Editors’ Note: Robin Rogers argues that philanthropy has undergone great change since the turn of this century, and particularly in the education sector. In her analysis of this “new” philanthropy, she engages with Johann Neem’s and Jeffrey Snyder’s recent contributions to the site’s philanthropy & education forum.
Laurene Powell Jobs, Steve Job’s widow, just gave fifty million dollars to start “XQ: the super school project.” XQ is an open call to “reimagine and design” the American high school. The New York Times quoted Ms. Jobs saying, “The system was created for the work force we needed 100 years ago…. Things are not working the way we want it to be working. We’ve seen a lot of incremental changes over the last several years, but we’re saying, ‘Start from scratch.’ ” She and a team of experts will judge the ideas submitted and select five to ten of them to fund. Jobs, who sits on XQ’s Board of Directors, wants the project to create a template for national education reform. It is an ambitious project, announcing Ms. Jobs’ intent to play a central role in reshaping American high schools. And if successful, it comes close to making public policy.
Ms. Jobs is the quintessential New Philanthropist. Philanthropy in all areas has undergone great change since the turn of this century. Nowhere has this been more true than in the education sector. There are plentiful names for this new philanthropy. Some people call it philanthrocapitalism, others call it venture philanthropy, and still others call it strategic philanthropy. There are core commonalities among these approaches that I will refer to simply as the new philanthropy.
The central ideas behind the new philanthropy focus on large donors giving targeted grants to specific organizations with measurable goals in order to leverage other (often government) money. It is based on the venture capitalist model of investors picking winners and working with them to maturation. A hallmark of it is a reliance on living, hands-on donors.
This new style of philanthropy started to emerge in the late 1990s. In 1997, CW Letts and his colleagues published their influential article, “Virtuous Capital: What Foundations Can Learn From Venture Capitalists” in the Harvard Business Review. Why can’t we, advocates of the new philanthropy argued, use the tools that revolutionized business to revolutionize philanthropy? Why can’t we benchmark goals? If businesses are getting evermore sophisticated with their data, why shouldn’t philanthropy? The new approach emphasized using philanthropic money to catalyze change in the public sector. By doing this, they hoped to leverage significant tax dollars – public school funding, for example, runs around $600 billion a year in the US – by financing change in critical policy areas, such as curriculum design in education reform.
Considered to be more muscular than traditional approaches to philanthropy, the new philanthropy appeals to many men who made money in the tech or finance sectors through new innovations and, as is the case with Ms. Jobs, their wives or widows. These (primarily) men have great faith in the tools and techniques that they used to disrupt the old economy and usher in the new one.
The newly wealthy want to engage in a new kind of philanthropy that targets systems, relies on metrics to benchmark progress, and produces a competitive environment; they want to build a new approach to philanthropy that mirrors their approaches to business. The Bill & Melinda Gates Foundation, established in 1999, is at the vanguard of this movement. They hand select grant recipients and aim to transform institutions, such as education, through their giving. I would also place in this category John and Laura Arnold, Mark Zuckerberg, and Michael Bloomberg, among others.
How is this different from the old philanthropy? In some ways, it is not. Philanthropists have always sought to transform social institutions through giving. But there are enough differences, in at least emphasis, between the old and new philanthropy to merit distinguishing the two. The old philanthropy, as practiced in the mid 1990s, was located in legacy foundations that had been founded by long-dead donors. The staff was professionalized and the goals often included funding programs’ operating expenses.
Even in cases, such as the 1993 $500 million Annenberg challenge, sometimes cited as a forerunner to the new philanthropy, where a foundation explicitly sought to transform the American education system, older foundations often left the details of program content and delivery to local non-profits. The inability of the $500 million grant to affect change is often attributed to this lack of oversight of the grantees by the foundation. Others have argued that the program funded too many schools and too many projects. The end result was that the great bureaucracies of American education seemed to swallow the money.
Learning from the Annenberg challenge and others, new philanthropists seek to change narrow and specific ways of doing things rather than to simply fund diverse projects. The Gates Foundation’s involvement in the controversial State Common Core standards is a prime example of this approach. The foundation has been central in the development and dissemination of these standards, which shift curriculums wholesale and even impact classroom pedagogy. It hits an area of high impact. Unlike traditional philanthropy, as I argue in my recent article “Making Public Policy: The New Philanthropists and American Education”, the new philanthropists are very savvy about institutional pressure points.
Another example is charter schools. These schools, as Johann N. Neem notes in his insightful blog post “Why We Consider Public Schools Public & Charter Schools Private,” are more private than public although they are funded with public dollars. The aim of many new philanthropic givers is to break the intuitional stronghold of the public education system in the United States and to build up a parallel institution that operates under the guidance of funders and the program founders whom they have chosen. This potentially gives funders remarkable control over K-12 education.
None of which is to say that the new philanthropists are always successful. Mark Zuckerberg gave a $100 million grant to Newark to transform its school system. It didn’t work. Local politics and, arguably, large consulting fees cut into its effectiveness. But even with this example of failure, we should still note the potential of the new philanthropy to be transformational. Jeffrey W. Snyder, in his terrific new blog post, “Do Old And New K-12 Education Philanthropy Differ?” shows that new philanthropic foundations are targeting K-12 education and that new, highly dense networks are developing between these funders and select reform projects.
In the end, what are we to take away from this discussion of the new philanthropy? Primarily that it has the potential to be transformative, with all of the perils and possibilities that implies. This generation of super-wealthy philanthropists is taking their best shot at affecting social change and using new tools to do it.
Robin Rogers is an associate professor of sociology at Queens College and the Graduate Center at the City University of New York (CUNY). She studies politics, policy, and philanthropy.