Northwest Education: Compound Interest : Business and Philanthropy in Education Reform

Collected Wisdom

Pathfinders in business, philanthropy, and education look for common ground as they work together to make public education in the United States world class.

By Denise Jarrett Weeks

Winter 2003

One day in February 2003, on the campus of Georgetown University, presidents of some of the nation's most venerated foundations sat in a lecture hall and applauded as one of their colleagues took the podium.

Michael Bailin, president of the Edna McConnell Clark Foundation, was speaking as part of a lecture series presented by the university's Center for the Study of Voluntary Organizations and Service. Bailin began his talk by observing that they were in a period of "profound rethinking about the purpose and potential of foundations."

The days of aiming to transform huge, complex public systems—education, health, justice, and the like—by pushing an agenda onto ambivalent grantees are over, he said. Today, the purpose of foundations should be to throw support behind grantees who are already succeeding by some measures toward goals of their own making.

Beyond funds, philanthropies should provide expertise in organizational management, said Bailin. Philanthropies can help grantees to use effective business practices, such as creating business plans, measuring progress and outcomes, developing systems for continuous improvement, evaluating program effectiveness, reporting results to stakeholders, and so on.

In fact, Bailin likened the revolution in the philanthropic world to the transformation of the business world in the 1980s.

His own foundation, an august New York philanthropy created by the daughter of the founder of Avon cosmetics, had done some "soul searching." After a dozen years of funding middle school education around the country—as well as other disparate areas—the $700 million foundation would now fund in only one area: after-school youth development programs in Boston and New York.

Trying to change "huge, complex, entrenched, multibillion-dollar public systems" with a staff of 25 and grants of $25 million a year, he said, had embroiled them for too long in a losing "battle of Homeric proportions fought with Lilliputian resources."

From now on, the foundation would look to fund grantees who were already demonstrating that they could produce measurable results and were willing to employ effective business practices.

Asking Tough Questions

Foundations donated more than $1.2 billion to K-12 education, according to the Foundation Center's most recent annual figure. Businesses contributed another $2.4 billion through school-business partnerships, estimates the Council for Corporate and School Partnerships (though this includes commercial agreements, such as soft drink contracts).

"Are any of these investments to improve schools really making a difference?" is a question Bill Porter hears a lot. As executive director of Grantmakers for Education, a national network of about 200 foundations and corporate-giving programs, he sees the revolution in philanthropy from the inside.

"Since A Nation at Risk came out and, certainly, in the last 10 years there has been this incredible focus on improving schools," he says, speaking from his small office in the beaux arts Morgan Building in downtown Portland. "[But] is it changing quickly enough? Are folks—either the business community, elected officials, parents—going to throw up their arms in disgust or despair before we can get it all figured out?

"Certainly, in the world of philanthropy, there have been a number of high-profile private foundations ... that have given up. They've said, 'We tried investing in K-12 education, and we just don't feel like our investments are making enough of a difference.'"

Nevertheless, says Porter, "the trend isn't that more foundations and companies are getting out of education —in fact, the opposite is true—but [that they are] seeking ways to be more effective and leverage greater change with their comparatively small investments."

Those that are staying the course are increasingly more strategic in who and what they fund, and more rigorous in measuring the results of their investments, he says.

"Some foundations are asking tougher questions about, 'How do we know that any of our grantmaking has made a difference?' I know a number of foundations are really trying to think a lot more deeply and be a lot harder on themselves and their grantees" to be more explicit in determining what they've actually accomplished. Measuring progress and outcomes, a standard in the business world, are concepts familiar to many private foundations, created as they often are by people who made fortunes in business. Of course, that goes for corporate giving programs as well.

Such business points of view can be particularly valuable to education, says Porter.

"Business people can often bring some perspective from their own experience about organizational change and accountability, which I think is really useful in today's context," he says. "I do think that, often, those from the outside can sometimes see what needs to change more clearly than those from the inside. So, I do think there is a role of 'critical friend' that business can play."

