Complaint targets philanthropy in public education

AP News
Posted: Mar 06, 2013 11:42 AM

PHILADELPHIA (AP) — School activists are using unusual tactics to fight a contested proposal to overhaul the nearly bankrupt Philadelphia school district: They've gone to the city ethics board.

Their ethics complaint says the two private groups that helped fund and develop the plan should have registered as lobbyists, which would have compelled public disclosure of donors and meetings with public officials.

And while nothing illegal is alleged, the complaint highlights an issue that has become increasingly relevant as cash-strapped schools nationwide seek money from nonpublic sources to offset budget cuts. Supporters say private money funds badly needed innovations, yet critics say there is not enough transparency.

"Is it fair for a small number of really rich people to take over educational policy-making?" said Kenneth Saltman, an education professor at DePaul University in Chicago. "Who are the lobbyists really working for? Who's funding them?"

Parents United for Public Education, the Philadelphia group that filed the complaint in December, contends that the powerful William Penn Foundation and Boston Consulting Group used more than $1 million in donations to gain closed-door access to top district officials and push unpopular reforms, such as closing dozens of under-enrolled neighborhood schools while supporting more charter schools.

"No such access has ever been afforded to parents and community members who had to settle for limited information and public meetings," the parents group said.

District officials will vote Thursday on a revised recommendation to close 27 schools.

Jeremy Nowak, who led William Penn while the overhaul proposal was being developed, has said the foundation's mission to improve life in the Philadelphia region must include the school district, one of the nation's largest, poorest and most academically troubled.

"I would think you'd want philanthropy and business and others to care about this," Nowak told The Notebook, an independent news organization that covers the Philadelphia schools. "I think our problem is if we don't care about it."

Nowak abruptly left the foundation days before the complaint was filed.

The issue also has cropped up in New Jersey, where the American Civil Liberties Union sued to force Newark officials to publicly disclose details of a $100 million donation from Menlo Park, Calif.-based Facebook Inc. to the school system. A judge sided with the ACLU in December.

And attorneys at the Newark-based Education Law Center said it took an open records request to learn that a $430,000 grant from the Broad Foundation to the New Jersey Department of Education came with the caveat that it could be rescinded if Republican Gov. Chris Christie left office.

Philanthropy to public agencies in New Jersey is problematic partly because of outdated disclosure laws, said David Sciarra, the law center's executive director. But he noted lawmakers recently introduced a bill that would mandate state oversight of such donations.

"(It's) very difficult for the public to know how much money is flowing in to support a particular policy agenda," Sciarra said.

Broad Foundation spokeswoman Erica Lepping disputed the contention that the grant was not transparent. She stressed the foundation is not involved in setting state law and policy, "nor should we be."

"We agree to fund efforts that we believe will create strong public school environments in which good teachers can do great work and students of all backgrounds can learn," Lepping said in an email.

In Philadelphia, the debate began after William Penn gave school officials a $1.5 million grant last year to hire the Boston Consulting Group to review the struggling district.

After completing one phase of work, Nowak publicly encouraged others to donate $1.2 million for additional consulting. But that money was funneled through a third party, allowing Boston Consulting to continue its work without a direct contract with the district. Some donors were anonymous.

The public deserves to know whether those private funds paid for an honest assessment of the schools' needs or whether they bought a predetermined set of recommendations that could benefit the unknown donors, Parents United member Helen Gym said.

The William Penn Foundation and Boston Consulting contend the parents' complaint has no merit; district officials have said they alone will decide which parts of the proposal to implement.

But the foundation subsequently suspended grant-making to city-related agencies, saying it needed clarification of the lobbying ordinance. On Feb. 20, the ethics board said grants made in response to requests by such agencies don't constitute lobbying.

The board hasn't yet ruled on the parents' challenge, which centers on the fact that the schools did not have contract with the consultant or William Penn.

"If they had funded the district directly," Gym said, "we wouldn't have the basis for a legal complaint."

The Philadelphia schools had another philanthropic brouhaha in 2011, when Mayor Michael Nutter and others solicited private contributions to help buy-out district Superintendent Arlene Ackerman.

Nutter was trying to minimize taxpayers' liability for Ackerman's $905,000 severance package, but a public outcry over donors' anonymity scuttled the deal. The entire payment came from public funds.


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