Frank Hanna III is CEO of HBR Capital, Ltd., a merchant banking firm. With a strong interest in education, he has helped found three schools in Atlanta and has served on the Archdiocese of Atlanta’s education task force. A frequent speaker on issues of faith as they pertain to business practices, he is active in efforts that serve children and the poor. A graduate of the University of Georgia’s business college in 1983 and law school in 1986, Hanna was a Truman Scholar and a National Merit Scholar. He has also co-chaired the President’s Commission on Educational Excellence for Hispanic Americans.
PHILANTHROPY: How did you become interested in education?
MR. HANNA: I first became interested in education when I was in college, around the time the famous “Nation at Risk” report came out, detailing the sad state of America’s public schools. I thought if you want to change society, you have to change the culture. And if you want to change the culture, the most leveraged point is K-12 education.
So as an undergrad and later in law school, I studied the problem of delivering quality K-12 education and put together a rough business plan for launching a system of K-12 schools. I soon saw that the capital required was far greater than I had originally anticipated. I decided to keep my finger on the pulse of education but try to create some capital first. This led me into my business career, which is what I still do most of the time—merchant banking in the financial services arena.
For the last 15 years, I’ve been involved with Catholic education and also with public school reform, through both the charter school and school choice movements. In Atlanta I’ve helped launch three Catholic schools; one was launched as an independent school, one is affiliated with a religious order, and another is a Catholic independent school for Hispanic immigrants in a low-income neighborhood.
PHILANTHROPY: What lessons have you learned from your work with those three schools?
MR. HANNA: I have learned two primary lessons: first, K-12 private education is an incredibly difficult undertaking; in the end, you are forming human beings, and human beings are the most complex organism that exists. Second, despite its difficulty, there is no more noble or rewarding an endeavor, for human beings are not only complex, but each one is of infinite worth.
PHILANTHROPY: Are Catholic schools in crisis?
MR. HANNA: Private schools, particularly Catholic ones, face an enormous financial challenge. The crisis of so many Catholic schools closing in cities like New York and Detroit is potentially just the tip of the iceberg. The average Catholic school today does not have a viable economic model. That explains the closings but also what I see as the deepest crisis in Catholic schools, namely, all the Catholic schools not being built in the first place. In Atlanta, Phoenix, Denver, and numerous other places where the Catholic population and the general population are exploding, we see some new schools being formed, but not near what one would expect.
PHILANTHROPY: Why did Catholic schools work economically in the past, but not now?
MR. HANNA: There are several issues. First, 80 years ago the average American Catholic was a poor immigrant whose expectations for the material trappings of education were much lower. It was understood that a Catholic school might be run in the basement of the church, with 40 or 50 kids in a classroom. Today, Catholics who can afford the tuition have standards influenced by the impressive money they see spent in the public schools, despite the fact that those material trappings do not seem to have produced higher academic achievement.
Further, Catholic schools are expected to approximate the relatively generous salaries paid to public school teachers. Related to this is another change: the loss of so many priests, brothers, and nuns who 80 years ago were working in the schools for very low salaries. Now over 90 percent of the instructors in most Catholic schools are lay people.
Another problem is today’s far more transient population, which erodes the old understanding that used to exist between a parish’s older and younger generations. The older generation didn’t have children at the school, but didn’t mind a generous parish subsidy to it, because they and their children had been educated there, and they expected their grandchildren to attend. These days the children and grandchildren often live in different states, which means the intergenerational subsidy that will be tolerated has decreased.
Yet another challenge: as Catholics move up the socioeconomic ladder, many start to send their children to elite non-Catholic schools, which drains potential support away. Also, Catholic schools have traditionally not had endowments, which further weakens them compared to older private schools.
PHILANTHROPY: What can donors do?
MR. HANNA: I think two areas must be worked on; one involves finances and one involves marketing. On the marketing side, we must emphasize the benefits of Catholic schooling for all, not just those in the inner city. We hear a lot about urban schools that do a wonderful job of educating poor kids, many of them non-Catholics, and do it on a shoestring. That’s very important; in fact, it is crucial.
But what’s also important are the kids in the suburbs who aren’t going to a Catholic school. They’re in middle-class families who might like the choice of a Catholic education but don’t qualify for free tuition and can’t easily afford a tuition of, say, $7,000 or $8,000 a year. Their suburban public schools appear to be decent, and so their kids go there.
Catholic schools should not be seen merely as a refuge of discipline and order in the inner city. They are that, but they are more. Catholic schools are engaged, not only in imparting knowledge, but in forming character. That is their essence, and suburban kids need this character formation just as much as inner-city kids. True, suburban kids may have more parental involvement in their character formation, but they also spend eight hours a day in school, often in a governmental system that has, to put it gently, serious restrictions on the ways it can form character.
Many parents become satisfied with the minimum level of so-called “character education” provided to their children in public schools. But over time, these superficial programs do little to prepare the teenage student with the inner strength and desire to seek the truth in a culture that is usually relativist. Once behavior problems arise in late middle school or high school, parents who were once satisfied with the minimal “character education” that was provided sense they have made a mistake, but often rationalize it away, blaming the problem on society at large.
