Private Giving to Public Schools: Does it Work?

July 19, 2002 • Commentary

This week, three major charitable foundations announced that they would no longer provide grants to Pittsburgh public schools. The Pittsburgh, Heinz, and Grable Foundations have made a responsible decision in the face of the Pittsburgh Public School system’s continued failure to improve. In retrospect, failure should be no surprise. Other foundations and individuals that have tried to help public schools with private funds have been similarly frustrated and disappointed.

Most notably, the Annenberg Foundation donated $500 million to public schools over a period of five years, hoping to “energize, support and replicate successful school reform programs throughout the country.” The funds were issued to school districts in the form of “challenge grants” that had to be matched by other private or public funds. Many school districts raised funds several times that amount from other foundations, corporations and individuals. The program ended in 1999–2000, after several billion dollars had been spent.

What was the result? Nothing special. Most progress reports merely described programs, personnel, and resources in place, without much mention of academic improvements, increased efficiencies, or reform ideas that could be replicated elsewhere. The Thomas B. Fordham Foundation, a private organization headed by former U.S. Assistant Secretary of Education Chester Finn, evaluated Annenberg’s efforts in its report, “Can Philanthropy Fix Our Schools?” Its conclusion was that no school district receiving funds had clearly identified an effective program or solution that could be reproduced elsewhere. Most often, the grants had been used to prop up existing programs or to create pet projects already on the public education agenda. Seldom did the schools bring in new ideas from the outside.

Despite those failures, foundations and corporations continue to give funds to public schools. This year, the Bill and Melinda Gates Foundation announced contributions that total more than $40 million. Although the grants will go to start 70 new smaller high schools, they will be awarded to the same school board members and school officials that run our current public school system. Former U.S. Secretary of Education Bill Bennett once referred to the bureaucracies that run our public schools as “the blob” — resistant to change and well entrenched.

Does private philanthropy help a school district improve? Or do private foundations throw good money after bad by enriching a failed and ineffective education system that can’t easily change? Unfortunately, it is usually the latter. School districts spend private funds on programs that make a difference, if at all, only in the short term. Lasting effects are hard to find. At best, grants help a limited number of students who are affected by a special program that may not exist otherwise. At worst, they allow a school district to avoid or postpone needed fundamental reforms.

What then should philanthropists do? If giving money to public schools isn’t part of the answer, what is? Many charities have instead used their money outside of the public school system, creating private scholarship programs that cause public schools to respond with positive reforms. These givers know that public schools can seldom be fixed from the inside out. Private alternatives provide the competitive pressure that motivates public schools to improve.

Two examples are New York publisher Ted Forstmann and John Walton, of the Wal‐​Mart family, who started the Children’s Scholarship Fund. Their program, now with over 100 affiliates around the country, issues private school scholarships to low‐​income children. Its growth has been a significant factor behind the nationwide school choice movement. Hundreds of low‐​income parents line up in communities around the U.S. for the scholarships. This shows how strongly parent’s feel about the need for a better education for their children. Studies show that public schools have responded favorably to increased competition from private schools, making changes in curriculum and reducing bureaucracy.

Before giving money to public schools, philanthropists should carefully consider the history of waste, failed projects, and misused funds that have plagued past efforts. Former Apple Computer guru Steve Jobs once commented on his own philanthropic efforts to help failing public schools by giving computer equipment to schools. He came to the conclusion that “no amount of technology will make a dent.” “What’s wrong with education cannot be fixed with technology,” he said. “The problem is bureaucracy.”

Instead of funding the public school “blob,” individuals and foundations should fund projects that provide help to school children directly through private scholarships, or fund organizations that promote school choice and healthy competition. Business people understand that single‐​supplier monopolies don’t work. Giving more money to that monopoly won’t improve it. Creating healthy competition is the only thing that will.

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