At a recent San Francisco conference, The Philanthropy Roundtable honored two outstanding donors for their excellence in K-12 philanthropy. Eli Broad, founder of the Broad Foundation, and William Oberndorf, co-founder of the American Education Reform Foundation. Edited versions of their remarks to the 100 attending donors follow.
Remarks by Eli Broad
I believe public education is the key civil rights issue of the twenty-first century. Our nation’s knowledge-based economy demands that we provide all children with the education to become knowledge workers, or we run the risk of increasing the gap between the middle class and the poor, which would threaten our democracy, our society, and our economic future.
Among those of us not satisfied with the quality of K-12 education, there are three schools of thought. The first group advocates vouchers and believes market forces will cure all ills. I realize it may not be a popular opinion in this room, but I oppose the large-scale use of publicly funded vouchers because I believe they are of limited use. You couldn’t possibly find the number of seats needed to serve the number of children we have in inner-city public schools.
The second group believes in competition. I agree that charter schools, private schools, parochial schools, and opportunity scholarships all provide healthy competition to our K-12 public school system. The Broad Foundation is a strong supporter of Aspire Public Schools here in Northern California because they have a proven track record of successfully opening and operating high-performing charter schools. (Compare the case of higher education: Healthy competition has raised its quality to the point that U.S. higher education is believed to lead the world. No one says our higher education is a tired government monopoly.)
I support many forms of public school competition, but I believe these programs simply cannot grow at the pace and scale necessary to meet the needs of children in the twenty-first century. By the end of this decade, over 80 percent of children in America will continue to be educated in public schools. Therefore, where I come out is in line with the third school of thought–that we must focus our attention and resources on reforming and reinvigorating the public school system itself.
Some of my friends tell me that I’m wasting my money, that no amount of time or money will reform K-12 public education. They point out that competition is the best–some say the only–option for curing our ailing schools.
But there are no silver bullets in public education reform. As long-established institutions, public schools are often reluctant to take risks that will bring about real change. That’s where the Broad Foundation comes in. We’re willing to take the much-needed risks, support new ideas, and showcase success wherever we find it in order to stimulate change.
We decided to concentrate our efforts in areas no one else has focused on. The Broad Foundation’s mission is to dramatically improve K-12 urban public education through better governance, management, and labor relations.
We focus on district-level investments because after studying K-12 public education, I am convinced change starts at the top. I believe the infusion of a new generation of leadership from outside the overly bureaucratic environment of public schools will bring marked improvement in student achievement. A talented CEO and senior management team can make a profound difference in turning a school system from a lackluster bureaucracy into a high-performing public enterprise.
We were inspired to create the Broad Center for Superintendents after seeing the success of non-traditional superintendents like General Stanford in Seattle, Paul Vallas in Chicago and now Philadelphia, Alan Bersin in San Diego, Roy Romer in Los Angeles, and more recently Joel Klein in New York City. The Center aims to recruit and train more leaders like these. We are responding to the fact that 98 percent of superintendents are trained as teachers–not managers and not leaders—and typically have little background in complex financial, labor relations, systems management, personnel and capital resource decision-making.
The Broad Center differs from any other program because we don’t just wait for applicants. We aggressively recruit the best people available from both the public and private sectors to prepare for this critical role. And we have a curriculum based upon what the practicing CEOs and leading-edge research told us was needed.
Last November, 23 accomplished professionals completed the first year of this program. When we started, our goal was to place Fellows into CEO or other senior executive positions in urban school systems 18-30 months after graduation. The first group of Fellows is already outpacing that goal. One-third of the Academy’s pioneer class have already taken their next career steps. Two Broad Fellows have been appointed as superintendents in large urban districts. An additional six members of the class–including three non-traditional Fellows with significant experience outside of education–have been selected as superintendents in smaller districts or have been promoted or hired into senior executive roles in large urban systems.
In addition to recruiting more talented individuals to work in public education, we also want to shine a bright light on what we know is working. We created the $1 million Broad Prize for Urban Education to honor urban school districts that have made the greatest overall improvement in student achievement while at the same time closing the achievement gap across ethnic groups and between high- and low-income students. The Prize is designed to
• Regain the American public’s confidence in public schools by spotlighting a district that is making significant gains in student achievement.
• Create an incentive to dramatically increase student achievement in our nation’s urban school districts.
• Reward public school systems that are successfully using creative, results-oriented approaches to better educate children.
We also found that school boards are too often focused on personnel and curriculum and not on what we believe the primary business of a school board is—increasing student achievement and closing the achievement gap. And so we created the Broad Institute for School Boards as an annual training program for newly elected school board members. The first Institute met last summer, and 23 newly elected and appointed school board members were trained by a distinguished faculty that included U.S. Secretary of Education Rod Paige.
I recognize many of you are taking different steps to improve our nation’s public schools, but we all share the same basic commitment to increasing student achievement, which must dramatically improve soon or we risk losing another generation of children. I encourage you to join with me in several ways:
• One, recruit competent people with experience in governance to serve on local school boards.
• Two, urge people from the business and professional community you believe have the ability to manage an urban school district to apply for a fellowship with the Broad Center for Superintendents.
• Three, promote innovative projects in urban areas that show promise. We welcome the opportunity to partner with you, particularly in areas such as principal training and pay for performance.
