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Promise of Private-Sector Initiative on Gifted Dims Amid Woes

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Washington--Four years ago, on the eve of President Reagan's first victory, a small group of business leaders and lobbyists here incorporated a nonprofit organization that their discussions convinced them would fill an important gap in public education.

The National Business Consortium for the Gifted and Talented, as the group called itself, proposed to carry out an ambitious scheme incorporating one of the new President's major themes--the enlistment of the national business community in "partnerships" with those championing important social causes, in this case the advancement of programs for gifted schoolchildren. The consortium group, laying out a plan to set up an elaborate 50-state system of business leaders and state and local education officials working to raise money and establish programs for such students, garnered endorsements from 70 of the country's major corporations, as well as support from the White House and the Congress.

'Kick-off' Reception

Vice-President George Bush hosted a "kick-off" reception for the organization in May 1983, and President Reagan issued a certificate this past June commending the group at a White House invitational symposium--with the title "Programs That Work"--backed by its office of private-sector initiatives. The certificate was presented by Secretary of Education Terrel H. Bell. Almost every member of the Congress has endorsed the organization, from House Speaker Thomas P. O'Neill on down.

The federal accolades bespoke a bright promise for an organization that many saw as taking up the work of the U.S. Education Department's office of gifted and talented students, which had been abolished after the Congress's 1981 vote to include the programs in the Chapter 2 block grants to states.

In fact, the program is now deeply in debt, may face at least one lawsuit from an angry creditor, has experienced considerable turnover on its board of directors, and has disappointed a number of the education officials and volunteer business leaders whose support it needs.

Moreover, despite elaborate multi-colored brochures and complicated flowcharts with goals and timetables, most of the consortium's programs remain on the drawing board as its fifth year begins.

And the financial centerpiece of the group's fundraising effort came not from the private sector, but from the U.S. Department of Labor.

But an examination of organizational records and interviews last week with those associated with the $249,900 grant suggest that the funds did not produce proposed goals and may not have been disbursed as originally planned.

Central to the story of the organization are two Washington professional people: a business consultant named Jacqueline Meers, who is the executive director of the consortium, and Louis Kramp, the owner of a lobbying firm who was for many years an organizer of the National Prayer Breakfast, a group that planned breakfast fetes for state and federal lawmakers.

Ms. Meers was employed by Mr. Kramp's firm, Louis C. Kramp and Associates, at the time the consortium for the gifted and talented was established. Neither Mr. Kramp or Ms. Meers had previously worked in education, but they and others say they brought to the consortium wide business and political contacts in the national capital.

Consortium's Management

Mr. Kramp, a former lobbyist for such corporate clients as Holiday Inn, is credited with first proposing the consortium, and his firm has been managing the consortium's activities since its inception. Fiscal records show that Mr. Kramp has billed the consortium for more than $700,000 in management fees since its beginning. During that period, the consortium has raised a total of about $740,000, including the Labor Department grant.

Ms. Meers was an employee of Louis C. Kramp and Associates when the consortium was founded in 1980 and became its executive director that year.

According to Mr. Kramp and his accountant John Erskine, however, Ms. Meers also continued as an employee of Louis C. Kramp and Associates until early this year. Apparently, she was on the Kramp payroll when, as executive director of the consortium, she submitted the final proposal to the Labor Department.

The grant of $249,900 was received by the consortium in August 1983. And the money was paid to Louis C. Kramp and Associates under contract to carry out the provisions of the grant.

'Out of the Ordinary'

According to Labor Department officials, the means by which the grant was obtained and the fact that it was funded at all were unorthodox. "This one was out of the ordinary," said one official.

The grant was awarded under the department's "pilots and demonstrations" program, funded at $21 million in 1983. The official said most of the pilot grants are directed "at finding ways of training the disadvantaged--through such efforts as remedial education and English-language training for youth and adults."

Department officials said the proposal was submitted directly to the Secretary of Labor and appeared to have White House backing. "The lady [Jacqueline Meers] appeared to have a substantial amount of clout," said one.

Program Implementation

The grant application said the consortium would use the funds to: establish and oversee 7 regional offices and 4 model state demonstration programs ($81,900) and provide initial three-month funding for 7 regional offices ($168,000). About $58,000 was to support a national office in the Kramp firm, according to the proposal. A total of $65,100 was allocated to communications, materials, and supplies for the consortium.

Kramp and Associates contracted in August 1983 with a national financial-advisement firm in Illinois, American City Bureau/Beaver Associated; Barry Dawson and Associates, a Denver-based career-counseling company; and Nason/Lundberg, a consulting firm with

headquarters in Los Angeles.

