Walton Family Puts Stamp on Education Landscape

What do a KIPP middle school in the Arkansas Delta, the California Charter Schools Association, and the Black Alliance for Educational Options have in common?

All three might not exist today if it weren’t for the early backing of the family that brought America Wal-Mart.

With no fanfare and a distaste for publicity, the Bentonville, Ark.-based Walton Family Foundation has played a key role in fueling a vast array of efforts to advance school choice, including charter schools, vouchers, and tuition tax credits to support private schooling.

In some analysts’ view, the foundation has at times used a heavy hand to influence the direction of work in the contentious world of K-12 choice. Still, observers say a strong case can be made that no other private organization has done more to put school choice on the map.

Record of Giving

In 2007, the Walton Family Foundation provided $242 million in mainly grants and some loans to categories including K-12 education, environmental conservation, and projects in Northwest Arkansas and the Delta region of Arkansas and Mississippi. About $23 million of the K-12 total, all in the Public Charter Schools Initiative, was in the form of loans to be repaid at low or no interest. Under the Special Initiatives category, $60 million went for developing an art museum slated to open in Bentonville, Ark., in 2010.

SOURCE: Walton Family Foundation

“They’ve been enormously influential, partly because they have a very clear theory of action, and they’ve chosen to focus very consistently on questions of choice-based reform,” said Frederick M. Hess, the director of education policy studies at the American Enterprise Institute, a Washington think tank.

Established in 1987 by Sam Walton, the founder of the Wal-Mart retail chain, and his wife, Helen, the foundation over the past decade has become a leading private donor to K-12 education. It ranked second only to the Seattle-based Bill & Melinda Gates Foundation in K-12 giving in 2006, according to an analysis by the Foundation Center, a New York City-based group that tracks grantmaking by U.S. philanthropies.

Last year, the Walton Family Foundation provided $94 million in education grants, plus $23 million in loans. Nearly two-thirds of the giving and all of the loans were aimed at the charter school sector.

Eventually, observers say, the Walton Foundation could spend far more, potentially rivaling the Gates Foundation. Such analysts point to the wealth of Walton family members—four were ranked in the top 20 of wealthiest Americans this year by Forbes magazine—as well as the recent death of Helen Walton. Much of her multibillion-dollar estate is eventually expected to go to charitable giving. (Sam Walton died in 1992.)

A Clear Strategy

The central focus of the foundation’s education work is to promote parental choice in low-income communities, where families often lack high-quality options. In pursuing that agenda, the foundation has been highly strategic in targeting its financial resources on specific “levers of change,” according to Mr. Hess.

The foundation has supplied critical funding to open individual charter schools, helped pay for the creation and expansion of charter networks, supported knowledge collection and research on school choice, and backed a wide range of state and national organizations that provide support and advocacy for charter schools and voucher programs.

Over the past several years, the foundation has increasingly begun to concentrate its efforts on a small set of cities, including Chicago, Denver, Los Angeles, Milwaukee, Newark, New Orleans, New York, and Washington, to help create “a critical mass of alternatives,” said James C. Blew, the foundation’s director of K-12 education reform. And, while it has generally worked outside traditional systems, the foundation also is looking to work directly with school districts, when it feels the conditions are ripe, he said.

Just recently, it committed more than $6 million over the next three years to help the state-run Recovery School District in New Orleans transform its high schools into choice-based academies that any student citywide may attend.

‘The Power to Choose’

Putting Choice on the Map

The Walton Family Foundation provides planning and startup grants for charter schools, with each school eligible for up to a total of $270,000. The program primarily targets 29 communities, mostly large cities, plus all of Arkansas. Eligibility requirements include showing “strong potential for delivering excellent academic results” and serving “significant low-income student populations.” In 2007, the foundation awarded 155 startup grants.

SOURCE: Walton Family Foundation

Despite the foundation’s largess and prominence, it remains something of a mystery to many people, and it has discouraged attention to its role. It operates with a relatively small staff. Nine people, a blend of full-time employees and consultants, handle the foundation’s day-to-day education work, said Mr. Blew.

He declined to discuss the foundation’s internal decisionmaking process in setting strategy and priorities, other than to say that “it is collaborative and involves participation by all the adult descendants of Sam and Helen Walton.”

The foundation supports causes in addition to education, including marine and freshwater conservation, and a host of projects specifically in the Mississippi River Delta region of Arkansas and Mississippi and in northwest Arkansas, from expanding access to the arts to economic development.

