In February, New York City’s Bill de Blasio administration announced a goal of raising $200 million in charitable contributions from companies, individuals, and foundations to subsidize the city’s 328 public-housing projects. Wherever government is the landlord, you will usually find crime, rundown facilities, joblessness, and financial shortfalls—and all of that is present in New York. The proposed donated money would go toward backlogged maintenance and chronic operating deficits at the housing authority, which is in deep fiscal crisis after years of annual losses.
What was perhaps even more plucky than de Blasio asking donors to bail out a dysfunctional government agency was the supportive rationale offered by the New York Times in its story announcing the initiative. The Times reporter chirped that “there are certainly precedents for private donations to public entities: The private, nonprofit Central Park Conservancy was founded in 1980, when the city’s maintenance budget fell woefully short…. In more recent years, charter schools have turned to philanthropists to raise money.”
What this curious bit of history-spinning ignores is that both of those infusions of private money into public sectors were accompanied by simultaneous transfers of decision-making, management, and control to private actors. In return for financial support, the Central Park Conservancy got a long-term contract with the city giving it authority to run the facility in its own, completely different, way. And the public responded—attendance has increased from 12 million annual visitors when the city was in charge to more than 40 million per year now.
Charter schools are an even stronger example of this same transition. They are privately managed, generally acquire their own buildings, choose their own staff and curricula, and set all of their own operating procedures—free of district nostrums. The crucial insight of both school chartering and the widely copied deal that shifted Central Park to a nonprofit operator was that you don’t just throw private money at a problem the government has fumbled, you inject private management.
If the de Blasio administration really wants to solve the financial and quality-of-life disasters of housing projects, it need only study the bold governance reforms that transformed two previous state-run messes, schools and parks, into smashing successes. But of course, it’s doing the opposite—trying to undo both charter-school independence and the integrity of the private conservancies operating city parks. So good luck with that $200 million.