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Commentary: Why do many big donors prefer charter schools? (Hint: It’s not because they hate unions)

Guest contributor | February 8, 2016

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KIPP Raices

Students at KIPP Raíces Academy in Los Angeles

By Richard Whitmire

Recent big-dollar donations from pro-charter philanthropists leave traditional educators sputtering: Why don’t they just donate their money to us?

Good question, and one that was raised in Los Angeles recently in light of a possible huge gift from philanthropist Eli Broad and others that appears headed mostly to charter schools. LAUSD board member Scott Schmerelson wondered out loud, the L.A. Times reported: Why not us?

The same questions are being raised about the recently announced $100 million education fund coming from Netflix’s Reed Hastings. If past predicts future, most of that money will end up in charter schools — which critics say is part of a larger plot to destroy traditional public schools.

So why do these guys (and they are mostly guys who made it big in Silicon Valley) seem to distrust our neighborhood schools?

The answer offered by charter critics is pretty simple. Big money hates big unions. That’s the take of charter antagonist Diane Ravitch. Her comments about the Walton Family Foundation, which has announced it will invest $1 billion over the next five years to back new charter schools: “The Walton Family Foundation, which was created by the billions earned by Walmart, is anti-union,” wrote Ravitch in her blog. “Walmart does not have unions. It has fought unionization and had to be pushed kicking and screaming to agree to pay minimum wages, eventually.”

So that’s it? Big money hates big unions?

Based on several years of reporting on charter schools, especially California charters for a book about Rocketship charters in Silicon Valley, I see a somewhat different narrative.

In truth, these entrepreneurs are often agnostic about unions, some even favorably inclined, such as Hastings, who when I met with him praised the union leaders he worked with on the California State Board of Education. (Don’t get him started on local school boards, his real beef with traditional schools.)

Here’s the nut of their aversion to traditional schools: When discussing how districts hire, fire and promote, a system dictated partly by union contracts, these entrepreneurs become near-apoplectic.

At a Texas conference Steve Jobs once asked rhetorically about school districts: “What kind of person could you get to run a small business if you told them that when they came in, they couldn’t get rid of people that they thought weren’t any good? Not really great ones, because if you’re really smart, you go, ‘I can’t win.'”

While reporting the Rocketship book I spent hours with co-founder John Danner, a Stanford-educated electrical engineer who cashed in his software company and then decided to tackle education problems. To get experience, Danner taught in a high poverty school in Nashville.

One day when he thought he had become a consistently successful teacher he went to the principal to ask about joining school leadership. The answer: Be patient, stay in the classroom for several more years, and you might have a shot.

Here was a Silicon Valley startup star, the former CEO of a publicly traded company, being told to sit tight and log more seat time. Neither Danner, nor Jobs, could imagine achieving success by rewarding software engineers based on seat time.

Danner often pointed to union contracts he thought made schools unworkable. “Look, the union contract in San Jose Unified is 452 pages long,” he told me. “We’re a startup. The whole point of a startup is to be flexible. The job changes every day.”

And that’s the real point about these guys: They’re not so much anti-union as they are pro-startup. Tech CEOs live in a world where a single talented software guy binging through a weekend can solve a problem that has stymied platoons of software experts for months. You pay that guy the same?

Here’s how they view schools: They hire from a lower-level talent pool (based on college SAT scores), reward based on seat time and lay off based on seniority. That just drives them crazy. It’s more about wasting talent than loathing unions.

Does that make tech CEOs right and school superintendents and unions wrong? Not necessarily. As Danner found out, even charter schools can’t be disrupted like tech companies. But it does help explain why these big funders avoid traditional districts.

There are other reasons for the distrust. All the funders I met were well aware of the 1993 Annenberg Challenge gifts: $500 million to public schools over five years, gifts that went pretty much nowhere.  What kind of entrepreneur pours money into a disruptive-resistant enterprise? Better to go charter.

The Walton money got steered away from districts as a result of John Walton’s frustrating experience working as a donor with San Diego schools. (Sorry Diane; it’s not all about unions.)

Another recent parallel to the Annenberg gifts may be the Broad Prize, which rewarded traditional school districts based on their ability to narrow achievement gaps. Since 2002 the Broad Foundation poured about $16 million into prizes alone.

In 2014 the foundation suspended the prize for public schools but kept the charter school prize. Why? The slow rate of progress in traditional districts. Eli Broad hasn’t given up on traditional districts: Over the past 15 years the foundation has invested nearly $600 million in education, a mix of traditional and charter schools. The Broad Center-trained residents continue to be in demand in districts across the country.

But most of the new gift will probably end up in L.A. charters. Why? That’s where the “high quality” school seats are found.

Finally, there’s the simple motive of any donor: I want to see results.

With charters, donors can pick a leader or philosophy they admire and then visit to see results, said Jeffrey Henig, co-author of a new book on philanthropists. Said Henig: “Giving to a district feels more like paying taxes.”

This article was produced in partnership with, a news organization funded in part by the Walton Family Foundation.  

Richard Whitmire is a senior fellow at the Kauffman Foundation and the author of several education books.

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