For the Wrong Reasons

There is an important distinction that must be made when considering business involvement in education, says Paul T. Hill, director of the Center on Reinventing Public Education at the University of Washington.

"'Business' is a very large category," he says. There are businesses that simply want to market their wares to a captive audience of impressionable students, and there are those that want to influence education policy.

"There are people who are just outraged by the idea that business has anything to do with education. I don't share that [view], but I do think it makes sense just to call education a "consumerism-free zone."

Naturally, not all business overtures are in the best interest of students, says Porter, but when public funding for education erodes as it has, schools desperate for cash will sometimes agree to bad partnerships.

A poor business partner is one that is only interested in advancing a company's "branding" or community relations agenda, says Porter—self-interests that have nothing to do with education reform.

Yet, Alfie Kohn writes in his book, Education, Inc., that businesses commercialize schools whether they're placing advertising on school buses or supporting reform. Supporting reform is just "a more indirect way of turning learning into a business," he says:

When corporations can influence the nature of curriculum and the philosophy of education, then they have succeeded in doing something more profound, and possibly more enduring, than merely improving their results on this quarter's balance sheet. ... [It] can happen when a business ethos takes over education, with an emphasis on quantifiable results, standardized procedures to improve performance, order and discipline and obedience to authority.

John Olson is an emeritus professor of education at Queens University in Ontario, Canada. He contributed the essay, "Do Not Use as Directed: Corporate Materials in the Schools" in Kohn's book. Olson cautions teachers to be skeptical of corporate-sponsored curricula and supplementary materials, even when they've been developed with input from educators. State agencies and teacher groups sometimes help develop business-sponsored teaching materials, he says, and this gives them "an aura of legitimacy, making it easier to use them, perhaps less critically than were they not endorsed."

He continues: "[The] corporation has a vested interest in the way you think about the subject matter of the materials. ... In the end, it is the teacher who renders materials truly educational by making them serve educational purposes—the cultivation of critical awareness and independence of mind."

Alex Molnar, professor of education policy studies and director of the Commercialism in Education Research Unit at Arizona State University, has been tracking commercial activities in schools for 13 years. "Corporate links to schools usually carry the gloss of charity, a gloss that tends to obscure just what corporations get out of those connections," he wrote in the center's most recent study, "No Student Left Unsold: The Sixth Annual Report on Schoolhouse Commercialism Trends 2002-2003."

Like Water to a Fish

But objecting to business involvement in education "is like objecting to water if you're a fish—I mean, it's there," says Hill.

And it's pretty much always been there, he says.

"In the 20th century, there was an effort to move education out of politics and make it an autonomous professional structure, and educators got to thinking of themselves as holding the trust that was theirs alone," he says. That view, however, "started to erode pretty rapidly after [the 1954 Supreme Court ruling in] Brown v. Board of Education, when education was seen as being a product of politics, subject to federal funding and to requirements that came out of legislators', not out of educators', decisionmaking."

Furthermore, at least since 1983 when A Nation at Risk was published by the National Commission on Excellence in Education, the health of the U.S. economy has been inextricably linked to the state of public education.

"It's still true that one reason we do public education is to maintain a modern economy," says Hill, "and part of that means that you have to create the skills that are needed in the economy. I disagree with my education colleagues who think that business's engagement in education is illegitimate. I think it's necessary. Business has more than a right, it has an obligation to say: 'What is it going to take [from] the education system for people ... to be employable?'"

Business has an important role to play as supporter and partner of education, he says. In Seattle, for example, business contributed $5 million last year to the city's public schools, which serve 50,000 students. "We're talking about $1,000 a student coming from business, which is 16 percent in addition to our public spending," Hill notes. "That's pretty significant [for] schools that would have a heck of a time coping without that. People start to worry about the quid pro quo implied by it, but I don't think anybody denies the legitimacy of and need for their philanthropy."