Outside the foundation, individual Walton family members have directly donated millions of dollars to political causes and campaigns that promote school choice or choice-friendly candidates. Those range from ballot measures to enact voucher programs to political action committees like All Children Matter, which has worked to promote pro-voucher candidates and legislation.

The foundation’s focus on school choice dates back to the early 1990s, said Mr. Blew, and became more extensive later in the decade. In 1997, for instance, it launched its formal startup grant program for charter schools.

Observers say the leading force behind the philanthropy’s strong focus on education in general, and choice in particular, was John T. Walton, one of four children of Helen and Sam. John Walton died in 2005 while flying an experimental aircraft. (“Sam Walton’s Son Played Major Role In Setting Agenda On School Choice,” this issue.)

The organization’s approach of backing both public and private school choice sets it apart from most of the other major national foundations, which tend to avoid the politically contentious voucher issue.

“The foundation is totally agnostic about where a child gets an education,” said Mr. Blew, whether in a regular public school, a charter school, or a private school. “We care about schools that work.”

Pressure on the System

Ultimately, Mr. Blew said, the foundation seeks through its school choice agenda not only to provide new, high-quality options for disadvantaged students, but also to create competition that will put pressure on traditional public school systems to pursue dramatic improvements.

“Through its investments, the Walton family has helped empower large numbers of low-income parents to choose good schools for their children,” he said. “That, in turn, is beginning to empower a few reform-minded district leaders to enact needed, fundamental reforms. As far as I can tell, the family doesn’t plan to stop until every child in America has the power to choose among several good school options.”

Some critics, however, see a different agenda.

“The Walton family and the Walton Foundation by extension appear to have a very clear social, economic, and political ideology,” said Alex Molnar, an education professor at Arizona State University in Tempe, who has studied school choice and privatization efforts. “They appear to be very strong proponents of unfettered markets, competition, deregulation, privatization, and so on.” That viewpoint leads them to “a kind of infatuation with charter schools, vouchers, and contracting-out,” he said.

Mr. Molnar argues that the foundation offers the “pretense” that its choice agenda represents a model for the overall improvement of public education.

“It’s not,” he said. “It’s an ideological tool for dismantling public education.”

Andrew J. Rotherham, the co-director of Education Sector, a Washington think tank, says that while he applauds much of the foundation’s work in the charter sector, he disagrees with the argument that just introducing competition will lead to broader changes in public school systems.

“My big criticism of them is their theory of action, which is market-driven,” he said. “I don’t think that works by itself.”

The foundation’s K-12 giving has increased over the past few years. From 2005 to 2007, it grew from $77 million annually to nearly $94 million, up about 22 percent. Another $23 million in 2007 was in the form of loans, which Mr. Blew said typically are provided to help charter schools get access to facilities.

The foundation also provides some education dollars directly to its home state, not just to promote school choice, but also to help local districts with school accountability and other matters.

“They give to many different quarters [in Arkansas],” said Daniel N. Marzoni, the president of the Arkansas Education Association, an affiliate of the National Education Association. “Some of them we definitely like, and some of them we’re not too happy with.”

A ‘Vote of Confidence’

On the charter front, the philanthropy is unusual in that it not only supports the growth of charter networks, such as KIPP, or Knowledge Is Power Program, schools across the country, Oakland, Calif.-based Aspire Public Schools, and New Haven, Conn.-based Achievement First, but it also continues to help nurture a wide range of individual schools not affiliated with any such network through its charter school startup program. Charter schools are publicly financed but operate largely outside the regular system.

“In an era where most of the foundations are gravitating to chains [of charter schools], Walton has maintained a big part of its portfolio in the stand-alones,” said Bryan C. Hassel, a charter expert based in Chapel Hill, N.C. “It really sets them apart.”

Mr. Blew said most of the charter schools that have grown into larger networks received initial support from the Walton Foundation, and that the philanthropy believes some schools it’s backing today will supply “the next generation” of successful networks.

The program currently provides school founders with up to about $270,000 in aid to help plan and open new charter schools. The foundation has helped create more than 750 charter schools, Mr. Blew said.

Charter leaders say the grant money has been critical. “It would have been very difficult to start our middle and high schools without the startup funding,” said Scott A. Shirey, the executive director of kipp Delta Public Schools in Arkansas and who was the founding principal of the middle school.

