities–and then, without a hiccup, crusade for ventures they believe are more promising. As businessmen, they were accountable to shareholders, employees, and customers. Not as heads of foundations.

These two dilemmas large foundations face–minimal responsibility for actions and changing the status quo–just won’t go away.