Editors’ Note: As part of the ongoing forum on philanthropy & education, author of Follow the Money: How Foundation Dollars Change Public Schools Sarah Reckhow discusses Dale Russakoff’s recently-published book, The Prize: Who’s in Charge of America’s Schools?

In 2010, Facebook Founder and CEO Mark Zuckerberg announced a $100 million grant for educational reform in Newark on The Oprah Winfrey Show. The story of this grant—its genesis, direct impact, and unanticipated consequences—is told by Dale Russakoff in her new book The Prize: Who’s in Charge of America’s Schools? Some aspects of the book will be familiar to anyone who read the May 2014 article in The New Yorker on Newark, “Schooled”, also by Russakoff. The book length account is masterful and provides a much broader portrait of Newark’s political landscape. It’s a page-turner drawing on interviews with the major players along with shoe leather reporting from philanthropists’ boardrooms, Newark’s rapidly changing schools, and the neighborhoods where families struggle to find quality education, safety, and stability for their children.

Newark’s story is hardly lacking in drama—the personalities are big and the political battles are fraught with racial conflict and a history of local mistrust towards outsiders, fueled by two decades of state control. The story begins at an annual conference of business leaders, philanthropists, and politicians in Sun Valley, where Newark’s Mayor Cory Booker and Zuckerberg met for the first time. Although Newark’s story seems uniquely devised for a movie script (calling Aaron Sorkin…), it’s also emblematic of the challenges of major philanthropy—one perennial challenge and another of more recent vintage.

First, there is perennial drive by philanthropists to anoint national models for reform. Early in the book, Russakoff describes a proposal that Booker shared with Zuckerberg (prepared by McKinsey consultants) called “Creating a National Model of Educational Transformation,” declaring that success in Newark would create a “Blueprint for national replication across America’s urban centers to transform the lives of its youth.” Philanthropy has a long history of selecting local laboratories for strategies that reformers hope to replicate on a broader scale—for example, Ford’s Gray Areas program of the 1960s was envisioned as a model for national urban policy. The pitfalls of the national replication ideal are echoed throughout Russakoff’s account. The leaders of Newark’s new reform efforts seem blind to the reforms already underway involving local teachers and principals. The negotiation for a performance pay contract for teachers ignores the constraints of state politics, which force the district to pay a hefty cost for teachers it could not lay off. The fallacy of the national replication model—at the expense of truly listening and understanding local circumstances—is a lesson that philanthropists must relearn time and again. According to Russakoff, Zuckerberg, and his wife Dr. Priscilla Chan, may have taken this lesson to heart after their experiences in Newark. Their 2014 announcement of $120 million in grants for San Francisco Bay Area schools specifically mentions, “listening to the needs of local educators.”

Second, foundations are fueling the development of a new sector of service providers that provide alternatives to the public sector. Many funders are motivated by the view that nongovernmental efforts can be more efficient and flexible than working with or through governments. Philanthropists involved in education have made growing investments in charter schools—particularly supporting the rapid growth of charters in specific urban districts, including Chicago, Los Angeles, New Orleans, and Washington, DC. In many cities, charter growth is accompanied by significant declines in student enrollment in the traditional public schools. As Russakoff explains, parents who choose charter schools over traditional public schools for their children are often motivated by the desire to find better opportunities for their children when traditional public schools have not delivered. While the option for an exit from a dismal public school can be well justified for an individual family, the collective impact of thousands of families making these choices can be financially devastating for the school district, particularly in older industrial areas. Russakoff documents the rising budget deficit in Newark as charter schools expand and the impact of the superintendent’s efforts to reduce spending; but these cuts are baffling to residents who heard that Newark just received Zuckerberg’s millions.

Newark is not alone is this challenge—districts like Chicago, Los Angeles, and Philadelphia also face structural deficits, in part due to continuing enrollment declines as families opt for the growing charter sector. Thus, an ironic consequence of the perceived efficiency of expanding educational options through non-governmental providers is the inefficiently distributed burden of legacy costs—employee benefits, pensions, and old facilities—and the duplication of administrative functions. As Russakoff demonstrates, these costs mean that the public schools lack the flexibility to provide new services and shift spending in ways that the most effective charter operators are able to do. In the short term, education philanthropists remain bullish about supporting charter school expansion. In the long term, big questions loom about the state of the public sector in urban education, and whether foundations supporting charter schools will consider the broader consequences of a private-sector-focused strategy for reform.

-Sarah Reckhow

Sarah Reckhow is assistant professor of political science at Michigan State University. She is the author of Follow the Money: How Foundation Dollars Change Public School Politics, which received the Virginia A. Hodgkinson Research Book Prize in 2014.