Mr. Blew said one important change in the foundation’s approach over time, both in the charter school program and elsewhere, is to place a greater emphasis on promoting higher school quality.

So, it has tightened its grantmaking criteria for charter schools.

“Early on, the foundation thought it would be enough to insert any promising educational option into a community, even if that option proved to be only marginally better than the traditional school district,” Mr. Blew said. “While the foundation doesn’t regret those investments, ... they’re not game changers.”

Shaping State Organizations

One of the foundation’s biggest contributions to the charter movement, analysts say, is backing state associations. It currently supports such groups in 19 states, Mr. Blew said. But he cautioned that the foundation is not the sole funder for any state group.

“We very much require them to match our funding with earned and donated revenue,” he said.

Here, too, the foundation is focusing greater attention both on ensuring effective advocacy and pressing state associations to take an active role in improving academic achievement across charters.

“They’ve been a major influence in moving those organizations [toward] ... an insistence on quality among their own members,” said Nelson Smith, the president of the National Alliance for Public Charter Schools, a research and advocacy group Walton also supports.

“Walton has very high expectations for state organizations to rise to,” said Lisa S. Grover, the executive director of the New Mexico Coalition for Public Charter Schools.

She said that while she believes her organization has done solid advocacy work on behalf of charters, it’s proving more challenging to find the best ways to effectively promote increased academic performance across schools and bring in extra revenue by providing products or services to charters.

“A lot of times, the schools don’t have a lot of extra money,” she said.

Clint R. Bolick, a veteran school choice lawyer who serves on the board of the Arizona Charter Schools Association, said the Walton Foundation has helped to “reinvigorate” that group, which has seen wholesale changes in leadership and approach.

“That has been enormously important in terms of self-regulation [of charters] and battling the education establishment beast,” Mr. Bolick said. “It’s now a much stronger, much more sophisticated organization. I give them huge credit for that.”

In California, John Walton and the family foundation played a key role, along with several other private funders, in helping to create the California Charter Schools Association, when efforts to broker a merger between two statewide charter groups faltered. Mr. Walton then served on the board for the group.

“They, along with others, really engineered the creation of the [California] charter organization,” said Mr. Hassel. “They’ve played a big role in creating the state-level infrastructure [across the country] and often being directive in how, through their funding, things evolved in a given state.”

Indeed, some observers worry that the foundation wields too much influence.

“Because the Walton Family Foundation has been so instrumental in the development and growth of the charter movement, the movement has become dependent on them, so who is running who?” said Marc Dean Millot, the editor of the Alexandria, Va.-based online newsletter School Improvement Industry Week and the author of edbizbuzz, an independent blog on edweek.org.

‘We Would Not Exist’

Beyond the charter sector, the foundation has provided millions of dollars to advocacy groups that promote private school vouchers and tuition tax credits, such as the Black Alliance for Educational Options and the Washington-based Alliance for School Choice.

It also has long given money to private programs that pay for scholarships for low-income students to attend private schools, through organizations such as the Children’s Scholarship Fund, which John Walton founded with New York City financier Theodore J. Forstmann.

Howard L. Fuller, a longtime school choice advocate and the board chairman at the Black Alliance for Educational Options, said the support from John Walton and his family philanthropy was vital to getting the group off the ground.

“We would not exist had it not been for his support, initially,” he said. “John and [his family’s foundation] were willing to take a chance on our organization.”

Mr. Bolick, the former president of the Alliance for School Choice and now the legislative director at the Goldwater Institute, a free-market think tank in Phoenix, said that in addition to direct funding for private-school-choice efforts, the foundation “has provided a great deal of direction to the movement, and its presence has made the school choice world safe for some other foundations.”

Critics argue, however, that Walton doesn’t have a lot to show for its investments.

“Even though they’ve contributed gobs of money now for many years, they still haven’t moved the needle very much on the voucher issue,” said Marc F. Egan, the director of federal affairs for the Alexandria, Va.-based National School Boards Association. He argues that the number of programs is still small, and that “most of those are pretty narrow, limited programs.”

Looking ahead, Mr. Blew said the foundation is eager to work directly with some urban districts, as it has begun to do in New Orleans, once the conditions are right. The key, he said, is for the districts to offer a dynamic choice environment for families. With that in place, the foundation is prepared to help with other matters, such as recruiting teachers or providing them with performance-based pay incentives.

“The point,” he said, “is that the Walton Family Foundation wants to help districts respond constructively [to choice] and not just work to snuff out the competition.”