Thursday, December 03, 2015

Rich People: Why Do They ALL Have to Come After Public Ed?

To start, consider this from Inside Philanthropy (one of my new favorite places to stop by and read awhile:)

Now, with the rise of Big Philanthropy, we’re seeing the logical next act in this age of inequality—the conversion of all those big piles of money into influence that extends into every last corner of U.S. society, not to mention into remote villages in Africa and Asia. Today’s economic inequality may be nothing compared to tomorrow’s civic inequality as more activist mega-donors emerge with big money and big ambitions—at a time, I should add, when government will be spiralling down into fiscal paralysis due to soaring entitlement costs as the boomers retire. If the 20th century was the era of Big Government, the 21st Century is shaping up as the age of Big Philanthropy. This power shift is one of the most important stories of our time.
Which is the lead-in to this: Facebook's Mark Zuckerberg, and his wife, Pricillia, had a baby girl, Max, last week. Mazel to them and she's beautiful.

He and his wife then decided that they would give 99% of their fortune away.    It was oddly done thru a letter to their daughter - quite lengthy and full of big words she won't be reading for quite awhile.  Oh wait, silly me - that letter was just the vehicle for their announcement.

But heck, he's not even setting up a foundation like Gates.

No, they are creating some kind of "limited liability company" where all the purse-strings would be tightly controlled.  It allows them to lobby on bills and invest in companies.  And, they can make political donations.  Any profits from these investments may be put back into the Chan Zuckerberg Initiative (they have said they will but they are not legally obligated to do so.)

For purposes of this blog, here's the key section:
Even better, students around the world will be able to use personalized learning tools over the internet, even if they don't live near good schools. Of course it will take more than technology to give everyone a fair start in life, but personalized learning can be one scalable way to give all children a better education and more equal opportunity.
Kids, you're going to be hearing A LOT about "personalized learning." And, of course we all support a more personal focus for learning but honestly, A LOT of people will be making A LOT of money on this grand experiment including Zuckerberg.

They also said in their letter:

“We must engage directly with the people we serve. We can't empower people if we don't understand the needs and desires of their communities.”

See below about how his $100M to Newark public education went pretty much down the drain.  I rarely trust when wealthy people say they want to listen to the "community."  (Zuckerberg is now $120M into Oakland public ed and so let's see.) 

From the NY Times announcement :
We must build technology to make change. Many institutions invest money in these challenges, but most progress comes from productivity gains through innovation,” they wrote in the letter to their daughter. “We must participate in policy and advocacy to shape debates. Many institutions are unwilling to do this, but progress must be supported by movements to be sustainable.”
Technology is the answer? More on that in a minute.  And what "movements" are they referencing?  It's unclear but here's a hint:
In May, AltSchool, a private school start-up in San Francisco that develops personalized learning technologies, announced that it had raised $100 million from a group of investors, including a donor-advised fund financed by the Zuckerberg family at the Silicon Valley Community Foundation.

In September, Facebook announced that it was working with Summit Public Schools, a charter school network, to develop an online platform to help tailor education to the needs and interests of individual students.
Here's what the NY Times reports today in an article entitled, "How Mark Zuckerberg's Altruism Helps Himself":
An L.L.C. can invest in for-profit companies (perhaps these will be characterized as societally responsible companies, but lots of companies claim the mantle of societal responsibility). An L.L.C. can make political donations. It can lobby for changes in the law. He remains completely free to do as he wishes with his money. That’s what America is all about. But as a society, we don’t generally call these types of activities “charity.”
What’s more, a charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg L.L.C. won’t be subject to those rules and won’t have any transparency requirements.
And how it works out for Zuckerberg personally?
The savvier move, Professor Fleischer explained, would be to have the L.L.C. donate the appreciated shares to charity, which would generate a deduction at fair market value of the stock without triggering any tax.

Mr. Zuckerberg didn’t create these tax laws and cannot be criticized for minimizing his tax bills. If he had created a foundation, he would have accrued similar tax benefits. But what this means is that he amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it. Any time a superwealthy plutocrat makes a charitable donation, the public ought to be reminded that this is how our tax system works. The superwealthy buy great public relations and adulation for donations that minimize their taxes. 
Let's review Mr. Zuckerberg's efforts on public ed so far. In 2010, to great fanfare (on Oprah, no less), he announced he was giving $100M to improve public schools in Newark.  The crowd went wild.  Now, just five years later, how has that worked out?  Well, it helped the expansion of charter schools but alienated a huge number of parents and community. Zuckerberg said he learned "a lot" from the experience.

The New Yorker had a 2014 article called Schooled about how Chris Christie, Mark Zuckerberg and Cory Booker did with that $100M.

To the bigger picture which is covered by this word, “philanthrocapitalism."  From Jacobin:
Business executives point enthusiastically to the “blurred” line between for-profit and nonprofit activities in order to justify the growing charity they receive.

