Forum on Interest Groups & Advocacy Symposium on Foundations

Giving to Government: Foundation Grants to State Education Agencies

Editors’ Note: In a previous post, Kristin A. Goss and Jeffrey M. Berry introduced the symposium on foundations as interest groups that they have co-edited for the October issue of Interest Groups & Advocacy. Here, Leslie K. Finger discusses her contribution to the symposium. 

When we think of foundations like the Gates Foundation and the Wallace Foundation, we usually think of their support of nonprofits and charitable causes. We rarely think of them as direct supporters of government. But the fact is that some foundations do provide grants to government entities. And like grants to non-profits, they are tax-deductible. In education, foundations give to schools, school districts, or state departments of education, along with many other non-government grantees.

Foundation giving at the state-level has the potential to be particularly impactful. This is because state education agencies have gained greater power in education in recent years, as policies like No Child Left Behind and the federal grant competition Race to the Top spurred them to take on new responsibilities. Granted, foundations’ funding of state education agencies accounts for only a small fraction of all foundation giving, which helps explain why this topic has gained little attention among scholars. Nevertheless, given states’ expanded education responsibilities and need for resources, these relatively small grants could disproportionately shape education policy. Considering the importance of this funding, the topic deserves more attention from scholars.

Already, scholars have documented how foundations with still-living benefactors like the Gates and Broad Foundations, what I will call “new foundations,” have converged on education initiatives in the areas of school choice and accountability. They fund charter school networks and the groups advocating for them, along with accountability and teacher quality reforms, policies commonly referred to as “education reform.” Taking the existing literature as a starting point, we might think that when giving to state education agencies, new foundations would similarly support the establishment and implementation of education reform, while older “legacy” foundations like the Carnegie Corporation or the Rockefeller Foundation might not.

If new foundations seek to push education reform, they might target their support to education agencies in those states that are more politically amenable to these types of policies. Teachers’ unions are the traditional opponents to education reform, while education reform advocacy groups like Stand for Children and 50-CAN are major proponents of such policies. Do foundations consider the presence and strength of these groups when making grants? Or do they seek out those states with the greatest needs? These might be states with fledgling bureaucracies or with high levels of child poverty. Or foundations might prioritize both political and needs-based factors in conjunction, targeting contexts favorable to education reform precisely where states are most in need of assistance.

In my Interest Groups & Advocacy article, which is part of a symposium considering foundations as interest groups, I use data on grants to state departments of education from 2003 to 2014 to examine which types of states get grants, what they are for, and whether this differs by the age of foundations. First, I explore whether there are differences in “new” and “old” foundations in terms of whether they target their support toward education reform initiatives. Second, I aim to determine whether state political factors, need, or both are associated with the likelihood of receiving a grant, and whether this varies based on whether foundations were founded since the 1980s or are from an older generation of foundations. Third, I illustrate my findings with a case study of Kentucky.

Using grant data from foundations’ 990 tax forms, I find that new foundations are more likely to offer state departments of education grants for education reform policies than are old foundations. Specifically, new foundations are more likely than old foundations to support standards, teacher and principal evaluations, accountability systems, the development of data systems to track student results and link them to teachers, and school choice initiatives. Old foundations are more likely than new foundations to fund school and district leadership development, scholarships for students, health initiatives, and awards recognizing outstanding educators. While not comprehensive due to limited grant information, this suggests that new foundations support education reform when giving to state governments more than old foundations do.

But do new and old foundations take into account the political context and state need when deciding which state to give to? I find that new, but not old, foundations seem to consider both political and needs-based factors when choosing which state education agencies to fund and how much to provide. Specifically, I find that poor states that also have education reform advocacy groups and weak teachers’ unions are more likely to receive any funding and receive more funding from new foundations than states without these characteristics. For example, education agencies in Louisiana, Kentucky, and Mississippi receive far more new foundation funding than those in West Virginia and Alabama. All five states are relatively poor, yet the latter two have stronger teachers’ unions. Additionally, West Virginia lacks visible education reformers, which the first three states (as well as Alabama) possess. For new foundations looking to promote education reform, Louisiana, Kentucky, and Mississippi are simply more politically-friendly venues.