The second area we’ve got to address is the financial. Unfortunately, Catholics have historically given less to their church than many other American church-goers, something George Weigel noted in your last issue. But a big part of the financial problem is the ever increasing amount of everyone’s tax money spent on public education without giving parents a choice about the school that is best for their own children.
Critics of public schools tend to object that much of this money is wasted on unproductive schools, but we should object just as much to the double burden put on private schools, which not only have to try to keep up with public school salaries and amenities but also are trying to persuade parents, who already pay heavy taxes to support public schools, to turn around and pay yet again for schooling. That’s a fundamental unfairness, and donors who want to increase the availability of high-quality education must push for expanded school choice.
PHILANTHROPY: Catholic schools come in several different types: those run by the local diocese, by religious orders, and so-called “independent” Catholic schools. Do the differences matter?
MR. HANNA: Not in terms of the mission they are called to fulfill. I’d love to see more of all three types. The issue is where will the money come from? Occasionally a school will find one or a few benefactors who’ll shoulder the big weight of financing, but that requires a lot of serendipity. To start a school from scratch, with no facilities, you must corral benefactors willing to give away as much as several million to start even a K-5 school. People willing to make such gifts overwhelmingly tend to give instead to college endowments, which already have millions of dollars.
PHILANTHROPY: Are there existing models of Catholic schooling donors should learn from? Say, Peter Flanigan’s Student Sponsor Partners in New York City, the Jubilee Schools in Memphis, or the Cristo Rey and Nativity Prep networks?
MR. HANNA: The Cristo Rey schools have received much publicity, and I think it’s wonderful when the Church educates the poor. First, it’s a beautiful work of charity and corporal mercy; second, society as a whole benefits from the education of these children. But let’s not forget the benefits that can come from giving middle-class kids a Catholic education.
I’ve read about Peter Flanigan’s work in your new guidebook on how donors can support school choice, and it’s great to see such efforts. I am hopeful that dedicated individuals around this country will continue to put their own money and energy into Catholic schools and succeed, because it’s not an impossible undertaking.
The question is what can be done systematically to set up programs that can be replicated without requiring someone of the stature of a Peter Flanigan? Similarly, I ask myself, does what we have done in Atlanta work elsewhere? Sure, if you’ve got someone who’ll put the time and money in. But I don’t hold out what we’ve done as a model yet, because a model needs to be replicable without all the time, money, and effort that I and others have put in.
That’s why the school choice movement is critical. And the second critical need, which I believe we can achieve, is to market Catholic education so that it receives more institutional buy-in from upper-middle and upper-class people, who these days often see Catholic schools as only inner-city projects.
PHILANTHROPY: Some scholars argue that the greatest giving by Catholics in America has been giving up their sons and daughters to the Church’s service.
MR. HANNA: I absolutely agree. And one systematic way to address the crisis in Catholic schooling is to encourage vocations to the religious life, but that takes a generation. I see some hopeful signs, but Catholics should remember that the Second Vatican Council enthusiastically encouraged lay involvement in the church’s mission.
The church is not just about priests and religious brothers and sisters. It’s also about lay people answering the call. I see encouraging signs of lay people being called, and in the long term I am hopeful. In the Atlanta schools we see young men and women who could make more money in another endeavor say, “No, this is part of my calling.”
But it is incumbent on us to continue to experiment with financial solutions. Even lay people who have a calling to teach and are willing to make sacrifices still have to support families.
PHILANTHROPY: “School choice” can involve many things—charter schools, private scholarships, government vouchers, tax credits, etc. What roles would you like the different parts to play?
MR. HANNA: I like tax credits and vouchers best, but all these options move the ball down the field. Some recent U.S. Supreme Court decisions have been heartening. State laws are also important, especially anti-Catholic “Blaine Amendments” to state constitutions that discriminate against efforts to provide educational options for all.
None of the school choice methods cures all ills, but if every parent had the right to a full tax credit —not just a deduction—it would help enormously. If every parent had a voucher worth up to $10,000 in tuition, that would be ideal. I’m glad the Roundtable has been instrumental in encouraging the work going on around the country.
We must realize that better schools aren’t just an inner-city issue. Columbine High School, where those boys went on a shooting spree, was not inner city. This issue is about parents’ ability to choose how and where their children’s character is formed. We won’t win the battle until we realize this issue cuts across the economic spectrum. I think right now there’s some delusion among the middle and upper-middle class that their own government school does just fine. It’s like Congress: Everybody thinks Congress is bad, but his own Congressman is fine. If people admit something is wrong with the local school, then they have to ask, “Uh-oh! Do I leave this nice suburb? Do I give up the summer vacation so that we can afford private school tuition?” It’s tempting to rationalize and say, “I don’t know. I think the public school is doing a pretty good job.”
That’s where marketing comes in. We have to say to the middle-class family, “Yes, you’ll probably have to take a cheaper vacation, and you can’t afford the boat, but it’s worth it to send your kids to a school where they’re getting the right kind of character formation.” Pope John Paul II said there is no greater investment we can make than to invest in the education of our children through Catholic schools.