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Education Funding Opinion

The Big Philanthropic Shift: Now What?

By Rick Hess — May 07, 2012 2 min read
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I recently wrote a piece for Phi Delta Kappan exploring a couple of the key developments in edu-giving since 2005. That’s the year I published With the Best of Intentions: How Philanthropy is Reshaping K-12 Education, in which I (in my usual mean-spirited fashion) used the dismal experience of the then-recently concluded $1.1 billion Annenberg Challenge as a jumping-off point.

Today, a lot has changed. Back in 2005, Gates Foundation officials were, for the first time, seriously considering whether to play an active role in shaping public policy. Race to the Top, the Common Core, Democrats for Education Reform, and StudentsFirst were unimagined. No one would seriously suggest New Orleans, Washington, D.C., or Newark as hotbeds of school reform. Diane Ravitch was still a champion of school choice and accountability, and few had heard of Michelle Rhee, Deborah Gist, Jon Schnur, or Geoffrey Canada. No Child Left Behind was still novel and fairly popular, and not a single state was trying to build teacher evaluation around value-added systems.

Today, the world looks real different. These developments all (for better and worse) owe something to policy-oriented giving. “New sector” philanthropy has helped shift the school reform landscape. For a quick glimpse of what’s happened, just compare the biggest givers in 2010 and those a decade before.

According to the Foundation Center, the five biggest K-12 givers in 2010 were:
1. Bill & Melinda Gates Foundation -- $209 million;
2. Walton Family Foundation -- $110 million;
3. W.K. Kellogg Foundation -- $58 million;
4. Michael and Susan Dell Foundation -- $55 million; and
5. Silicon Valley Community Foundation -- $35 million

Back in 2000, the Foundation Center reported that they were:
1. Bill & Melinda Gates Foundation--$276 million
2. The Annenberg Foundation--$88 million
3. Walton Family Foundation--$48 million
4. J.A. & Kathryn Albertson Foundation, Inc.--$32 million
5. The Ford Foundation--$25 million

While the Gates Foundation has remained the biggest player over the past decade, the Walton Foundation has substantially upped its investment. Meanwhile, once-influential entities like Annenberg and Ford have declined in import.

All this has profound implications for the way we view education philanthropy. As I write in PDK:

A decade ago, a big frustration for edu-philanthropists was the sense that they would invest in exciting programs or practices, but that these never seemed to deliver lasting improvement. A piloted reading or mentoring program would offer promising results, only to disappoint when scaled. Or a foundation would underwrite professional development or a new curriculum for several years, only to see it die on the vine when outside funding dried up. Or funders would help launch dynamic schools, only to see them fall apart when the charismatic founder left. Where an earlier generation of donors had chalked up the challenges to problems of implementation or program design, the new philanthropists were much more receptive to the notion that the problem was the inhospitable cultures, systems, and policy environments in which those scale-ups were being attempted. New donors who had made their fortunes in the new economy frequently staffed their foundations with Teach For America alums, MBAs, or other nontraditional educators and focused on problems posed by system rigidity, leadership, and policy. The new givers gravitated towards a strategy that rested on three key insights, all sketched out in The Best of Intentions: First, University of Arkansas professor Jay Greene's seminal analysis pointed out that the amount of edu-philanthropy is so small that it's ridiculous to think that investments in programs or practice will have a noticeable impact. Using various approaches, Greene calculated that all private giving combined amounts to perhaps 1% of total K-12 spending -- or, maybe, one penny on the dollar. Consequently, he argued that philanthropy only mattered when it funded "high-leverage investments" (e.g. when it altered policies or practices governing the long-term use of the public funds that account for 99% of school spending). Second, Don McAdams, founder of the Center for Reform of School Systems, argued that philanthropy typically entails limited dollars in the grand scheme of things, but has an outsized influence because this money is nimble and can be used to drive a state or a district's reforms, where it's hugely difficult to redeploy more than a sliver of public funds. Third, a vital piece of leverage was producing research and supporting advocacy in a manner that would shape policy. Policy analyst Andy Rotherham argued that this kind of investment could be aptly captured by the old adage: "Give a man a fish and you feed him for a day, teach him to fish and you feed him for a lifetime." Foundation-backed advocacy, research, and proof points that new rules were possible offered a way to alter public policies and priorities.

Back in 2005, I heartily endorsed the policy-centric approach that the contributors had encouraged. I continue to do so today. And I think the results speak to the potential impact of this tack. At the same time, I’ve long wrestled with the repercussions. I’ve worried about foundations being wedded to reformers who tell them what they want to hear, the perils of groupthink, and the disinclination of critics to challenge deep-pocketed funders. And I’ve worried how all of this gets even dicier when foundations are linking arms with the federal government.

I’ve no easy answers, other than the surety that these are questions we need to talk about and openly discuss more frequently, more productively, and with less hostility than has been the norm.

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