Their name tags read like a catalog of the country’s wealthiest and most influential clans: Rockefeller, Pritzker, Marriott. They were there for a discreet, invitation-only summit hosted by the Obama administration to find common ground between the public sector and the so-called next-generation philanthropists, many of whom stand to inherit billions in private wealth.
Policy experts and donors recognize that there’s no better time than now to empower young philanthropists. Professionals in the field, citing an Accenture report from 2012, estimate that more than $30 trillion in wealth will pass from baby boomers to younger generations by around 2050. At the same time, the Dorothy A. Johnson Center for Philanthropy (no relation to this reporter) and the nonprofit consulting group 21/64 have concluded in a recent study on philanthropic giving that heirs are becoming involved in family foundations at an earlier age — specifically in their 20s and 30s — and imprinting them with the social values of their generation.
One topic that seemed to generate intense interest among the wealthy heirs was impact investing, which refers to a socially conscious form of investing that seeks to generate both a social benefit and a meaningful financial return.
After reading that, you'd think that the realization would set in that there is BIG money to be made from public education.
Here's a good example of investors making money but yet not really getting the job done for kids.
It's a scathing review of the very popular charter chain that is in California, Rockship. From Truthout the story is about a new report, Do Poor Kids Deserve Lower-Quality Education Than Rich Kids? Evaluating School Privatization Proposals in Milwaukee, Wisconsin by Gordon Lafer, a political economist and University of Oregon professor:
Lafer's research, commissioned by the Economic Policy Institute to evaluate the school-privatization push in Milwaukee, is a sweeping indictment of the growing private charter school industry -- and other schemes backed by rightwing groups and big business -- that siphon public funds out of public schools and enrich corporate investors at the expense of quality education for poor children.
Milwaukee is ground zero for school privatization, having pioneered the use of publicly funded private school vouchers in 1990.
Wisconsin's legislature has been moving more and more towards closing low-performing schools and privatizing them. They asked Professor Lafer for his analysis.
A popular chain of charter schools called Rocketship, which originated in California and has spread to Wisconsin, with the enthusiastic support of state legislators and the local chamber of commerce in Milwaukee, is "a low-budget operation that relies on young and inexperienced teachers rather than more veteran and expensive faculty, that reduces curriculum to a near-exclusive focus on reading and math, and that replaces teachers with online learning and digital applications for a significant portion of the day," Lafer writes.
Rocketship is a pioneer of the "blended learning" model of schools that rely heavily on computers to cut staff costs. The fastest growing, and most profitable, sector of the charter school industry is online or virtual schools, with the "blended learning" model, which combines online learning with a reduced and low-paid staff, a close second.
"The education model of the Rocketship chain of schools, a company central to the education reform push in Milwaukee, is particularly ill suited to providing the city's children with a high-quality education," Lafer found.
Lafer takes it a step further, pointing out in his report that the same chamber of commerce officials who promote Rocketship in Milwaukee send their own kids to enriching, well-funded schools with art, music, and small classes.
Problems with Rocketship?
With no gym, art class, librarians, or significant science or social studies, Rocketship provides a stripped-down program of study with a heavy focus on standardized tests.
Because of its extraordinarily high teacher turnover (the chain relies heavily on Teach for America volunteers), its large classes, and reductive curriculum, Rocketship subjects kids most in need of consistent, nurturing, adult attention to low-quality instruction and neglect.
But wait, what about the outcomes for the investors?
From 2010 to 2013, Rocketship increased it assets from $2.2 million to $15.8 million. And while it posted impressive test scores at its first schools in California, over the last four years, test scores have fallen at every Rocketship school. All seven Rocketship schools failed to make adequate yearly progress according to federal standards for the last school year. (Editor's note: where's Sec'y Duncan when you need him?)
"Given that Rocketship places such a strong emphasis on standardized testing, it is telling that, even by this measure, the company has faced struggles and disappointments," Lafer writes.
While Rocketship is a nonprofit, its business model enriches its directors through a deal with a licensed software company called "DreamBox," supplied by for-profit vendors, who happen to also sit on Rocketship's board.
"The more Rocketship expands, the greater DreamBox's profits," Lafer writes.
In conclusion, what does Lafer think?
"It appears the question [Rocketship] aims to answer is not simply, 'How can we do better by poor kids?' but rather, 'How can we educate poor kids while generating a 15 percent rate of return for investors?'" Lafer writes.
"These relationships help explain the venture capital industry's antipathy to elected school boards," Lafer suggests.
His last key thoughts?
"When people understand what it is, the corporate agenda for education is broadly unpopular," Lafer points out.
"I hope people connect the dots," Lafer said by phone from the Milwaukee airport.