Karen Phillips was director of secondary programs for North Clackamas School District in Oregon until last fall when she went to work for Employers for Education Excellence (E3). She joined E3 to direct the Oregon Small Schools Initiative, a project of the Bill & Melinda Gates Foundation and Meyer Memorial Trust.

"In the initial school-to-career movement, 1995 to 1996, there was a real fear that what business involvement meant was business was going to come into the schools and tell us what we should do—without understanding what education is, or how it should be done—and that what they wanted was for us to create worker bees," Phillips recalls. "When schools manage to get past that and actually sit down with the business partner, what they discover is that the business partner doesn't come in believing they know everything there is about education. But they do have a vested interest and passion about how we educate the next generation. They may be able to look at the world issues and the community with a different view than the school, which could help [the school] see challenges or resources that they may not have seen [otherwise]."

Stefni Stephens is a teacher at Mountain View Elementary School in Corvallis, Oregon. She recently took part in a free technology training session offered by Intel Corporation. "I think we have to be careful about mixing business and public schools," says Stephens. "I think it is a sad situation when schools are forced into serving soda pop in their schools because it brings in badly needed income. The strength of public school is [its] effort to stay neutral, to teach all kids from multiple points of view. If there are large amounts of funding from business that sways that point of view too far one way or the other, then I think we are losing an important aspect of our free, public education system.

"But I also think that having business support us in small ways is very important and can actually help kids learn that there are different points of view." She points to the free teacher training and products provided by Intel Corporation. "It seems to me that they have made professional development available, but they are not asking that all our computers have 'Intel' inside. So we have an opportunity to learn and grow and be better at using the technology that is available without feeling that we have lost some freedom of choice because of it."

The Business of Reform

At least since the first National Education Summit in 1989, businesses have been central to education reform, both in defining public discourse and formulating reform measures, says Roslyn Arlin Mickelson of University of North Carolina at Charlotte.

For the Teachers College Record (Spring 1999), Mickelson wrote the article, "International Business Machinations: A Case Study of Corporate Involvement in Local Education Reform." In it, she evaluates two reform initiatives sponsored by IBM in Charlotte, North Carolina, and offers her insights into the potential benefits and pitfalls of business involvement in education.

The high profile of corporate leaders helped place school reform on the public agenda and philanthropic support has "without question ... been critical both for stimulating reforms and in financing them across the nation," she writes. However, she cautions, "Each corporate initiative, program, or donation plots along continua of philanthropic altruism and strategic self-interest, latent and manifest consequences, and dangers and benefits to schools and communities."

While Mickelson noted that evaluation studies of corporate-sponsored programs were rare at the time of her writing in 1999, five years later, it seems that evaluation is increasingly a central component of foundation and corporate education programs. Some are making these studies available publicly, contributing to the body of education research into such things as small schools and classroom technology.

The Bill & Melinda Gates Foundation routinely evaluates its programs and requires grantees to do the same. Since launching its national Small Schools Initiative in 2000, it has hired the American Institutes for Research and SRI International to do annual evaluations of the program.

The Business Roundtable, a group of corporate leaders from around the country, hired Paul T. Hill, who was then at the RAND Corporation, to evaluate its 10-year agenda to get standards-based reform laws enacted in states around the country. Later, when Hill became director of the Center on Reinventing Public Education, the Washington state affiliate of the Business Roundtable—Partnership for Learning—hired him to evaluate Washington's standards reform. Hill says those studies showed that business influence was "fundamental" to getting education reform laws passed.

Toward a Higher Purpose

When one looks back at America's history of philanthropy to schools, what's clear is that wielding influence for the greater good is fundamental to building a world-class education system.

"At the heart of good philanthropy in education (as elsewhere) lies not just a sense of good policy and practice, but also a social and moral vision," conclude Leslie Lenkowsky and Emily Spencer in their paper, "Philanthropy and Schools in American History: Donations for Education and the Education of Donors.

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