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Education Funding Commentary

A Mantra for K-12 Philanthropy: First, Do No Harm

By Rick Hess — July 16, 2014 5 min read
Facebook CEO Mark Zuckerberg delivers the keynote address at a Facebook conference earlier this year in San Francisco. Zuckerberg and his wife, Priscilla Chan, recently announced a $120 million donation to the San Francisco Bay Area’s public school system.

In May, Facebook founder Mark Zuckerberg announced his new $120 million gift to San Francisco Bay Area public schools. The timing was ironic, coming on the heels of Dale Russakoff’s devastating portrayal in The New Yorker of the aftermath of Zuckerberg’s $100 million gift to Newark, N.J. In that earlier effort, Zuckerberg helped fuel a concerted effort by then-Mayor Cory Booker and New Jersey Gov. Chris Christie to transform embattled schools that had languished under state control for two decades.

It might have been wise for Zuckerberg to have first dwelled a bit more on the results of his 2010 gift before blasting another cash barrage. For one thing, his Newark gift has not delivered the hoped-for reforms and results, despite the $100 million in matching funds raised by Mr. Booker, the steadfast support of the governor, and the best efforts of hard-charging Superintendent Cami Anderson. In fact, it is a pretty good example of why money alone is not an answer, but can be part of the problem.

Around the country, cities already spend a lot of money per pupil—more than private schools, in many instances—with not much to show for it. Newark spends more than $26,000 per child—more than it costs a New Jersey resident to attend Rutgers University, live on campus, and join the meal plan in 2013-14. While more school spending is usually held to be an apple-pie sentiment, extra funds can actually make it tougher to turn dysfunctional systems around.

While more school spending is usually held to be an apple-pie sentiment, extra funds can actually make it tougher to turn dysfunctional systems around.”

School systems spend so much that it’s hard for even giant gifts to amount to more than a modest boost. Before the Zuckerberg donation and the match, Newark was already spending $1 billion a year on schools. Thus, the additional $200 million amounted to only a 4 percent annual boost. Not surprisingly, the results have been commensurately modest. Test scores have mostly declined. The effort has run into fierce local blowback, with the new mayor, Ras Baraka, being the most prominent local opponent of the Zuckerberg-funded reforms. Plans for a dramatic charter school expansion have ground nearly to a halt.

None of this should surprise us. New dollars often just subsidize bloated school administration and outsize benefits for staff. In 2010, less than half of Newark school spending actually reached classrooms. Newark schools had one administrator for every six students, and even clerks had their own clerks, according to Russakoff’s reporting. A 2010 Pepperdine University study examined 52 California districts from 2003-04 to 2008-09 and found that per-pupil spending jumped 25.8 percent, outpacing state income growth and inflation. Classroom expenditures actually fell as a share of the total spending, while teachers saw salaries rise by 28 percent and managers by 44 percent.

During the half-century between 1950 and 2009, public school staffing in the United States grew four times as fast as enrollment. The number of administrative and other nonteaching jobs grew seven times as fast as student enrollment. More recently, from 1992 to 2009, schools added administrators and other nonteaching roles 2.3 times as fast as they added students. In some cases, this can seem downright peculiar. In Maine, for instance, student enrollment fell by 11 percent from 1992 to 2009, but the number of public school personnel increased by 35 percent. During the nine recessions between 1955 and the recent Great Recession, school employment declined in just one—during the other eight, public education actually added jobs.

From 1933 to 2010, the United States spent more on K-12 schooling each year than the year before. Since 1970, after-inflation spending per pupil has tripled, while 17-year-olds’ performance on the National Assessment of Educational Progress is essentially flat in both math and reading. The Newark gift was not the first time that a lot of private money has been given to a public school system. In the 1990s, the Annenberg Challenge gave $500 million (with a match of another $600 million) to a collection of school systems, with no discernible impact. Michael Casserly, the executive director of the Council of the Great City Schools, which represents the nation’s biggest urban school systems, concluded that the big lesson was “Don’t do that again.”

The insight here is a familiar one: No one makes tough choices in flush times. Whether you’re a for-profit CEO or a nonprofit executive, nobody is eager to squeeze salaries, shut down inefficient programs, or trim employees. A manager who tries to do just that when times are good is quickly labeled as a mean-spirited S.O.B., hated by staff, and a disrupter instead of a builder. Tough times allow organizations to re-examine priorities and create a leaner culture focused on performance. Absent that discipline, school system leaders have found it all too easy to be lax at the negotiating table and casual about operational efficiencies. For instance, in 2013, even after the worst of the Great Recession, a 12-city study by the Pew Charitable Trusts found those systems were paying millions to maintain, heat, and insure 327 vacant schools.

More money can actually make it tougher to change stagnating school systems. Like management that keeps borrowing to prop up a flailing, bureaucratic firm, whether General Motors or Bethlehem Steel, it’s hard to make essential cuts or rethink familiar models so long as it’s possible to insist that the next round of cash will finally make things right. New spending offers the temptations of a gentler, easier course, and makes it possible to forestall tougher measures. Private-sector firms that refuse to change eventually get put out of business, but public ventures that refuse to do so just become the Newark schools. More money is not the way out.

For new dollars to help, they need to put troubled systems on a different trajectory entirely. That requires that funding be contingent on structural changes that will permit a new culture to take root. Such measures include slashing administrative bloat, closing empty schools, revamping collective bargaining agreements so that they reward excellence and address mediocrity, and getting a grip on benefit spending. Such decisions can be painful and disruptive, but are essential to set the table for long-term success. Critically, these moves become more practicable when the superintendent and the union leadership know (and can plausibly tell teachers and parents) that new dollars will only be unlocked if strong steps are taken. That was the approach that delivered the District of Columbia’s remarkable teachers’ contract under then-Chancellor Michelle Rhee, with its opportunity for a teacher with less than a decade of experience to earn north of $100,000.

Effective philanthropy enables a glide path to a different, sustainable model. It doesn’t just fund the latest education fad. Absent that kind of discipline, when asked to pour more money into schools, philanthropists and public officials alike would do well to remember the Hippocratic oath: First, do no harm.

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