Funds Not Received

But according to an official of the Illinois company, it has not received full reimbursement for the $90,000 in services that were provided for under the terms of the contract.

According to James Biggins, president of the firm, "We had a contract with Kramp to help them organize. ... The job was to implement their master plan through the 50 states. We started out with 7 offices, which were tailored back to 4--Atlanta, Washington, N.Y., and Chicago. The plan was to expand out and include people to work on projects."

"We were paid for services per contract," he said, but the 73-year-old national consulting firm, which provides advice on fundraising for nonprofit organizations, hospitals, and ymca's, received only "partial receipts" from the Kramp offices.

"It became obvious they weren't going to pay us. They paid with checks that didn't clear. We worked with them from mid-August through mid-December," Mr. Biggins said.

Barry Dawson said last week that he did not receive "a penny of the $18,000" he was entitled to under the terms of the grant proposal.

Review Finds Gaps

A Labor Department program officer sent to review the program in early 1984 confirmed that the consortium had not set up bureaus outside of its Washington headquarters, contrary to what the grant had proposed, Labor Department officials said. The department asked for an audit at the end of the grant period.

Mr. Erskine said last week that the consortium had filed a budget modification with the Labor Department after it encountered difficulties in setting up the regional offices.

He said the original request for $184,800 for the regional offices and the national office was increased to $243,900 and that funds for materials and communications were reduced to $6,000. The modification was approved by Labor Department officials Nov. 17.

In a final report to the Labor Department last February, the consortium provided a narrative description and two tables showing what results were planned from each state.

State Fundraising Anticipated

Under the program, state committees were to raise private funds, a charge of $350 was to be levied on each school district for participation in the national program, and state education officials were also to make a contribution. A proportion of the total amount thus raised was to be sent to the Washington office, and anything left over was to go into the state committee's own program.

The report provided no data on how much of that fundraising had been accomplished and included no financial information on the actual expenditure of grant funds.

Mr. Erskine said, however, that a separate financial accounting, showing that the grant had been spent in accordance with the modified budget, was submitted to the Labor Department sometime after the final report and was accepted by the department.

Difficulties Described

The final report's narrative stated: "The seven regional directors which were retained during the first quarter of the grant period appeared, at first, to have the right background for the job. They had been experienced in managing volunteer projects primarily in fundraising for hospitals and other similar endeavors.

"Unfortunately, it became quickly evident that these individuals were not able to move the consortium's program forward. The state program requires an understanding of political, educational, and business procedures and power balances. None of the regional directors had a background which recommended them in all areas.

"Thus, their lack of ability to implement the program began to show in the limited amount of progress that was being made in the field. Providing the control here in Washington for the field officers was another key factor in the decision to terminate the contract with the regional support system, and to set about finding those uniquely qualified individuals who could successfully serve in the regional capacity."

Grant Extension Sought

Labor Department officials said that in recent months, Ms. Meers had urged the department to extend the one-year grant on the grounds that Defense Department officials would supply funding if the money was funneled through the Labor Department. The officials confirmed that Ms. Meers contacted several department offices about the plan, including the office of the Secretary of Labor, Raymond L. Donovan, but the plan was turned down.

Mr. Kramp denied last week that such an approach for further funding was made. He also said there was anything unusual about the original grant or Mr. Donovan's participation and would not comment on the allocation of funds due to potential litigation.

Secretary Donovan, Mr. Kramp said, was "interested" in the program after hearing about it at a reception at the home of Representative Guy Vander Jagt, Republican of Michigan, a friend of Mr. Kramp's.

"It was a healthy deal," Mr. Kramp said.

Consortium's Origins

Interviews last week failed to clarify exactly how the National Business Consortium for the Gifted and Talented began.

Jacqueline Meers said it was started by a group of businessmen who were interested in helping the gifted and talented, including Scott McBride, president of Marketing General in Washington, D.C., and Frank Ikard, an attorney with a well-known Washington law firm and former president of the American Petroleum Institute.

Ms. Meers said Louis Kramp was hired as its management firm. As an employee of Kramp Associates, she was asked to write the "intitial white paper." That paper was submitted to the William Donner Foundation in New York and resulted in a $22,000 grant from the foundation in May 1981.

However, Mr. McBride said the organization was the "brainchild of Louis Kramp," a personal friend.

"Mr. Kramp got some people together and we felt it was an idea whose time had come," he said.

Mr. McBride's name appears on the papers of incorporation for the consortium that were signed in 1980, but Mr. McBride said last week that he could not recall when the organization started, how long he served as president, or when he resigned to pursue other commitments.

