Published Online: September 9, 2009
Published in Print: September 16, 2009, as Potholes Ahead on Innovation Fund
Updated: April 4, 2012

Potholes Ahead on Innovation Fund

Evaluation, Fairness Seen as Crucial For $650 Million Pot of Federal Stimulus Aid

Federal education officials will face a variety of obstacles in running a $650 million innovation fund, from an expected flood of applications and concern about favoritism in picking winners, to skepticism about the government’s ability to drive innovative change in education.

Meanwhile, the U.S. Department of Education—which last month offered an early glimpse of its intentions for the competitive grant program under the economic-stimulus package—is already looking for ways to expand and sustain the short-term innovation fund’s reach.

For one, the Obama administration is seeking another $100 million in fiscal 2010 for the program, formally called the Investing in Innovation (i3) Fund, despite what appears to be congressional reluctance to provide more money.

Also, Education Department officials apparently have been reaching out to private philanthropies in hopes of increasing the size and scope of the agency’s innovation agenda. One idea believed to be on the table is to get private philanthropies to pool money in a separate fund that would complement the $650 million pot.

Funding Experimentation

The U.S. Department of Education has offered a few more details about how it will award $650 million in investing in innovation, or “i3 Fund” grants later this year.

Who’s eligible: School districts, consortia of schools, and certain nonprofits.

Goals for grants: Expand proven education models, scale up capacity of high-impact programs and organizations, validate promising evidence-supported models, create new education reform breakthroughs.

Size of grants: Up to $5 million for “pure innovation” grants to try out interesting ideas; up to $30 million for “strategic investment” grants for programs that need more research or capacity to scale up; up to $50 million for “grow what works” grants for programs that have proven themselves and are ready to expand.

Timeline: Two rounds of grants will be awarded, with application deadlines later this year and in the spring. Grant amounts will be finalized as part of the application process, and funds must be awarded by the Education department by next September. the department has said it may consolidate the grants into one round.

While the fund pales in comparison with the overall $100 billion in federal education aid under the stimulus program, officials view it as a potentially powerful lever for sparking change.

In an Aug. 20 speech discussing the innovation fund, U.S. Secretary of Education Arne Duncan said he wanted his agency to move from being a “compliance machine” to become an “engine of innovation.”

But some analysts suggest that may be a tall order.

“God bless them for trying again,” said Chester E. Finn Jr., the president of the Thomas B. Fordham Institute and a former assistant education secretary under President Ronald Reagan. “The federal government does not have a particularly honorable track record of investing in successful innovation [in education], and at distinguishing between successful and unsuccessful [approaches].”

He cites as an example the federal Comprehensive School Reform Demonstration program, which ended in 2006. “Essentially, everything that could fog a mirror qualified for federal funding,” Mr. Finn contends.

And the administration’s hopes for extending the fund’s life face challenges. A House budget bill passed in late July includes only $3 million in additional money for the fund; a companion measure passed days later by a Senate panel contains no new money at all for it.

‘Unleash Your Creativity’

The innovation fund is part of an unrivaled, $5 billion pot of one-time discretionary dollars at the Education Department’s disposal for competitive grants under the American Recovery and Reinvestment Act, as the stimulus program is formally called. The largest chunk, $4.35 billion states are vying to claim, is reserved for the Race to the Top fund.

The innovation fund, in contrast, is aimed at school districts and charter schools, as well as partnerships between nonprofit groups and districts or consortia of schools. The Education Department is expected to formally unveil details on how the program will work in coming weeks, but last month offered some early clues to its thinking.

The grants will fall into three categories, Secretary Duncan said at the Aug. 20 symposium: “pure innovation” awards of up to about $5 million for “promising ideas”; grants of up to about $30 million for programs that “need to build a research base or organizational capacity to succeed at a larger scale”; and grants as high as $50 million to expand “proven programs.”

“We want to provide powerful incentives to districts and nonprofits to develop a culture of innovation and continuous improvement,” he said. “[W]e are looking to you—the districts and nonprofits—to unleash your creativity and build the next generation of education reform.”

Secretary Duncan suggested the projects could tackle a wide range of challenges, from accelerating the learning of adolescents who have fallen behind and helping students with disabilities complete “college-ready work” to turning around low-performing schools and recruiting effective teachers.

The department is anticipating thousands of applicants, and expects to begin issuing i3 grants in early 2010.