In 2010, the Gates Foundation offered $1.5 million to ABC News and a little over $1.1 million to NBC in 2011 “to support the national education summit.” The following year, the Gates Foundation gave another million to NBC, this time for the more vague purpose of “inform[ing] and engag[ing] communities.” 

A frequent worry among teachers and parents is that Gates money helps position private firms such as Pearson and Microsoft to benefit from the testing industry that is tightening like a corset around students and teachers.
 The New Yorker has an article today on this very subject - Zuckerberg and philanthrocapitalism:
 By transferring almost all of their fortunes to philanthropic organizations, billionaires like Zuckerberg and Gates are placing some very large chunks of wealth permanently outside the reaches of the Internal Revenue Service. As tax-exempt entities, these charitable enterprises won’t face any liabilities when they eventually sell the stock they receive. That means the country’s tax base shrinks.
Why bring this to your attention?  The New Yorker writer, John Cassidy, says what I have been saying for years:

 It is simply to point out what should be obvious: people like Zuckerberg and Gates, by virtue of their philanthropic efforts, can have a much bigger say in determining policy outcomes than ordinary citizens can.

From Inside Philanthropy:
This couple is still young, remember—he’s 31, she’s 30—and so they should be ridiculously idealistic.

Which brings me to why this pledge is, in the end, darn scary. Whatever the high-minded ideals of Zuckerberg and Chan, we’re still talking about a huge amount of power in the hands of two private individuals, and at a time when wealthy elites already have enormous power.
Philanthropy is not a meritocracy, nor is there a moral litmus test for entering. Anyone with enough money can play. And as more billionaires enter this game—whether we cheer them or fear them—it’s getting harder for the rest of us to be heard in the public square.


Teacher Greg said...

So depressing.... its an affront to the whole idea of public education. If I thought for a minute the money would be going to help students in public school to have a better experience I might be less concerned (though I think it should still be up the voters/citizens to run their public schools and not a few self-anointed super-wealthy that shouldn't even exist in the first place), but I know that this will just lead to more top-down public-private "partnerships" involving things like "choice".

The other big news headline in Seattle education this week for me was the state teacher shortage. I don't know who they think will work in the "innovative" schools of the future for rock bottom wages with no benefits and constant criticism from administration and the public at large.

It is easy to despair for the future of education for people living in poor communities.

Bruce B said...

You seem to be criticizing Zuckerberg/Chan for avoiding taxes AND for using their money for political donations or profit-making. This is an unfair criticism; they can do only one of those things with any given dollar, not both. If they make political donations or fund a business, they have to pay tax on it when they convert it from stock to cash, and they don't get a charitable deduction. They avoid taxes only if they donate to an IRS-approved charity.

Of course they can choose charities that you and I might not approve of, but that's a politically popular part of our highly imperfect tax system.

Anonymous said...

Zuckerberg and his wife aren't doing charity work, because they haven't established an entity recognized as charitable by the IRS. They are establishing a fund that will be used to pursue things that the couple believe "make the world a better place". There will be no oversight, and no assurance that what they want to pursue, their vision, isn't at odds with better ideas out there or the things that people want to see happen in the world. While I believe they want to make more money, I think they are also ok with losing this money. I'm not sure which I am more afraid of.

- Best Intentions

Melissa Westbrook said...

Bruce, you do realize the humor in saying they can only do one thing with any given dollar? I think they have figured this out much further than we understand.

BI, I'm worried as well. They are very young and could do a lot of bull in the china shop damage. It's not like losing $100M in Newark with very little to show for it seems to concern them. Here's hoping that they do better in Oakland.

But,as Gates says, it's an experiment. Just not with their children.

Anonymous said...

These bad boy billionaires and their philanthropies. Never enough money and greatness. If the billionaires didn't do it though, it would be textbook publishers or some other money making entreprise. It's really annoying when rich people can't just be satisfied with funding scientific research and dedicating hospital and university wings.

With so many of us well connected to each other by ipad, cellphone,and tablet, it's inevitable that this technology in all forms would invade education. Data is being gathered everywhere with every Google search, tweet, and credit card swipe. I think this is the unnerving trade off in the use and reliance of such technology. What we pay for modern ease and instant gratification. Just think we wouldn't have this blog and would have to meet face to face instead.

Not so long ago, teachers taught with real book, chalkboard, and filmstrip. Long gone days. I miss aspects of it. But I don't miss staying up till 2am typing a 10 page research paper on a manual typewriter. Every typo took a minute to fix. I don't miss walking to the local library in freezing weather so I can fight fellow classmates for the same encyclopedia and books for our research topic. Back then information wasn't as varied or presented with so many viewpoints which can be good or bad depending if you like more or less info to sieve through. I miss privacy though. I like that my parents didn't know how I did in school until they got the report card. Gave me time to redeem myself. My parents didn't dare write notes to my teachers. A phone call was for a serious injury or a bad fight. Cheating was an F. In fact, most classrooms didn't even have a phone in the room. I wonder if all that let teachers have more time to focus on students and classwork. No wonder we were writing so many papers and written tests back then. That was feedback. No data to be mined from all the red ink.. Ha!

reader (in red)

Anonymous said...