The consortium is now Mr. Kramp's only client, and besides Ms. Meers, it is run by Mr. Kramp's eight employees. Essentially, Louis C. Kramp and Associates is the staff of the consortium.

Independent Audit

According to the independent audit by the Washington-based accounting firm of Deloitte, Haskins, and Sells, most of the company's debt of $465,793 in 1983 was owed to Louis C. Kramp and Associates.

The auditor's report states that "fees and expenses to the management firm, Louis C. Kramp and Associates, were approximately $648,000 in 1983. ..." Of that amount, $497,911 was allocated to "professional services," most of which, according to Mr. Erskine, went toward staffing, operational costs, rent, and the salaries of Mr. Kramp and Ms. Meers.

Mr. Kramp earns a salary of about $50,000 per year and Ms. Meers earns about $60,000, Mr. Erskine said, but neither collect the full amount because of the financial difficulties. Both have taken second mortages on their homes, they said last week, to help finance the consortium.

Mr. Kramp said he could not recall the terms or amount of any salary he had been paid and referred that question to his accountant.

Arthur E. Dewey, deputy secretary of the bureau of refugee programs in the U.S. State Deparment and a member of the board of directors, said the board would be "morally, but not legally" liable to pay Mr. Kramp the $399,000 it owed him as of the end of fiscal 1983.

"His agreement with the board was that [Mr. Kramp] would be paid as the money came in," Mr. Dewey said.

No Paychecks

J.D. Coleman was employed by the consortium beginning in September of 1983. The former director of marketing and communications of the Atlanta Chamber of Commerce and now a marketing and public-relations consultant in Atlanta, Mr. Coleman said he returned to Atlanta in January of 1984 because, in the financial problems the consortium faced, he was not receiving his paychecks.

"My pay was short beginning a month after I came to Washington. But I believed in what they were doing and liked what I was doing. I believed them until it finally came apparent that the money was not forthcoming. I decided to cut my losses and return to Atlanta."

Goals Not Met

The organization's mounting financial problems, coupled with the lack of progress, have overshadowed the original lofty goals, former participants say.

The original director, Rear Admiral E.R. Zumwalt, former chief of Naval Operations, is among the disillusioned.

While the Admiral championed the program in June 1982, saying it would "revolutionize the education of our gifted and talented children in America" and create "a collective voice that will ... change the direction of education in America," he said in an interview last week that he left the organization because he "became dissatisfied by lack of any evidence of progress in the programs."

"I was too busy to go into any detailed investigation to why" the programs were not getting anywhere, Admiral Zumwalt said. But he said he "did not see any activity that was successful in getting towards the objectives" that the organization had established, which "seemed to be worthy" and which he had so highly praised.

Admiral Zumwalt said he did not know much about the people who were running the program and that his initial involvement in the organization had been influenced by his long association with Frank Ikard.

Mr. Ikard was president of the consortium's board from 1980 to 1982, and resigned because it was too time-consuming, he said last week.

He said that while he was associated with the consortium, much of its work consisted of acquainting the Congress with the goals of the program. "There were mailings and statistical information."

In addition, Mr. Ikard said, "the effort was to communicate at the state level with the people who had the responsibility for education of this kind, a cross-fertilization between state and federal and business."

Four-Part Program

According to an October 1983 budget presentation, the board planned to implement four programs between 1983 and 1985. These included:

Fifty state consortium programs.

Four "Model State Programs."

A "National Constituency Development Program."

Development of a business-sponsored national data center for the gifted and talented.

According to Ms. Meers, these programs were supposed to cost about $3 million, underwritten by money raised from the state consortia, which were to contribute an average of about $30,000 per state. The other $1.5 million was to be raised from corporations and individual contributions.

In addition, after the state programs were in place, an October 1983 budget presentation stated, "the National Consoritum anticipates that some 40,000 businesses will be stimulated to contribute an estimated $20 million in new resources directly to the gifted and talented education within local school districts,"


'Malaise of Gifted'

So far, none of these goals has been accomplished. In the words of one former consortium employee who asked not to be identified: "Unfortunately, what I saw Louis Kramp do is to dangle the malaise of the gifted child like a carrot before the business and education community."

According to records provided by Mr. Erskine, the consortium raised toward its $3-million goal a total of $744,050: $40,025 in 1981, $15,250 in 1982, $431,775 in 1983 and $155,000 for the first six months of 1984.

Nineteen states have selected state chairmen and one model program is in the process of being set up, in the District of Columbia, according to Ms. Meers.

Into 'Dead File'

But according to the special assistant to the superintendent of the District of Columbia public schools, Robert Carlson, no model program has been set up. A proposal for the model program that he submitted to the consortium last year has yet to be returned to him. "Apparently, my secretary moved it into the dead file," he said. "There hasn't been much communication. We are still very interested and anxious to move the project ahead, whenever the consortium moves ahead."


