New Works in the Field / Philanthropy and Democracy / Philanthropy and Education / Philanthropy and the State

Why Exercise Restraint when Funneling Money into Politics? An Appeal to Mega Donors’ Self Interest

Editors’ Note: Reflecting on her new book, co-authored with Jeffrey Henig and Rebecca Jacobsen, Outside Money in School Board Elections: The Nationalization of Education Politics, Sarah Reckhow draws our attention to Los Angeles and details a new trend among mega donors in coordinating their philanthropic giving and political contributions. Reckhow argues that this behavioral shift “is not only problematic for democracy, but based on the Los Angeles case, it might also be a sub-optimal strategy for mega donors hoping to achieve their policy objectives.”

In 2009, Eli Broad, a Los Angeles based billionaire philanthropist with a strong focus on education reform, contributed a total of $1000 to a single candidate running for the Los Angeles Unified School District (LAUSD) Board of Education. Eight years later, in the most expensive U.S. school board election on record, Broad contributed a total of $21,600 to four candidates for the LAUSD board. Yet the funds that Broad gave directly to candidates pales in comparison to the nearly $1.9 million that Broad contributed to California Charter Schools Association Advocates, a 501(c)4 organization, for the 2017 LAUSD election. For well over a decade, Broad has played a substantial role in philanthropic funding for charter schools, charter management organizations (which manage the operations and expansion of charter schools), and charter advocacy efforts that transformed education in Los Angeles. Yet his strategy for engaging in education politics changed during this time period—from more limited financial involvement in electoral politics in education to engaging as a major campaign contributor. Furthermore, Broad’s shift towards uniting philanthropy with campaign contributions is mirrored among other education mega donors—Reed Hastings, Laurene Powell Jobs, and John and Laura Arnold, to name a few.

I have studied and written extensively about education politics in Los Angeles during the last 10 years. My first book, Follow the Money: How Foundation Dollars Change Public School Politics, traces the role of major foundations in urban school district education politics, with case studies of New York City and Los Angeles. A new book, co-authored with Jeffrey Henig and Rebecca Jacobsen, Outside Money in School Board Elections: The Nationalization of Education Politics, examines new trends in campaign finance for school board elections with five city case studies, including Los Angeles. Reflecting on this work, I see Los Angeles as a microcosm for understanding the interaction of coordinated philanthropic and political money. While I recognize that traditional philanthropy and nonprofits do engage in advocacy, my aim is to highlight the consequences of a behavioral shift among mega donors—towards unconstrained giving in electoral politics that is intentionally guided by the same policy goals that motivate their philanthropy. I argue that this shift is not only problematic for democracy, but based on the Los Angeles case, it might also be a sub-optimal strategy for mega donors hoping to achieve their policy objectives.

In Follow the Money (published in 2013), I contrast the top-down strategy of philanthropists supporting education reform in New York City, which has mayoral control of schools, with the relatively bottom-up strategy in Los Angeles, which has an elected school board. I argue that the strategy of philanthropists in Los Angeles was more successful for building a durable coalition with strong local buy-in for school choice. As I explain, in Los Angeles, “many of the organizations that received major foundation funding to implement reforms–including charter management organizations–developed direct relationships with local advocacy organizations and constituents.” In other words, charter schools in Los Angeles had to mobilize constituency support from the grassroots in order to maintain a political coalition. Alliances in Los Angeles often shifted, and many charter supporters felt that progress towards charter expansion was too slow. Nonetheless, I argue that this strategy is preferable to the top-down approach of New York City education reform under Mayor Bloomberg, which generated widespread community backlash. While the teachers union in Los Angeles maintained consistent opposition to charter schools in Los Angeles and funded school board candidates who shared these views, the teachers union sometimes struggled to maintain political allies in a city where charter advocates had effectively built alliances at the grassroots level. My argument in Follow the Money is that foundation-sponsored reforms are more likely to flourish in a context of lively democratic politics, which requires building grassroots alliances and compromising with opponents.

The growth in charter school enrollment during this period in Los Angeles was substantial. From the 2008-09 school year to the 2014-15 school year, the number of Los Angeles students enrolled in charter school grew from 59,120 to 151,310, representing an annual rate of growth of 17%. This growth overlapped a period when the majority of the LAUSD board of education was not majority “pro-charter” in the eyes of the most committed charter school supporters. By the 2016-17 school year, charter schools in LAUSD had added more students, reaching an enrollment of 163,720, but the annual rate of growth declined to 4%. There are certainly many potential explanations for the slowdown in charter enrollment growth in Los Angeles. Yet this slowdown also coincides with a more aggressive political strategy for promoting charter expansion among mega donors, and that strategy appears to be unsuccessful.

