K-12 philanthropy is changing

[This article by Brandon Dutcher appeared November 26, 2004 in The Oklahoman.]

The Oklahoma City Public Schools Foundation recently celebrated its 20th birthday, and The Oklahoman rightly lauded the organization for its "two decades of changing lives."

But even as the foundation continues its good work, it’s worth noting that there are important changes afoot in the world of education philanthropy. Frederick M. Hess, a scholar at the venerable American Enterprise Institute, describes them in "Re-tooling K-12 Giving," a recent article in Philanthropy magazine.

The old model of education giving "focused on pouring resources into the maw of enormous public systems," Hess writes. Walter Annenberg’s 1993 challenge grant of $500 million to public schools is emblematic of this approach. But 10 years later, Annenberg’s "ambitious effort had produced dismal results, casting a harsh light on conventional philanthropic efforts to improve schooling."

"The Annenberg experience put an exclamation mark on longstanding frustrations regarding the results of philanthropic giving to public schooling," he explains, "and its disappointing conclusion heralded the entry of a new generation of funders eager to try another tack." Exhibits A and B of this new generation: the Bill and Melinda Gates Foundation and the Walton Family Foundation – the nation's two biggest education givers in 2002.

The Gates Foundation states explicitly that "certain 'mission critical' policy conditions must be in place for large-scale success: standards and assessments, accountability, need-based funding, school choice, college access." The Walton Family Foundation puts considerable emphasis on school choice. One grantee, the Children's Scholarship Fund (co-founded by John Walton), gives tuition assistance to needy families who want to send their children to private schools.

When Mr. Walton spoke to OCPA in 2002, he said the foundation continues to support public education, but that parental choice is necessary to spur improvement. "In our family business, everyone in operations will tell you that our toughest stores to run are those with the least competition," he said. "I think we just need to create the kind of environment in which the customer is empowered."

In short, Hess writes, "the philanthropic community is in the midst of a slow, difficult evolution from the earnest efforts epitomized by the Annenberg Challenge to a savvier, more politically aware approach."

Why? Many philanthropists are dissatisfied with their return on investment. Inflation-adjusted per-pupil spending continues to rise in the public schools (by a multiple of 3.22 in Oklahoma over the last 40 years), yet student achievement remains flat at unacceptably low levels. Oklahoma's reported public school spending is $6,436 per pupil – though Hess estimates the real number is 20 to 30 percent higher than that. ("The accounting guidelines in schools would bring smiles to the former executives of Enron or Tyco," he says.).

Donors look around and see that private schools are getting results at a fraction of the cost.

Whether one is investing in biotech startups, aerospace firms, or the education of children, there’s no reason to think a near-monopoly, heavily unionized, government-owned-and-run entity is going to be the strongest performer. Leveraged-buyout king Ted Forstmann, co-founder (with Walton) of the Children's Scholarship Fund, observed that giving money to public schools is "like giving money to Brezhnev – it’s the wrong system."

Here’s a sobering fact: Oklahoma's public school system is one which the majority of people would exit if they could. Earlier this year, Cole Hargrave Snodgrass & Associates asked Oklahoma parents: "If you had a school-age child and were given a voucher or a tax credit that would cover tuition to any of the following, which would you personally choose for your child?" Fifty-eight percent said they would choose a private school.

Many of those children are stuck in bad schools, and their childhood won't wait for the school improvements the old model of philanthropy seeks to foster. Here's hoping donors will throw more of these children a life preserver right now.