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More private money entering public schools

Philanthropists are funneling big money into public education. Are they too powerful? Here, U.S. Secretary of Education Arne Duncan, Penny Pritzker, member of the President's Economic Recovery Advisory Board, and Melinda Gates, co-founder and co-chair of the Bill and Melinda Gates Foundation -- all key leaders in education.

Jennifer Green (left) and Christina Hall, co-founders of Urban Teacher Center in Baltimore. The startup has received about $1.4 million from the Gates Foundation, through the New Schools Venture Fund.

Tess Vigeland: For the rest of the hour, on this holiday weekend, we're going to feature stories about giving. How are Americans thinking about philanthropy in a troubled economy? Here are some answers from around the country.

Man 1: I plan to maybe cut just about 10 percent of my charitable givings this year.

Woman 1: If anything, we've given more.

Man 2: Certainly, as much as we've given in the past and maybe a touch more, because the economy is tough and tougher times these days.

Woman 2: Cat and dog food for an animal shelter and we plan on probably donating toys for Toys for Tots.

Man 3: I'm giving away more things than I am cash, and that's partly the economy.

Woman 3: What I can give as far as monetary has shifted. However, I believe there's plenty of ways we can give that don't include money.

Man 4: There's actually nothing to give. Just makin' ends meet.

Man 5: There's only x amount of dollars available to anyone and one has to make a choice. And my choice is to give help to those closest to me first.

Woman 4: As a teacher, I know I'm not the tallest person on the totem pole that has a lot of money to give. But I have been blessed, so I think it's a blessing to give to others

Man 6: We have an automatic contribution program at our work. So I do donate through that throughout the year.

Woman 5: I haven't really thought about giving anything this year. Now I put the thought into my head, so maybe I should consider looking for something to donate.

Woman 6: My donations are regular and modest, so the economy is not gonna really impact them.

Voices from New York, Connecticut, Florida, and Oregon.

Philanthropy on a large scale is usually accomplished through foundations and other non-profit groups. Donors choose a cause or mission and fund it accordingly. In this country, private money is having a growing influence on public education. Taxpayers spend about $600 billion a year on K-12 education. By comparison, philanthropists spend around four billion. A drop in the bucket right? But that four billion packs a powerful punch.

From the Marketplace Education Desk at WYPR in Baltimore, Amy Scott reports.


Amy Scott: On a winter day almost 100 years ago, Andrew Carnegie walked into Thomas Edison's recording studio in the Bronx and read from his essay "The Gospel of Wealth."

Andrew Carnegie: The man who dies thus rich, dies disgraced.

It was a plea to the rich to give their fortunes away to make society better. Carnegie spent much of his vast steel wealth building libraries and universities. Today a new crop of philanthropists is following his lead -- pouring hundreds of millions of dollars into public education through their foundations.

Bill Gates: We've made public schools our top priority in the United States.

That's Microsoft's Bill Gates.

Real estate tycoon Eli Broad and the heirs to the Wal-mart fortune have also made education a priority. And they aren't just spending money. They have an agenda.

The Walton Family Foundation favors school vouchers and charter schools. Broad's foundation teaches principals and superintendents to run schools like businesses. The Bill and Melinda Gates Foundation -- the biggest of the big -- wants to revamp the teaching profession and create more charter schools among other things.

Diane Ravitch is an education historian, who worked in the first Bush administration. She wrote the "Death and Life of the Great American School System." Ravitch says these billionaires have too much power.

Diane Ravitch: These days in education private funding is steering public policy. Public policy should be made through our democratic process. It shouldn't be determined because a foundation offers a large grant and says, "Do it my way."

Frederick Hess: Frankly, I think if private citizens and foundations want to put hundreds of millions, or billions of dollars to work, trying to improve schooling, we should probably regard this as a good thing.

Frederick Hess is director of education policy studies at the American Enterprise Institute, a conservative think tank. He says the latest brand of philanthropy is part of a long tradition, dating back to Carnegie and Rockefeller. It's just that nobody had a beef with building libraries.

Hess: What strikes me about this as really different is the fact that they're things that educators don't necessarily like.

Like trying to make it easier to fire ineffective teachers and evaluating teachers based on their students' standardized test scores. And they're not just funding individual schools and programs. Last year, the Gates Foundation spent $15 million to fund advocacy groups like the National Alliance for Public Charter Schools and policy researchers, like Rick Hess. It also gives grants to media organizations like NBC, NPR, and yes, Marketplace for education coverage.

Christina Hall: You can hear in the background, we're still getting the finishing touches put on.

At a renovated mill in Baltimore, Urban Teacher Center has just moved into a brand new office. The start-up has received more than a million dollars in Gates money over the past few years to train teachers to work in urban schools.

Jennifer Green is one of the founders.

Jennifer Green: At this economic moment in particular, the role of national philanthropists is especially essential, because they tend to be more risk tolerant in seeding important new ideas that otherwise would not get off the ground, but that are necessary.

But others worry the flow of private money into schools erodes the case for public funding. Michael Rebell directs the Campaign for Educational Equity at Teachers College in New York. He says when rich donors step in to fill gaps in education budgets, people stop demanding more of elected officials.

Michael Rebell: That's not the way we should be supporting our system of public education, to depend on outbursts of altruism from publicly spirited individuals. It's a public responsibility and it should be supported that way.

For the first time in generations, public spending on education per student has fallen in the past few years. Schools needing money will rely even more on the generosity of the people who have it.

I'm Amy Scott for Marketplace Money.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

Jennifer Green (left) and Christina Hall, co-founders of Urban Teacher Center in Baltimore. The startup has received about $1.4 million from the Gates Foundation, through the New Schools Venture Fund.

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