Even big philanthropy will never replicate the financial reach of properly sourced government. Bill Gates has said as much, and it's true. When we start abdicating responsibility to rich individuals, we are losing our capacity to make system-wide changes that are based on democratic principles of representation and community consensus. The narrow views of even super smart and accomplished individuals are rarely more effective than approaches filtered through a broad sector of society. It's much easier to build an online social network than it is to educate a million kids. No question.

- Best Intentions

Catherine said...

Whether the personalized learning is good/bad or has your flavor of preference... I find it... amusing that given the lousy internet access endured by most of those outside of US cities (many of our relatives have either no internet, or are limited to the equivalent of 1 movie per month and nothing else), how is it that this customized learning will happen where there aren't schools? There's just no money in brining bandwidth to places where there aren't 10,000+ people.

Bruce B said...

Melissa- No, I truly don't get the humor. My point is that they can't get tax deductions for giving money to their LLC, only if they give it to a real charity.

I'm disappointed by the assumption that anything they do with their money will be damaging to schools. Throughout our history individual philanthrophy has helped fund schools (from pre-K to postgrad), libraries, medical research, environmental causes, social services, etc. Of course not every program has worked and arguably education innovation has been especially challenging. But does that mean that innovation is impossible in education? Or that the Zuckerbergs (and other rich people for that matter) don't genuinely want to make the world a better place? Or that they're not smart enough to fund any useful innovations?

It's possible that you, or the Seattle School Board, or OSPI, or the US Department of Education, could do better things with the money than the Zuckerbergs. I wish we had higher taxes so they could try. But that's another debate. Here we have people who could keep their money or devote it to any number of political or charitable causes. They're choosing education. I hope that, rather than being cynical or critical, people like you will suggest useful ways they could spend their money that are consistent with their vision and interests. Surely that's possible.

Melissa Westbrook said...

Bruce, that is possible. And many, many people have suggested to Bill Gates, for years, what he might try. But his foundation lives in an echo chamber and it's truly not possible to penetrate it.

Sure, we can all try to talk to Zuckerberg but the evidence so far on his ability to listen is not good either.

I'm sure the Chan-Zuckerbergs DO have good motives but they certainly have set it up to benefit both their own tax issues as well as make a profit. Is that charity? No. Is that philanthropy? Sure, as it evolves.

I'm not being cynical; I'm being realistic. Past performance is generally the best predictor of future behavior.

Anonymous said...

Melissa was right to highlight what this "gift", which isn't a gift, is about. Many people quietly volunteer and donate without any strings attached. By spotlighting their charity and benefiting from the publicity, the Zuckerbergs opened themselves up to praise and scrutiny. When powerful and rich people make grand plans to fix the world's conditions, those of us who live in the free world have a right to question the plan.


Anonymous said...

or devote it to any number of political or charitable causes Don't kid yourself - they, like most of the other philanthrocapitalist gang are very savvy at finding ways to get funds to things they care about. In ways most of us would never dream of.

But the bigger issue is the amount of influence these large chunks of money buy. It comes down to a pretty simplistic thing for me - being wealthy should not give you a bigger voice in any field, whether it's education or medical research.

Yes. I know that's a fairly naive viewpoint. Still the way I feel though.


Anonymous said...

Philanthropy isn't the issue in avoiding taxes. These corporations already gut the state tax system by moving their assets into offshore holdings. They have already stolen billions from the public schools. Then they have the nerve to call the nickels and dimes they offer back philanthropy? Please.

-SPS parent

Anonymous said...

" Past performance is generally the best predictor of future behavior."

That been the state of Seattle public schools for the last 10 years and archived for posterity on this blog.


Melissa Westbrook said...

Amused, good point but I would say if this district didn't spend so much time chasing dollars with huge strings attached,they might have been better off.

Anonymous said...

Folks: You've got it all wrong. They aren't "giving away" a dime. They are "spending" it, complete with expectations and strings attached. Spray as much perfume on the pig as you want, it's still a pig. Giving? Yeah, right. More like purchasing faux benevolence. It would be better for all if they just paid their fair share of taxes.

Perhaps the most disturbing trend that continues in "personalized learning" models, is the further isolation of children from one another, destroying socialization, empathy, feelings, etc., which are not, and cannot be properly developed through a computer screen. But, given where we live, and the thriving anti-social behaviors currently flooding our region, I'm swimming against the current to even mention this point. But anyone who rides a bus knows what I'm talking about. Nobody talks to others anymore, and people barely look each other in the eye. Sad, who needs people when there's an App that will do that?


Anonymous said...

God so loved the world, that he created man in his own image. See the parallels?

They'll do what they want, and we'll live with it.