In 2015, a secret planning document, the Great Public Schools Now Initiative, sponsored by the Broad Foundation was exposed by the local media. Great Public Schools Now promoted the goal to place more than half of Los Angeles students in charter schools in the next eight years. With the release of this report, “hostilities rose to new heights” between charter supporters and opponents in Los Angeles. Meanwhile, campaign contributions among major donors were also on the rise. In Outside Money, we use campaign finance reports to trace contributions from large national donors to local school board elections. These donors give at least $1,000 in a single election cycle and fund at least one local campaign outside of their home state. Once donors are identified as national, they maintain that classification in all elections, because we are treating donors as our main unit of analysis. Thus, a donor residing in San Francisco who contributes to elections in New Orleans and Los Angeles would be considered “national” for both. This allows us to follow the behavior of a distinct category of education donors, and our research shows that these donors are also highly active national campaign contributors, many serve on the boards of education nonprofits such as KIPP and Teach for America, and some are education philanthropists. From 2011 to 2013, the percent of individual campaign contribution funds from large national donors to LAUSD elections grew from 13% to 48%. By 2013, large national donor contributions exceeded union funding. In the record-breaking 2017 school board election, two-thirds of campaign spending came from organizations supporting charter expansion.

Our book, Outside Money, documents some of the consequences of ramping up campaign spending with outside donations, and, as noted earlier, Los Angeles is one of our case studies. Fueled by outside donations, Los Angeles school board elections are flooded with negative campaign advertising and media coverage that focuses heavily on money in the election, rather than a wider range of issue debates. Candidates who are not aligned with either the teachers union or pro-charter school advocates have had difficulty raising funds or gaining visibility for their campaigns. If there’s a silver lining, it is this: we find some evidence that voter turnout increases slightly in LAUSD elections with higher outside spending.

Major donors who support charter expansion in Los Angeles probably viewed their 2017 campaign spending as successful; the election resulted in a “pro-charter” majority on the school board. Yet by January 2019, a teachers strike shook the district, and “privatization” and “billionaire takeover” were featured as prominent themes, allowing teachers to partly frame their strike as local resistance to outsiders. The agreement ending the strike included a provision for the LAUSD board to vote on a charter school moratorium resolution. The resolution, which was adopted by a vote of 5-1, asks the state to study changes to the charter school law and imposes a temporary moratorium on new charters while the district conducts a study. In other words, the “pro-charter” board majority has voted for a charter school moratorium, and the mobilization of teachers has reversed the policy goals of donors who spent millions of dollars on school board campaigns. Major donors might take this political setback as an opportunity to consider a hypothetical: What if they had emphasized grassroots investments five years ago, rather than developing sweeping expansion plans in secret and spending overwhelming resources in school board elections? Would the politics of charter schools in Los Angeles look different today?

Indeed, looking back on my research for Follow the Money, I think that there is a plausible alternative trajectory in Los Angeles. While outside donors tend to view school board candidates through a simple frame of “pro” or “anti” charter, the reality of Los Angeles politics is far more complex and characterized by shifting alliances. Navigating this politics requires a wide range of allies and building bridges to opponents. For example, mobilization to unionize L.A. charter schools has been a key point of contention, resulting in strong opposition from charter supporters. But allowing more charter school unionization or responding substantively to the concerns of charter teachers seeking union representation could have resulted in new alliances. The outside campaign donor strategy tends to anoint allies and enemies through the blunt instruments of electoral endorsements and funding, rather than investing in new or unlikely coalition partners. Furthermore, the donors themselves become the most vulnerable political targets once a polarizing frame takes hold. I will bet on the public image of “local public school teachers” over “outside billionaires” any day.

For billionaire donors, there are neither legal nor financial barriers to spending enormously on aligned political and philanthropic campaigns. In fact, mega donors are increasingly moving towards the formation of LLC’s, rather than traditional private foundations, which will allow more seamless coordination of philanthropic giving and political contributing to electoral campaigns. As I have written in the past, I am deeply concerned about the limited transparency of the LLC model in philanthropy. But the Los Angeles case presents another potential consequence of unconstrained mega donor involvement in politics and philanthropy—galvanizing opponents with political resources that can sometimes be more powerful than money.

-Sarah Reckhow

Sarah Reckhow is associate professor of political science at Michigan State University. For the 2018-19 academic year, she is a fellow at the Radcliffe Institute for Advanced Study at Harvard University.

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