Who’s Behind the Money?

While names like Rockefeller, Ford, Annenberg, and Carnegie traditionally have dominated foundation-funded education reform, in recent years a new group of foundations has emerged — Gates, Walton, and Broad, to name a few.

These new foundations, financed by titans of 21st-century capitalism, have emerged in an era of conservative dominance where the overarching political agenda is privatization — seen most clearly in the effort to privatize the country’s premier public safety net, Social Security.

Questions inevitably surround the relationship of these new foundations to efforts to privatize education and promote market-based reforms — efforts that often undermine the public nature of public schools, focus on business efficiency models rather than sound educational practices, and promote a narrow view of education as mere job training.

The Walton Family Foundation, supported by Wal-Mart money, is an aggressive player that focuses almost exclusively on privatization efforts via charter schools and support for taxpayer-funded vouchers for private schools. (“Old-money” conservative foundations such as Scaife, Olin, and Bradley have long targeted their education grants to vouchers and privatization.)

The Los Angeles-based Broad Foundation opposes large-scale use of vouchers and focuses on public education but often extols market-based reforms. Eli Broad and his family created the foundation in 1999 to focus on K-12 education in urban areas, later expanding its initiatives to include the arts and scientific and medical research. Broad made his money building two Fortune 500 companies, AIG Retirement Services Inc., an insurance and financial services company, and the residential construction company KB Home.

The foundation’s website notes, “From the beginning, The Broad Foundation sought to be different — in its philosophical insistence on entrepreneurship and innovation, and in its willingness to take financial and political risks to develop a demonstrable track record of success.”

In a “personal message” on the foundation’s website, Broad extols the importance of privatization initiatives in fostering competition to improve public schools. “Charter schools, private schools, Edison schools, parochial schools, and opportunity scholarships all provide healthy competition to our K-12 schools,” Broad says. “I support rapidly increasing the number of seats available outside of our public school system.”

The Gates Foundation has not openly advocated strongly either for or against privatization. On many policy and ideological issues, the foundation seems to take an agnostic position. Some argue this is shrewd politics by a foundation closely affiliated with a computer magnate who often is the target of politically sensitive lawsuits. But others fear that this neutrality allows the foundation to collaborate too willingly with the conservative movement’s privatization agenda.

Tom Vander Ark, who leads the foundation’s education efforts, has a corporate background that informs his perspective. In a 2001 interview, when asked about the role of philanthropic groups in school reform, he said, “We’ve traditionally thought of schools [as being within] the purview of government and philanthropy. Now, a powerful third force is the education marketplace. From Edison to textbook publishing to education technology players, a new revolution is occurring in e-learning…. you have set the stage of a fundamental rethinking of education. Increasingly, there is a marketplace of choice in education.”

While most Gates Foundation grants go to public schools, more than 15 percent of schools started with Gates money are charter schools, and an additional 5 percent are private schools, according to the foundation. In the last few years, the foundation granted $4 million to the strongly pro-voucher Black Alliance for Educa-tional Options to establish 15 small schools. It also has given $19 million to the Cristo Rey network of Roman Catholic Schools, citing its Chicago school as a model for small school reform. The foundation has also granted $4.4 million to Christian Schools International, a Michican-based group headed by Daniel Vander Ark, a relative of Tom Vander Ark.

That a private foundation supports private education is not unusual. However, it appears that Gates was also sending a signal and distancing itself from progressive school reformers who established many of the early models of small schools and who, for example, promoted initiatives such as performance-based teaching and accountability rather than reliance on standardized testing.

Thomas Toch, writing in the December 3, 2003 Education Week, wrote that the Gates Foundation “set itself up for criticism by letting itself be identified too closely with progressive school reformers…. Realizing this, the foundation has worked hard recently to fund high schools with diverse educational philosophies.”

Toch’s commentary went on to say that, unlike many progressives associated with small school reform, “the Gates Foundation knows that account-ability, school choice, and autonomy from school system regulations and union rules are important to its small schools campaign. It endorses the reforms.”

Toch is director of the Policy Forums program of the National Center on Education and the Economy. The Gates Foundation funded research for his book High Schools on a Human Scale, which profiles several small schools.

Reform and Democracy

Regardless of a foundation’s politics, the growing role of private money in public school reform raises concerns about democratic control of public education.

Throughout the country, various education initiatives — from small schools to vouchers to pay-for-performance to charters — are often instituted not because the community demanded them, but because some foundation decided to fund the initiatives. Conservatives have been particularly adept at claiming the reforms came from the bottom up.

The problem of foundation-driven reform is particularly acute given the budget cuts facing public schools. Because public dollars are focused on essential services, schools and districts often look to foundations to fund new initiatives. Unfortunately, schools and districts sometimes look to see what will be funded and then go after that reform, rather than deciding what reform works best for them and then convincing a foundation it is worth funding.

All of which gives foundations — private institutions with private boards, behind-the-scenes decision-making and no public accountability for the success or failure of their programs — inordinate power in determining public policy.

“What we’ve done is create a new nobility, where basically the lords and ladies decide who gets the money,” argues Barbara Dudley, head of the Veatch Foundation in the early 1990s, former director of Greenpeace, former president of the National Lawyers Guild, and currently an adjunct professor at Portland State University. “They might be good decisions by good people who are very bountiful with their gifts. But they are still gifts. It is not democratic and you can’t pretend that it is.”

One often-cited problem with foundation-driven reform is that schools and educators may be so eager to win a grant that they don’t provide honest feedback to foundations on what will or won’t work. As one person said off the record, “People are afraid to speak truth to power, and so foundations don’t always hear what they need to hear.”

And then there is the problem of one foundation’s reform coming along to “fix” a previous foundation’s reform — as is the case with Gates and small schools.

Richard Rothstein, former education columnist for the New York Times, noted in a 2002 column that it was the Carnegie Foundation that 40 years ago promoted the consolidation of small high schools in the effort to build comprehensive high schools offering both a college-bound and vocational curriculum.

Rothstein also noted that foundations are, in effect, giving away the public’s money but without public control. “Philanthropists get tax breaks when they endow foundations; for every $10 they donate, government loses about $4 in taxes,” he wrote.

Strategically, the most viable way to decrease reliance on foundation-driven reform is by increasing publicly controlled resources for schools — which would entail corporations and wealthy individuals paying their fair share of taxes.

“Once you have made the fundamental decision that people get to hold onto their wealth and are not taxed, you have set up the system for an oligarchy,” argues Dudley. “There’s no getting around it. You cannot re-democratize it after you have set up that system.”