The challenge is great and time is of the essence. Thank you for this honor and for all that each of you do to improve pubic education.
Remarks by William E. Oberndorf
It seems a great injustice to me that only certain members of society–determined primarily by their economic status–are able to choose schools of quality for their children, while others–primarily the urban poor–are forced to send their children to schools that all too frequently destine them to lives of failure. And so in 1993 I helped establish the American Education Reform Foundation, which I chair. Its purpose is to promote, through legislative action, the granting of publicly funded scholarships that will allow primarily low-income parents to opt out of the public school system if it is not working for their children.
America is now behind virtually every developed country in science, math, and other core competencies. During the last two decades, all sorts of well-intentioned people like you and me have spent literally hundreds of millions of our philanthropic dollars to address this problem. And despite all our good intentions, we have not been able to improve educational outcomes in any meaningful, measurable way.
A survey of recent high school graduation rates across the country found only 51 percent of high school students graduated in Newark, 47 percent in Chicago, 43 percent in Milwaukee and Oakland, and 28 percent in Cleveland. While some are quick to claim the culprits are large class sizes and a lack of financial resources, in reality we are spending, on a per pupil basis, amounts in these cities ranging from $7,600 in Oakland to an astounding $14,900 in Newark.
By the time I became involved in the education reform movement, a growing group of individuals, including myself, had become convinced that unless a truly competitive alternative was established to traditional public schools, the educational establishment was simply incapable of systemic and sustainable reform from within. I focus upon the words systemic and sustainable because, unless we spend our philanthropic dollars in a way that is systemic—i.e., having broad impact—and in a way that is sustainable—i.e., not requiring our continuing financial and political support—we are not going to move the needle of education reform in any significant way.
For the last ten years, the American Education Reform Foundation has worked to bring about systemic and sustainable reform by promoting broad-based parental choice that aids low-income families. I am pleased to report we now have programs in six states and legislation pending in several more. The largest and most successful of our programs is in Milwaukee, Wisconsin, which stands as the beacon for the rest of the country for several reasons:
• This year, students will receive vouchers worth about $5,800 or the actual cost per pupil, whichever is less. This amount compares to Milwaukee public school spending of nearly $10,000 per pupil.
• Currently, approximately 12,000 low-income children in Milwaukee receive publicly financed scholarships, and enrollment is increasing by approximately 1,500 per year. The program probably will reach its cap of 15,000 students in about two years as the number of seats increases. Today, fully 106 independent schools in Milwaukee participate in the program.
• Milwaukee also has 25 charter schools today. Only one existed when independent school choice became a reality in 1998.
• The scholarships in Milwaukee are high enough to permit private schools to expand to meet demand. This demand has produced over $60 million of private capital for new classrooms and schools in some of the city’s poorest neighborhoods.
• Finally, the Milwaukee program is large enough to produce a competitive response. It enrolls a significant percentage–currently about 12 percent and on its way to 15 percent–of the total students in Milwaukee public schools.
The results from the Milwaukee school choice program are extremely positive. Parents are highly satisfied and become more involved with their children’s education when they choose the school. Students in the program show significant gains in reading and math. The program is drawing private investment to schools in distressed neighborhoods.
Most importantly perhaps, the Milwaukee public school system is beginning to show statistically significant improvements that have not been attained elsewhere in the country. And the largest of these gains have occurred in schools with the greatest number of low-income students. Noted Harvard economist Caroline Hoxby recently wrote, “Overall, an evaluation of Milwaukee suggests that public schools have a strong, positive response to competition from vouchers.. . . Schools that faced the most potential competition from vouchers had the best productivity response.”
Here are some specific examples of how Milwaukee’s public school system has responded to competition from vouchers:
•hiring teachers through school selection committees and essentially ending teacher assignments based solely on seniority
•expanding school facilities and before- and after-school programs by coordinating efforts with community groups and private schools in some of the city’s poorest neighborhoods
•changing the way school budgets are developed so dollars follow students to the schools they choose, forcing schools to recruit students to strengthen their budget
As philanthropists, you may ask what has all this cost to achieve? The Bradley Foundation spent more than $12 million to support the Milwaukee private scholarship program that demonstrated the strong demand for parental choice, to defend the program in court, and to back critical research. In addition, the Milwaukee business community has raised nearly $1 million to advocate for the program and defend it. Thus, for about $13 million we have created a recurring income stream of $68 million, which requires approximately $750,000 to $1 million of annual expenditures to sustain. For this we will educate approximately 12,000 students at a cost of $5,800 per year versus the per pupil public school cost of $10,000 per year. This results in an expenditure differential of $4,200 per student, or over $50 million which can be used to improve educational outcomes for those students who remain in the public schools.
In short, this program has so far resulted in the participation of over 100 independent schools in some of Milwaukee’s most dilapidated neighborhoods, the creation of 24 charter schools, and a significant improvement in Milwaukee’s public schools. As a philanthropist, I cannot find a greater return on my philanthropic dollars than what my wife and I have achieved by investing in programs of this sort.
Eli Broad is founder of the Broad Foundation and chairman of SunAmerica, Inc. He is also a member of the board of trustees of the California Institute of Technology.
William E. Oberndorf is managing director with SPO Partners & Company in San Francisco. He co-founded American Education Reform Foundation and serves as its chairman.