Education Funding Commentary

The Challenge of Giving

By Rick Hess — January 17, 2006 7 min read
Philanthropy constitutes only a fraction of 1 percent of total spending on K-12 schools, but initiatives like the Gates high school effort illustrate how such money can have a vastly disproportionate impact on the direction of America’s schools.

From the Gates Foundation high school initiative to the Annenberg Challenge, from the Children’s Scholarship Fund to the Broad Prize for Urban Education, philanthropic efforts are playing a catalytic role in contemporary school reform. Yet while such giving has helped define effective practice, forge school-community relationships, shape policy agendas, and redirect research, the nature of its influence remains shadowy and little understood.

U.S. taxpayers are spending upwards of $500 billion on K-12 schooling this year. In contrast, an analysis by University of Arkansas professor Jay P. Greene that appears in a book I published last fall suggests that total philanthropic giving to K-12 schooling amounted to less than $1.5 billion in 2002 (the most recent year for which spending could be calculated). In Greene’s evocative phrase, conventional philanthropic reform strategies amount to little more than casting “buckets into the sea.” This makes it imperative that donors and recipients think long and hard about leverage.

The most visible and significant philanthropic undertaking of the 21st century is the Bill & Melinda Gates Foundation’s ambitious effort to reshape the American high school. Founded by the world’s richest man, Microsoft co-founder Bill Gates, the Gates Foundation came from nowhere in the mid-1990s to become the nation’s biggest education giver by the beginning of the new century.

— Nip Rogers


In February 2005, after several years of prominent Gates Foundation support for high school reform initiatives across the country, Gates delivered a keynote speech to the nation’s governors at a National Governors Association conference. Garnering headlines like “Mr. Gates Goes to Washington” on The New York Times editorial page, Gates told the assembled governors: “Training the workforce of tomorrow with the high schools of today is like trying to teach kids about today’s computers on a 50-year-old mainframe. It’s the wrong tool for the times.” Immediately, more than a dozen governors signed up after the conference for the American Diploma Project Network, which has enjoyed strong backing from the Gates Foundation. Gates has been far from alone in such efforts.

Philanthropy constitutes only a fraction of 1 percent of total spending on K-12 schools, but initiatives like the Gates high school effort, Walton Family Foundation support for school choice, and the Broad Prize illustrate how such money can have a vastly disproportionate impact on the direction of America’s schools.

Since the late 1990s, established education givers like the Ford, Carnegie, and Rockefeller foundations have cut back their role in K-12 schooling, while new entrants like the Gates, Broad, and Walton foundations have moved rapidly to the forefront. In 1998, the top four foundations in total giving to elementary and secondary education were the Annenberg Foundation, the Lilly Endowment, the David and Lucile Packard Foundation, and the W.K. Kellogg Foundation. Emphasizing measures like curricular reform, professional development, and community participation, these four foundations accounted for about 30 percent of all giving by the top 50 education donors.

Just four years later, in 2002, the top two givers were the Bill & Melinda Gates Foundation and the Walton Family Foundation, both prominent supporters of school choice and charter schooling. Meanwhile, other traditionally prominent K-12 funders like the Pew Charitable Trusts, the Packard Foundation, and the Rockefeller Foundation were scaling back their K-12 efforts.

This shift is significant in two ways. One is its starkness. In 1998, neither Gates nor the Walton family was among the top 25 givers to K-12 education. The other is that the new donors, most of whom have made their fortunes as entrepreneurs and hands-on corporate leaders in the new economy, have little patience for educational bureaucracies, traditional approaches to giving, or pleas to give the public schools more time. Instead, embracing a theory of entrepreneurial giving, the new entrants have favored endeavors such as charter schools, new high schools, and nontraditional programs for recruiting teachers and leaders, while also taking an active role in partnering with grantees.

American K-12 schooling is a wonder of statutes, regulations, legal guidelines, licenses, organizational routines, contractual provisions, and political pressures. At times, the prohibitions and restrictions seem so dense that it is only natural that most education reform is about tinkering with more easily influenced elements like curricula, pedagogies, training, and management routines—creating a constant whir of activity but changing little of substance.

Given their independence, flexibility, and resources, reform-minded philanthropists are in an exceptional position to upend this cycle of tinkering. Because policymakers and officials have trouble imagining what they have never seen and are understandably hesitant to advocate untested measures, foundations can play a critical role in nurturing programs that would otherwise never see the light of day. Foundations have also played a vital role in helping new, entrepreneurial individuals find their ways into the world of schooling. Ultimately, however, the likelihood is that these programs and talented individuals will be stranded like jalopies along a rutted road if the policy terrain is hostile.

High-profile givers must understand that how they use their megaphone may matter as much as their particular funding decisions.

The new givers have learned the importance of focusing on the sustained, lasting results of their generosity. William Porter, the executive director of Grantmakers for Education, has explained that high-impact givers are asking themselves: “Once your grant dollars are done, how do you sustain the change?” In a sector where even the most generous gifts are no match for the money routinely spent on outdated and outmoded systems, the “new” education philanthropy’s influence will ultimately turn on its ability to change politics and policy.

In fulfilling this promise, five central challenges emerge for givers, policymakers, and educators. First, donor commitment to embracing a coherent reform strategy may sometimes clash with efforts to foster diverse ideas and entrepreneurial approaches. Rather than seeking to determine whether one or the other tack is the “right” course, reformers should recognize this as a healthy tension to be accepted and monitored.

Second, it is worth recognizing the perils posed by the “political economy” of evaluation. Researchers dependent on philanthropic organizations for access and support have good reason to provide genteel evaluations, while few of their peers have much incentive to turn a skeptical gaze on new initiatives. The result: a culture in which evaluation can be more about public relations than learning, and in which thoughtful criticism of new “silver bullets” is rarely delivered in a timely fashion.

Third, when confronted with the possibility that they will be assaulted for their civic efforts, there is a temptation for donors to give in conventional, inconspicuous, educator-directed ways and to soft-pedal the policy implications of their more daring efforts. Given the understandable pressures on any given foundation or grant officer to exercise caution, this is a place where high-profile givers must understand that how they use their megaphone may matter as much as their particular funding decisions.

Fourth, individual schools and promising programs have long enjoyed much greater support than “pipeline” programs (like Teach for America or New Leaders for New Schools) that channel a river of energetic, entrepreneurial talent into the education sector. Donors and foundation staff have an understandable preference for schools, scholarships, and concrete programs where they can see the children benefiting from their largess. Nonetheless, deepening the educational talent pool is probably the single most important role givers can play.

Finally, recognizing that the price of innovation has too often been faddism and a fascination with the new and the glib, the new generation of donors has sought to discipline its giving by emphasizing results and accountability. Whether the new givers can keep this sensible discipline from morphing into green-eyeshade bean-counting or an aversion to risk-taking will require striking a difficult, thoughtful balance in the years ahead.

Historically, America’s great successes have come not from central planning, government leadership, or intricate programs for social betterment, but from the noisy cacophony of free men trying, failing, cooperating, and competing. In the world of public schooling, where district bureaucracies, state statutes, and established cultures resist fundamental change, philanthropy in all its scattered, untidy variety is especially essential to the healthy competition of ideas. Learning this lesson, and how to the make the most of it, is vital if philanthropy is to fulfill its promise for 21st- century schooling.

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