Published Online: February 12, 1997

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On Their Own, Design Teams Must Build on Foundation

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The coming year will be a pivotal one for the design teams that the New American Schools bankrolls.

Since 1992, the teams have received millions of dollars in support from the nonprofit corporation to construct, field-test, and promote their designs. That support has fallen to a yearly average of about $500,000 to $1 million per team since 1995. But this summer, the money flow will stop, and the design teams will be on their own--charging a fee for their services and living off the revenues.

"Two years ago, we said, 'Look, there is no more funding after mid-year 1997,'" recollects John L. Anderson, the president of the corporation. "And it's really interesting how those crises points energize and mobilize creativity and thinking."

Each team has been charging schools a fee for services since July 1995, which averages about $50,000 per school in the first year for technical assistance from a design team.

To help teams make the transition to self-sufficiency, New American Schools has provided them with consultants to help draft business plans and marketing strategies.

"That's the best thing that they've done," says Sally B. Kilgore, the director of the Modern Red Schoolhouse design. "They have brought in some very talented people to work with us."

Even so, the shift has been challenging. Although all the design teams are expanding to serve more schools, they differ widely in their capacity.

Roots and Wings, for example, is based on the widely respected Success for All program, which tries to improve the reading performance of children in high-poverty schools. That network now includes some 475 schools nationwide and has a well-developed implementation plan.

Robert E. Slavin, the project's director, says he has never sought money to disseminate the program, only for research and development. "We've always been fee-for-service," he says.

Rough Sledding

Other design teams--such as Modern Red Schoolhouse and Expeditionary Learning--did not exist prior to the creation of New American Schools. And while they are on the road to self-sufficiency, there's been some rough sledding.

"It's been, in some ways, exhilarating because there's been a lot new to learn," says Gregory Farrell, the president of Expeditionary Learning and the vice president of Outward Bound USA Inc., its parent organization. "It's not been entirely easy, but I think it makes sense to us as a way to go and to last."

The group's business plan projects deficits through 2000. But its parent is raising some $2 million to cover the accumulated deficits and provide a modest cash flow.

New American Schools is searching for additional jurisdictions where it can create new markets for the designs.

But design teams have had trouble projecting what the demand will be for their services in unchartered territory. Many also have grown so rapidly that they've been forced to hire people without previous experience in implementing the designs.

And that has required them to provide extensive professional development for their own staff members.

"You have to make a tremendous investment in people," says Kilgore. "If we can't grow our own trainers, we're going to be in trouble."

One response has been for the teams to create regional centers that can serve large groups of schools in one location. Audrey Cohen College, for instance, plans to use a regional scale-up strategy in the Southeast.

Design teams also are drawing upon teachers and administrators from some of their original sites to work with new schools. And they are trying to be more hard-nosed about the services and materials they provide.

"In many instances," says Bruce Goldberg, the director of the Co-NECT design, "we've spent a great deal more time and expense on what we did than we've ever charged the schools."

Now, they must figure out how to price those services so schools can still afford them without sacrificing quality. And that is forcing both sides to clarify their expectations.

Changing the Ballgame

Sue Bodilly, a social scientist at the RAND Corp., which is evaluating New American Schools, says overall the transition to a fee-for-service arrangement has been a healthy one.

"If a school is going to pay you to provide assistance, they'd better be able to see what they're getting," she explains.

And that has pushed the design teams to explain their blueprints more clearly, to write concrete materials, and to hire people who are better versed in classroom practices.

"It pushed them into the competitive market," she contends, "and that changed the ballgame."

Marc S. Tucker, the president of the National Center on Education and the Economy, the parent group for the National Alliance design team, maintains that it also has improved the relationship with individual sites.

"When the people we are working with have to pay for the services they get from us, they take it much more seriously," he asserts.

"They pay attention to the quality. They pay attention to its relevance. It becomes a much more equal partnership, and they are much more likely to use what we have to offer."

Still, Anderson admits that most design teams will require some working capital in order to make a go of it.

In particular, they have to invest upfront in the human capital needed to serve more schools. And they must continue to fund research and development to enhance their designs.

In the long run, he says, the continued survival of the design teams will be one of New American Schools' greatest legacies.

"Will all seven make it?" he asks. "They all have a real good chance of making it."

--LYNN OLSON

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