Bruno V. Manno, a senior associate at the Baltimore-based Annie E. Casey Foundation and a former assistant education secretary under President George H.W. Bush, said he’s encouraged by the early signals from the department on the i3 fund. It will be critical, he said, for the agency to set clear definitions of success, while acknowledging up front that not every project will provide the hoped-for results.

“Just because something failed doesn’t mean it wasn’t worth trying,” Mr. Manno said.

Also important, observers say, is careful evaluation of the projects undertaken.

“It’s very difficult because school people always say, ‘They had an unusual situation, and it won’t work in our school,’ ” said Jack Jennings, the president of the Washington-based Center on Education Policy and a former education aide to House Democrats. “There has to be some [mechanism] to strongly evaluate these projects and see what does work and what can be replicated on a wide scope.”

Department officials say evaluation will be a key design principle of the i3 program. The stimulus law says one purpose of the grants is to “identify and document best practices that can be shared, and taken to scale based on demonstrated success.”

Robin J. Lake, the associate director of the Center for Reinventing Public Education at the University of Washington in Bothell, cautions that replication of successful approaches has proven especially difficult.

“It may work under some conditions but not others,” she said.

At the same time, the department enters perilous territory in planning to identify “proven programs,” she said. Under President George W. Bush, the department sparked a firestorm by appearing to favor certain approaches to instruction in the federal Reading First program.

“There was a lot of controversy over Reading First ... so getting past that and defining some objective criteria and sticking to it will be a challenge,” Ms. Lake said.

‘Playing Favorites’?

Officials also will have to take care to avoid the perception that certain organizations are getting preferential treatment. In Secretary Duncan’s remarks last month on the i3 fund, he singled out several organizations for praise, including the New York City-based Teach For America and Green Dot Public Schools, a Los Angeles-based charter school network.

“When they’re about to give out $650 million, and the criteria have not yet been established, it absolutely starts to create some real concerns about picking winners and playing favorites,” said Frederick M. Hess, the director of education policy studies at the American Enterprise Institute, a Washington think tank. “Frankly, though, I’m more concerned about people who are applying either feeling some kind of obligation to the administration, or being perceived as ‘in the tank.’ ”

Department officials insist they will run a fair and transparent grant competition.

In any case, the fund is drawing strong interest from potential applicants.

Teach For America expects to put together an i3 application, said Kerci Marcello Stroud, a TFA spokeswoman, though she said the group is not expecting any special treatment.

Jeff Simering, the legislative director for the Council of the Great City Schools, a Washington-based coalition of 67 large urban districts, said he’s hearing considerable interest from his members.

“A lot of them are seriously considering applying,” he said. “They’re waiting to see what the details are going to be.”

There’s also keen interest from the charter schools sector.

Christopher J. Barbic, the founder and head of YES Prep Charter Schools, a charter network based in Houston, said his organization plans to apply for an i3 grant, and has been discussing two possible strategies. One would be to band together with several charter networks across the country to submit an application, and the other would be to jointly apply with other Houston organizations.

“Everyone is very dialed into this, especially given the philanthropic environment right now” in the economy, he said.

But Mary J. Kusler, the assistant director of the American Association of School Administrators in Arlington, Va., worries that many rural districts in particular face a disadvantage, as they may lack the resources and connections to put together a strong application.

“Unless you have a consortium, maybe a proactive educational-service agency or a nonprofit working with rural districts, I doubt that rural districts ... will get this money,” she said.

Philanthropy’s Role

The stimulus law spells out a clear role for the private sector, and philanthropy in particular, in providing “matching funds in order to help bring results to scale.”

Beyond that, Education Department officials are apparently working to attract commitments from private foundations to further expand the pool of money available, with one idea being to create some sort of complementary fund to the i3 fund that would help fuel additional projects, and potentially pay for initiatives that might not be allowable under the federal program.

In an interview, James H. Shelton, the assistant deputy secretary who leads the Education Department’s office of innovation and improvement, declined to comment specifically on any such efforts, other than to say: “We’re always in active conversations with philanthropy to get maximum public and private dollars going into education reform.”

Christine T. Tebben, the executive director of Grantmakers for Education, a national network based in Portland, Ore., said that while the idea raises some thorny questions, it may be attractive to philanthropies to contribute to a fund that complements the i3 program.

“We have a moment and an opportunity here,” she said, and supporting such a fund may be “a way to help push a much broader agenda.”

She added: “Funders also recognize that there’s strength in numbers” in helping to achieve “any kind of scale.”

Vol. 29, Issue 03, Pages 1,26

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