Philanthropy Roundtable’s Free to Give campaign elevates the voices of everyday Americans who have dedicated their careers to supporting those in need. Their work is made possible by the freedom of all Americans to give to the causes and communities they care about most.
“I don’t see how we solve the K-12 education crisis without philanthropy. Higher-income families have options, but who speaks for the kids who don’t? That’s where philanthropy plays such an important role,” said Dan Peters, president of the Lovett and Ruth Peters Foundation, which focuses on the importance of parental choice in K-12 education through their policy work. The Lovett and Ruth Peters Foundation is based in Cincinnati, Ohio.
In a recent conversation with the Roundtable, Peters discusses how his parents’ donor intent has shaped the foundation’s priorities in K-12 education. He also addresses several challenges to philanthropic freedom including threats to donor privacy and the negative impact of bureaucratic regulations on nonprofits and their ability to help people in need.
The following interview has been edited for length and clarity.
Q: Tell us about yourself and the funding priorities of the Peters Foundation?
Peters: The Lovett and Ruth Peters Foundation funds K-12 education reform nationwide. We firmly believe that parents have the right to choose the best school for their child. No one school works well for every child just as no one restaurant works well for everyone. Dinner for a wedding anniversary hopefully looks different than feeding kids after a soccer game. What works well for one child may not work well for another – even within the same family.
We all know wealthier families have more choices – they can move to the suburbs, go to a private school or live in a neighborhood with great public schools. However, as one drops down the economic ladder, there are fewer school options available. That’s wrong. Our foundation focuses on expanding school choice for everyone, regardless of their income or where they live.
Q: How can philanthropy be a part of the K-12 solution in a policy sense?
Peters: There are approximately 50 million K-12 students in the United States. We need education models which allow scale. That’s why we’ve concentrated on policy work where systemic change can have a broader impact. Take Ohio for example. Thanks to vouchers, families now have real choices on where they send their kids to school. Here’s an example. I’m on the board of two inner-city Catholic schools in Cincinnati. Five years ago those schools were slated for closure. Thanks to vouchers, today we now have 370 students. Thanks to vouchers, those kids had a choice. And stepping back to look at the bigger picture, it’s a change in policy which explains why more than 150,000 Ohio kids are using vouchers today.
Unfortunately, the current system can not reform itself. And let’s be clear – there are countless wonderful teachers, coaches and leaders in the public system. The problem is they’re operating under a system designed for the benefit of the adults, not for the kids. Take Cincinnati for example, where a former superintendent, widely seen as highly capable, was fired due to union pressure. This kind of dysfunction hurts the students who need help the most. As mentioned earlier, higher-income families have options; they’ll find a way. But who speaks for the kids who don’t? That’s where philanthropy can make a difference.
Q: How would more stringent IRS regulations on nonprofits affect the charitable sector?
Peters: The real question is: What problem are we trying to solve? If fraud or misusing foundation funds are the issue, enforce existing laws. More regulations don’t necessarily add value—they only burden organizations, especially smaller ones, with additional paperwork and legal costs. Instead of layering on more rules, we should focus on enforcing laws that already exist. Before adding new regulations, we need to be clear on what exactly we’re trying to protect and whether the solution actually addresses the problem.
Every hour spent on compliance is an hour not spent helping communities. Regulations disproportionately benefit large charitable organizations which can absorb the costs while hurting smaller ones that have fewer resources.
The Roundtable was deeply involved in the Sarbanes-Oxley debate over nonprofits in the early 2000s. While it wasn’t officially called Sarbanes-Oxley, the effort aimed to apply the same regulatory mindset to the nonprofit sector. One proposal considered requiring all nonprofits except schools, churches and synagogues to submit detailed financial and operational reports to the IRS every five years to maintain their tax exempt status. The unintended consequences are too numerous to mention here.
Q: How does taxing nonprofits affect your foundation?
Peters: For our foundation, it’s basic math. We have a set amount of funds and plan to sunset in about five years. The more tax we pay, the less we have to give away.
Q: How have you seen the impact of the Peters Foundation in Cincinnati?
Peters: Making a difference in the lives of children is deeply personal. If a child isn’t reading proficiently by third grade, the challenges only grow from there. As a society, we’re facing a literacy crisis that we can’t ignore. Simply pushing students forward and hoping for the best isn’t a solution. We must address the issue head-on.
I recently saw this firsthand with a young girl who came to one of our schools unable to read – literally. In less than a year she was reading at the 30th percentile. It’s not where she needs to be, but the school has made a fundamental difference in her life. I’m blessed to work with such wonderful people making a difference in the lives of others.
Q: How does donor intent steer the foundation’s giving initiatives?
Peters: I was fortunate to have two extraordinary parents. One of my better decisions in life was leaving Procter & Gamble to work alongside my parents at the foundation while they were still alive. I’ve always been close to them so this was a special opportunity.
In setting up the foundation, my father established a clear set of guiding principles for our foundation, including a wonderful mission statement on donor intent. It’s simple – just one page – but incredibly effective. I’d be happy to share it with anyone interested.
Of note, our foundation was designed to sunset so in approximately five years we’ll close the doors. That’s allowed us to give away more funds now and avoid the uncertainties of a succession plan down the road. Sunsetting has made life dramatically easier for our foundation.
Q: How about your parents’ values and their intent on the foundation?
Peters: My dad was the only one in our family who wasn’t an educator – education was in our DNA on both sides of the family. My grandparents, aunts, uncles and cousins devoted their lives to teaching in some way. My parents firmly believed that education is the key to unlocking more choices and opportunities in life.
When my father died, I wrote in his obituary that he died believing he had won the greatest lottery of all mankind – he was born an American. His family wasn’t wealthy, but he received an excellent education, worked hard and built a successful life. That experience shaped his and my mother’s vision for philanthropy.
There are many worthy causes – health care, the environment and countless others. But they chose to focus on education because they believed it had the greatest power to transform lives. That’s where they wanted to make a difference.
