Recently the San Francisco Chronicle carried a story about a corporation donating $17 million to the San Francisco and Oakland Unified School Districts. Philanthropic support of public schools sounds good but what is the impact? Less than meets the eye.
School budgets are very big. As Melinda Gates has pointed out, California’s annual spending on K-12 is double the Gates Foundation’s assets. The corporation’s gift is about 1 percent of the $1.5 billion the San Francisco and Oakland school districts will spend this year.
But even a much larger gift would make little difference. That’s because the rules that govern California’s public schools are unlike those employed by successful enterprises. Lifetime employment is offered after just 18 months of teaching, principals have to go through impossible hoops to terminate underperforming employees and can’t pay more to employees who perform better and/or take on tougher tasks, school boards must lay off teachers in reverse seniority and aren’t prevented from robbing classrooms to provide extra insurance to retirees on Medicare, and more. Can you think of a single enterprise that provides great products or services to customers while operating under similar rules? I can’t.
Gross revenues aren't the problem. After a 30 percent income tax increase and 10-year bull market, gross revenues provided public schools have risen sharply. But student performance hasn't risen alongside:
That’s in part because more and more of schools' gross revenues are being diverted from classrooms to pensions and retirement subsidies. This year SFUSD and OUSD will spend ~$150 million on those costs, double five years ago. But as much or more it’s because of restrictive rules that inhibit student performance. Changing those rules can only be accomplished by reforms passed by at least 62 members of the state legislature, plus the governor’s signature. It is in Sacramento where a different form of philanthropy can make a big difference.
Individuals can donate up to $4,700 per state legislator per election and $7,800 per year to committees that donate to state legislators. Those donations are not tax deductible but they are hundreds of times more powerful than charitable donations because they can translate into rule changes. That's why special interests focus so much attention on those types of donations to legislators.
Many of the state’s 120 legislators would like to change the rules governing California's public schools but fear the reaction of government employee unions that benefit from the status quo. Constant donations from political philanthropists help give legislators the confidence to vote their consciences and represent their districts.
Charitable donations can provide value (my wife and I donate to programs benefitting SFUSD students) but no one should mistake them for the tough political choices required to seriously improve California’s public schools. Only when all of us are willing to send not just our money but our kids and grandkids to San Francisco’s and Oakland’s public schools will we know those tough choices have been made.