For old foundations, I find that grants are more likely to go to urban states and states with Democratic governors, although this relationship is weak. The characteristic most strongly related to old foundation giving and grant amount is the existence and extent of prior funding support to these grantees. That is, states that already get grants from old foundations tend to continue to receive grants. For example, the Wallace Foundation supported several states for multiple year grants, including Oregon, Connecticut, and Virginia. These findings support that new, but not old, foundations target grants to state education agencies where education reform is politically feasible and the state needs the assistance.

The case of Kentucky illustrates how state need and political factors combine to shape foundation giving. In 2008, the Gates Foundation was looking for states to invest in to encourage new teacher evaluations. Gates sought out states with large portions of students receiving free and reduced-price lunch and without prohibitions on tying teacher evaluations to student test scores. The Gates Foundation also looked for states where there would be support for teacher reform.

Gates looked to Kentucky, which that year had 23 percent of kids living in poverty. Kentucky also had a well-respected education reform advocacy organization called the Prichard Committee. Moreover, the teachers’ union was willing to be part of the coalition, although it was skeptical of teacher evaluation reform. This openness to reform may have been due to weakness; the union, while not the weakest state teachers’ union in the U.S., is not generally considered among the strongest – the state does not require collective bargaining, and only 58.4 percent of teachers were union members according to the 2007-2008 round of the Schools and Staffing Survey (SASS), far below the national average of 73.6 percent. In other words, the political environment in Kentucky was amenable to teacher evaluation reform.

Additionally, the state education agency welcomed the assistance. In the wake of the recession, there had been cuts to education spending and Kentucky had not been successful on the first two rounds of the Race to the Top federal grant competition, which awarded states for education reform policymaking. The Gates Foundation, seeing a good fit in Kentucky, targeted its assistance toward reform; it brought those tasked with reforming teacher evaluations to conferences, it introduced them to experts, and it funded a data analyst to work on the teacher evaluation pilot. A new teacher evaluation bill based off this Gates-funded work was passed in 2013 without controversy. After its passage, the Gates Foundation funded local trainings in collaboration with the state teachers’ union. In sum, the Gates Foundation’s involvement in Kentucky took into account both political feasibility and need to successfully enact reform. The case study is illustrative of the patterns I find in the foundation grant data.

Why do these findings matter? First, it is worth repeating that states have taken on increasing responsibilities in education in recent years, and foundation involvement at the state level has the potential to shape the passage and implementation of policies affecting every school district within the state. Depending on the policy and your feelings about the involvement of private actors in policymaking, this might be a good or bad thing, but, either way, the potential for influence on policy is great. Knowing why foundations target certain states and what policies they seek to enact can help us shed light on how foundations use this lever of influence.

A second reason these findings matter is that they raise questions about what foundations are and how we should think about them when it comes to their interactions with governments. In this issue of HistPhil, Kristin Goss and Jeffrey Berry point out that foundations work behind the scenes to influence government. My findings show that they oftentimes emerge from backstage and directly pressure government, even if this is not “pressuring” in the traditional sense of lobbying. Rather, they insert themselves into friendly bureaucratic contexts precisely where they are needed most. This is an action that political scientists have long observed is characteristic of interest group lobbyists, who offer overworked legislator allies help with research, bill crafting, and other tasks. By inserting themselves where needs are greatest, lobbyists are well-positioned to exert influence. The parallel is noteworthy.

This should make us question whether prohibitions on foundation lobbying are adequate to stem direct government influence. Again, this influence may be a good thing if you support foundation goals. Nevertheless, for taxpayers losing state dollars to charitable tax deductions and whose voice in state government may be diminished by the presence of strong private actors, this is a democratic question worth considering.

-Leslie K. Finger

Leslie K. Finger is a Lecturer on Government and Social Studies at Harvard University. She is a political scientist and she studies interest groups and the politics of education.

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