Making the case against power philanthropy

This is the second time I've posted excerpts from this 2013 article which originally appeared in Dissent Magazine.

Joanne Barkan is on the case of the new breed of muscle philanthropists who hide their obscene wealth in tax-sheltered foundations and use it to exercise unaccountable displays of power over public education and all aspects of public life. She makes the case that the super-rich don’t need billions of dollars in tax relief annually to exert their will in the public sphere.

Writes Barkan:

One hundred years later, big philanthropy still aims to solve the world’s problems—with foundation trustees deciding what is a problem and how to fix it. They may act with good intentions, but they define “good.” The arrangement remains thoroughly plutocratic: it is the exercise of wealth-derived power in the public sphere with minimal democratic controls and civic obligations.

Power philanthropists exercise greater control than ever over public ed. The Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation, and the Walton Family Foundation have taken the lead, but, says Barkan, other mega-foundations have joined in to underwrite the self-proclaimed “education reform movement.” Some of them are the Laura and John Arnold, Anschutz, Annie E. Casey, Michael and Susan Dell, William and Flora Hewlett, and Joyce foundations.

The so-called reforms include: privately-operated charter schools; "Parent Trigger" laws; using students’ scores on standardized tests to evaluate teachers and award bonuses; abolishing teacher tenure; and ending seniority as a criterion for salary increases, layoffs, and transfers.

Barkan proposes a list of reforms that would rein in the excesses of the giant foundations reduce their leverage in civil society and public policymaking while increasing government revenue.

Read her entire article, Plutocrats at Work: How Big Philanthropy Undermines Democracy, in the latest issue of Dissent.

Camp Philos at the Vineyard. My invite must have gotten lost in the mail.

Walton/Broad took their whole crew to Martha's Vineyard over the weekend to bone-up on marketing tactics for charter/privatization brand. How nice for them. What about me? I like the Vineyard.

Topics included: Doubling Down on Success or Losing It All: What’s At Stake in 2016;

How We Win: Strategies and Tactics to Combat an Organized and Vocal Opposition; 

What’s Next in the Edu Political Funding World?; and How to Tell the Pro-Reform Story Successfully.

The Philos "reform" crowd, mostly Clinton Democrats I'm told, includes the likes of -- Rahm Emanuel, Howard Fuller, Peter Cunningham, Gov. Andrew Cuomo, Senator Mary Landrieu, Eva Moskowitz, Charles Barone (DFER), Ben Austin (Parent Revolution), and so on.

Last year, Edushyster tried to go, but they wouldn't let her in. She obviously didn't have the proper security clearance. 

We hear a bunch of Chi electeds went to Martha's Vineyard this past wknd with @DFER_News. Check out their camp.... https://t.co/U3BmJxZcnO

— Raise Your Hand (@ILRaiseYourHand) October 20, 2015

Byrd-Bennett, 'a foot soldier in the march towards privatization'

Ian Belknap is a writer and performer living in Chicago. He hits the nail on the head with this opinion piece in Crain's, "Framing education as a business attracts the wrong people".

While the leading candidates in both parties spend their valuable debate time extolling the virtues of capitalism (...what built the greatest middle class in the history of the world.” -- Hillary Clinton), Belknap points out what should be obvious by now. The push towards privatization of public education has been a disaster.

What got him going was the indictment of Chicago schools CEO Barbara Byrd-Bennett.

Byrd-Bennett's woes are rooted in her greed, yes (and her tone deafness to irony—"tuition to pay and casinos to visit?"... But she has also acted as a foot soldier in the decades-long march toward privatization and misapplying the precepts of business to the complex (and in many cases generations-long) problems facing our schools.

Her downfall, writes Belknap,  "may be read as the logical extension, and, one hopes, the last gasp, of a badly flawed and shortsighted approach: namely the fallacy that business principles are well suited for every aspect of society".

It is past time we abandon the demonstrated failings of such an approach. It is past time we reconceive of jobs like Byrd-Bennett's as "CEO"—doing so focuses wrongly on the "outputs" of the system they're meant to preside over, rather than the contribution they may make to it during the time it is entrusted to them. In short, it is past time we as a society stop misapplying a business-style conception of risk and reward to education.

J.B. Pritzker and Goldman Sachs doing the special ed hustle

J.B. Pritzker

Goldman Sachs and J.B. Pritzker may call it "philanthropy" but it's a profitable brand that includes their benefiting financially from cuts in special ed and from every child who's dropped from or pushed out of a SpEd program.

It's all because of the latest corporate scheme in which private firms foot the initial bill for public services and then are repaid with interest if those services reduce the number of kids in special ed. They call it "social impact" investing.

In Utah for example, GS and J.B. have committed $7 million to area pay-for-success programs through the United Way, which will fund preschool services for five cohorts of children. Even at a 5% rate of return, they still receive 95% of any special-education savings to the state until the investments are repaid with interest. After that, the firms will receive 40% of ongoing cost savings until the participating students complete sixth grade.

