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Published in Print: August 9, 2006, as Money, Momentum, and the Gates Foundation

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Money, Momentum, and the Gates Foundation

What Will Warren Buffett’s Gift Mean for U.S. Schools?

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News stories about Warren E. Buffett’s huge donation to the Bill & Melinda Gates Foundation, announced in June, tended to cite the foundation’s successes in international health. They said little about education. ("Gates Foundation’s New Billions Viewed as Boon, Challenge for Education Giving," July 12, 2006.) Does this mean that the foundation has made good investments in health and bad ones in education? Not necessarily, but it does reflect the differences in the problems Gates has addressed via its health and education giving, and the differences in its strategies in each area.

In health, the foundation has focused on delivering established remedies to people who previously could not get them. Thanks to the demand for innovative pharmaceuticals and medical procedures that exists in Europe and the United States, remedies are available for many of the illnesses that beset people in poorer areas of the world. Foundation grants can purchase medicines that poor people can’t afford, and create simple delivery systems in areas that have too few doctors, nurses, and clinics. In some localities, the foundation is bypassing corrupt government delivery systems, but in most, it is creating new mechanisms to do one or two things simply and well.

As in its health investments, Gates’ work in education is focused on creating new opportunities for the poor and disadvantaged. But in education, the foundation is investing in the United States, not abroad. Here, a delivery system made up of state education departments and local school districts already exists. In contrast to health care, there is no competitive market to create demand for new methods and technologies. The delivery system is frozen by politics, and has all but a small proportion of its money committed to employees and mandated services. Insider groups tolerate small-scale experimentation but resist wide adoption of new ways of doing things, because these can cause job insecurity and upset deals that have been painfully hammered out among organized groups.

Thus, in education, new ideas seldom get traction because the delivery system makes sure money and people don’t flow to them. Unlike in health care, where technologies exist to cure many diseases and the foundation can invest in delivery, dramatically superior methods don’t exist in education, and the delivery system prevents the kind of experimentation that can lead to continuous improvement of practice.

Innovations strong enough to make a difference in education aren’t just lying around waiting to be picked up, and won’t emerge by themselves.

The Gates Foundation understands this difference. It has supported studies open to new ways of funding and organizing public education, studies that encourage new ideas instead of being hostile to them. The center I lead is doing many of these studies. Gates also has funded successful charter school models and providers, as well as practical, nonideological ways of encouraging school choice.

But the foundation has also thwarted itself in two ways. First, it has awarded tens of millions of dollars to school districts, the greatest sources of resistance to widespread change, and it has done so through organizations with long-standing relationships with these districts. Second, it has not sponsored the kind of extensive and in-depth research needed to produce genuine breakthroughs in areas such as instructional methods, human-resource development, and the organizational dynamics of teaching and learning. The second mistake compounds the first, because innovations strong enough to make a difference in education aren’t just lying around waiting to be picked up (as they are in international health) and won’t emerge by themselves.

In searching for more effective methods, the foundation has favored the logic of venture capital—that market incentives are strong enough to spur innovation but that inventors need money to commercialize their products—over the logic of research and development, which is called for when market incentives are too weak to encourage new invention.

The Gates Foundation’s venture-capital approach hasn’t worked very well in education because the solutions really aren’t there. Though some existing school designs and instructional methods are able to move the needle slightly, even the best of them (like the KIPP schools and highly structured curricula for early reading) improve results for disadvantaged students but leave them far below the national average. Even if all of Gates’ venture-capital investments were adopted and rigorously implemented, the foundation would still be far short of its goal of equalizing opportunity for all children.


What can the foundation do? It would be a tragedy for America’s poor children if this new and larger Gates Foundation decided to place all its bets on international health care in the belief that improving U.S. schools is too hard.

A better option would be to acknowledge the primitive state of education methods and the paucity of good ideas about how to educate disadvantaged students effectively, and create grant programs to elicit and develop totally new ideas.

The education side of the foundation has shown that it can make good use of data and adjust its giving in light of experience. Results of a formal evaluation by the American Institutes for Research, for example, led to significant changes in Gates’ flagship high school reform program.

Given its base in Microsoft money, the foundation has been reluctant to press for the invention and trial of new applications of computer technology. But that sort of initiative is needed now. Grant programs could stimulate development of new online resources and, more important, new ways to mix teacher work with online information, extend students’ learning days beyond the hours when teachers are present, and use students’ and teachers’ in-school time more productively.

It would be a tragedy for America’s poor children if this new and larger Gates Foundation decided to place all its bets on international health care in the belief that improving U.S. schools is too hard.

Online methods could give poor and minority children, who now get the least-capable teachers, access to instructors who are true masters of their subjects. The possibilities would be even greater if new technologies were coupled with innovations in education finance. Such a marriage would permit schools to make trade-offs between teacher salaries and teacher-enhancing technologies, while providing poor parents with access to the specialized lessons and hands-on instruction that currently give the children of the wealthy a special edge.

New experiments with the use of time and money, including integrating social-services funds into school budgets so that disadvantaged children can go to school longer, and so that schools in high-poverty areas can become parish-like, general-support institutions, also are necessary. Government can’t lead the way on such ideas because all of its money is in separate institutional silos. But experiments set up by a vast foundation could provide real evidence of what it takes to bring poor and minority children all the way up to normal performance standards.

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Figuring out how to do such things would put the Gates Foundation into the research-and-development business— soliciting new ideas, funding the most promising ones, and taking risks with a few truly revolutionary proposals. When ideas under development show promise, the time is right for venture-capital investments. When school districts become desperate for options under the performance pressure imposed by the No Child Left Behind Act, that is the time for partnerships with school boards and superintendents.

New investments in research and development could create a situation in K-12 education that more closely resembles international health. The Gates Foundation has already shown that it can sponsor R&D, in its health program, which recognized that demand for malaria remedies in the United States and European markets was too weak to stimulate innovation.

The R&D approach can work in education just as it has done in other fields. The education of surgeons, pilots, and lawyers has already been transformed by the results of trial, refinement, and retrial of new methods. Only an inflexible delivery system has prevented similar cycles of innovation in K-12 education.


Research-and-development strategies are slow-acting. Even in purely technical fields like defense technology and cancer research, it can take years for ideas to be refined enough for field-testing, and even longer before they affect everyday practice. But in education, as in any field where the problems are clear but solutions are not, there is no good alternative to research and development.

In education, as in any field where the problems are clear but solutions are not, there is no good alternative to research and development.

The Gates Foundation could spend the next decade betting on superintendents and urging schools to innovate despite the regulatory and contractual pressures that hold them tightly in place. Or, it could spend the same amount of time and money creating the building blocks for much more effective methods of teaching and learning.

No other foundation has had the money and the long horizon that such a strategy requires. And the U.S. Department of Education has utterly failed to make the needed investments, due to its many politically driven shifts in emphasis.

The Bill & Melinda Gates Foundation can make as great a difference in domestic education as it is making in international health care. It already has made some very astute moves by shaking up the education delivery system. Now, as it doubles its annual giving thanks to Warren Buffett’s generosity, there is a once-in-a-lifetime opportunity for the foundation to reassess where it is and where it’s going in education.

All of the evidence before us argues that the pursuit of quick school gains will inevitably lead to disappointment—not because people don’t want them, but because we don’t know how to attain them. An R&D strategy, although slow, is a much more sensible approach, because it is the only strategy that makes sense when we are faced with problems that nobody has solved before.

Vol. 25, Issue 44, Pages 34,44

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