'Strong-Arm Tactics'

Phillip Runkel, state superintendent of public instruction in Michigan, said his state decided to "at least explore" the consortium's efforts, but that it backed away after some abrasive dealings with the consortium.

"We felt they had some really strong-arm tactics and just didn't want to be involved," he said. "They were continually trying to approach us about involvement, we had some serious problems about sending money to Washington, when we had some pressing issues in this state."

He said he recommended that the governor not continue participation after visiting with Ms. Meers in Washington.

Floundering State Programs

Other state programs that were established have failed for lack of funds or leadership.

Calvin Frazier, Colorado commissioner of education, said he had four or five meetings with representatives from either the national office or the state office.

"When the consortium was first formed, they were going to survey the states and find out what the needs were and go to the business sector to see if some of those needs could be filled," he said. "They were unable to raise the money to keep their people in Colorado on, so they left to do other things."

"A number of [chief state school officers] felt they had been bypassed, that people were trying to build a program apart from the state departments," he said. "I got a very mixed response. Not very many of the chiefs were very positive."

Mr. Frazier said that to his knowledge, nobody is working with the consortium in Colorado at the present time.

Mr. Frazier said he saw Ms. Meers as someone "who wanted this project to go and was struggling with a key that she couldn't find. I tried to help her, and she seemed responsive to suggestions. It worried me that we were into this two years of struggling along; where was the progress?"

Funding Strategy Rejected

John D. Gray, the former business-sector chairman of the Oregon state consortium and vice chairman of Omark Industries in Portland, Ore., said Gov. Victor G. Atiyeh asked him two years ago to be the volunteer leader for the program. He said he was active for about six months, but after visiting Washington to meet Ms. Meers "felt that for our state the monies would be better used in the state, that the idea of sending money back to Washington for public-relations activities was not for us."

He recommended to the Governor that Oregon "discontinue its participation."

Champions Remain

Despite its troubled start-up record and current deficit, some champions of the consortium are convinced that, in time, it will turn itself around.

Mr. Dewey, the state department official and a founding member of the consortium's board of directors, said last week that if the consortium scaled back and did not try to "complete expansion until the funds are in place," the program would succeed. "The idea is still sound, and I don't think it should be allowed to die because there are setbacks in setting up the management structure," he asserted.

Dorothy Sisk, chairman of a 20-member "academic advisory council" set up by Ms. Meers last year, said that at last week's annual conference of the National Association for Gifted Children, members of the council met and "reaffirmed their basic belief" in the concept of business partnerships and in the concept of the national consortium. "We would like to see it succeed," said Ms. Sisk, who is a former director of the federal office for the gifted and talented.

'Laudable' Goals

William Livingston of Livingston Associates, a San Francisco consulting firm, was hired to head the regional effort on the West Coast on June 1.

"I am working to facilitate the establishment of state chairmen in six states," he said. Mr. Livingston said he was aware that the organization was in debt when he agreed to work with it.

"I went in understanding the consortium had considerable financial problems, and understood the possibility I might not get paid. I significantly reduced my normal consulting fee, because I believed in what they are doing."

"There has been a lot of bad press and bruised egos and bad-mouthing," Mr. Livingston said. "The goals of the consortium are very honorable, very laudable. They made some decisions I would not have made, but hindsight is 20/20."

According to James Kemper, chairman of the board of Kemper Group, the insurance and financial-service corporations, a consortium of business people in Illinois working through the National Business Consortium is now launching a campaign to put the state in line with the goals of the consortium.

"Based on my own experience, raising money for various causes, I don't think fundraising was very well organized at beginning," he said. There was "not enough planning given to fundraising." But now the organization, he added, is going to proceed in a "more scientific way.''

"I'm impressed with Mr. Kramp, impressed with the people who are associated with him. The board of directors is satisifed the consortium is on right track," Mr. Kemper said.

Looking Ahead

The consortium's leaders are trying now to look toward the future. They have signed up the noted San Francisco trial lawyer Melvin Belli to head a $1.5-million fundraising effort, and the John D. and Catherine T. MacArthur Foundation has provided a $25,000 grant.

"I see that all of this will work out for the best," Ms. Meers said. "Any criticism brought to bear will only awaken businessmen and educators to the needs and opportunities for the gifted and talented."

Mr. Kramp said last week that the organization would fullfill its high promise when "we [are] able to pay our bills for telephone and printing and assessment staff better than we do."

Peggy Caldwell also contributed to this report.

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