If only companies like Goldman Sachs didn't operate virtually fax-free, there would likely be adequate public funding for special ed and all other education funding. Instead schools are forced to operate on the largess of private investment firms who not only operate at a profit, but also influence important public ed policy issues -- like which child should be in SpEd and which one needn't be?

According to Crain's,

United Way of Salt Lake is betting that the savings from keeping kids out of special-education, which is much more expensive than providing standard instruction, will provide the repayment to the investors.

About 600 students enrolled in public and private preschool programs in 2013. Of those students, 110 4-year-olds were expected to need special education during their kindergarten year. But only one of the students — who are now in the first grade — has required special education, which translates to about $281,000 in cost avoidance for Utah's public education system with 95% kicking back to the investors.

What these type of private funding schemes do is create pressures on school districts to remove students with special needs out of individually designed learning programs.

Pritzer says:

"Im not in the business of investing for 5 percent returns" but, "there are portions of people's portfolios invested in low-return opportunities, like treasuries. If you can prove this out, Goldman, Fidelity and other investors who put large amounts of capital into bonds, they could put them into social-impact bonds."

While social impact bonds pay out a relatively healthy interest rate when they succeed — between 5 and 7 percent a year in the Utah program — the investors lose all the money when they fail.

According to Huffington Post:

The success of the program is Salt Lake is intended to provide a more replicable template for funding and implementing preschool programs.

Chicago operates in early childhood Head Start programs in much the same way. Instead of relying on public funds to expand the programs and keep the benefits for itself, Rahm Emanuel has turned to lenders such as Goldman Sachs, Northern Trust and the Pritzker Family Foundation to provide the upfront money, with promises of substantial profits for the lenders down the road if the program goes as planned.

Great hustle, J.B.

SUPES IS BACK -- New names on the letterhead. Looking for more no-bid contracts from CPS

Joseph "Joey" Wise

“The primary leaders [Solomon & Vranas] of the former SUPES Academy have begun new endeavors and will not be joining us in this work ahead.” -- Joseph Wise

The federal investigation in Chicago of SUPES has obviously been sandbagged. Federal investigators have refused to comment on the investigation. Now even with Barbara Byrd-Bennett fleeing the scene and a grand jury supposedly in session, SUPES is trying to make a comeback.

After all, UNO did it with the feds on their trail, simply by shifting a few culpable leaders into different positions, changing the names on company letterhead, and relying on political powerhouses like Mike Madigan, Eddie Burke, and Rahm Emanuel to provide cover. So reported new SUPES owner, Joseph Wise figures he can pull it off as well, cashing in on the next round of no-bid deals CPS regularly hands out to connected consulting firms. Wise, whose companies have received at least $5 million in recent business from CPS, claims to have acquired "the best parts of the SUPES Academy."

Wise, who formerly worked for scandalized SUPES leaders Gary Solomon and Thomas Vranas, also wants to get more business from CPS by opening alternative schools under contract with the city school system. He runs a company called Acceleration Academies which hopes to open open eight campuses in Chicago, four of them starting next fall in Belmont-Cragin, Washington Heights, West Englewood and Bronzeville. Acceleration Academies describes itself as being run by Wise and partner David Sundstrom with two investors, Bryan Daniels and Steve King, who “have a deep interest in providing quality educational communities for underserved populations in Chicago.”

Obviously, deep pockets as well.

Wait, things get better. Wise is also "looking at the possibility" of Acceleration Academies working with Distinctive Schools, a Chicago charter school management company that he started with Sundstrom in 2011. Distinctive oversees the operation of four CPS-approved Chicago International Charter Schools campuses.

Actually, Wise is chairman of the board of Distinctive. He was the chief education officer for the company as of June 2014, tax records the company filed show. So I don't think he will have any problem "working with" them.

According to the Sun-Times, Distinctive Schools already gets about $18 million a year in taxpayers’ money to run the four charter schools as part of CICS. The charter network was headed until recently by Beth Purvis, who left after eight years to take a $250,000-a-year job as Gov. Bruce Rauner’s education secretary.

SUPES will now be called the National Superintendent Academy which is “wholly owned” by Atlantic Research Partners, a Florida company founded in 2007 by Wise and David Sundstrom.

According to the Sun-Times:

Wise said he first encountered Solomon in the late 2000s while working for what was then known as Edison Schools, a national operator of private schools that hired PROACT Search to help with hiring. Wise said they spoke by phone and met when he moved to Chicago...

...Solomon mentioned Wise in an August 2009 email to Byrd-Bennett when she was running Detroit’s public school system, where he was then trying to get business.“Joey Wise suggested to try again to connect with you”... Asked about that, Wise said, “I don’t remember that at all.

Wise likes to talk to the press a lot about "transparency". He tells S-T reporter Lauren Fitzpatrick, "You have to be really careful to make sure you’re transparent enough about what you’re doing. And we worked really hard to have that transparency and not misuse that relationship.”

But when asked, he won't say how much his company paid in the deal with Solomon and Vranas. He said the deal included a "confidentiality clause".