A major new player in education giving, The City Fund uses over $100 million in grants to grow charter and charter-like schools

The newest major player in school reform has already issued more than $110 million in grants to support the growth of charter and charter-like schools across the U.S.

The City Fund’s spending, detailed on a new website, means the organization has quickly become one of the country’s largest K-12 education grantmakers. The money has gone to organizations in more than a dozen cities, including Atlanta, Baton Rouge, Denver, Memphis, and Oakland.

The spending is evidence that The City Fund’s brand of school reform continues to attract major financial support — and may foretell more battles over education politics in those cities.

The City Fund “is being led by an incredibly well-connected group of people,” said Sarah Reckhow, a Michigan State University professor who follows education philanthropy and politics. “If a district’s name is on this list, then yes, you would expect some things to happen.”

The City Fund’s strategy is to grow the number of schools, including charters, run by nonprofits rather than traditional school boards. Advocates say that shift will help low-income students of color, pointing to academic improvements in virtually all-charter New Orleans as one example. Critics argue that strategy undermines teachers unions, democratically elected school boards, and existing public schools.

Overall, The City Fund says it has raised $225 million, largely from Netflix founder Reed Hastings and Texas philanthropist John Arnold. (Chalkbeat is funded by Arnold Ventures.) The organization has also created a political arm, Public School Allies, which has raised $15 million from Hastings and Arnold to support officials vying for state and local office.

In a speech in December, Hastings, who is also on The City Fund’s board, spelled out his vision.

“Let’s year by year expand the nonprofit school sector,” he said. “We know the school district is probably not going to like it, but we’re not against them. We’re for good schools, period. If there’s a very high-performing school district school, let’s keep it. But the low-performing school district public school — let’s have a nonprofit public school take it over.”

The City Fund is supporting city-based organizations and charter networks

The City Fund is spending its money to promote the growth of charter schools as well as hybrids where charter operators or other nonprofits lead schools under the auspices of school districts. Examples include Indianapolis’ “innovation network” schools, “renaissance” schools in Camden, New Jersey, and turnaround schools in Atlanta.

That is connected to an approach to running schools referred to as the “portfolio model.” Under this approach, schools that succeed are encouraged to grow; those that fall short are closed or turned over to new management. Schools are often run by nonprofit boards who hire staff, who are rarely unionized, while districts oversee centralized functions like enrollment.

New Orleans, Denver, and Indianapolis’ central school district have adopted many elements of that structure, and The City Fund has given to groups in each.

The Denver nonprofit RootEd netted a $21 million grant. The Mind Trust in Indianapolis, previously run by City Fund partner David Harris, got $18 million. New Schools for New Orleans, previously run by City Fund partner Neerav Kingsland, won $7 million. (These and many other grants are for multiple years.)

In turn, these organizations have doled out their own grants to local parent groups, teacher training organizations, political action committees, and charter networks, among others.

The City Fund has supported groups in cities that haven’t already embraced the portfolio model, too. In Oakland, The City Fund has given to a local parent group (Oakland Reach), a charter network (Education for Change), and an education-focused nonprofit (Educate78).

In Nashville, it’s backed charter schools and networks, including KIPP Nashville, Nashville Classical Charter, RePublic Schools, and Valor Collegiate.

The City Fund has also made large grants to nonprofits in Atlanta ($2.75 million to redefinED); Baton Rouge ($13.49 million to New Schools for Baton Rouge); Memphis ($5 million to the Memphis Education Fund); Newark ($5.33 million to the New Jersey Children’s Foundation); St. Louis ($5.5 million to The Opportunity Trust); and San Antonio ($4.98 to City Education Partners).

A handful of grants have gone to national groups, like $2 million to the pro-charter 50CAN and $875,000 to the Center on Reinventing Public Education, a University of Washington think tank that has studied and promoted the portfolio model. Smaller grants have gone to nonprofits in other cities, including Boston and Minneapolis.

All told, The City Fund’s grants are of similar magnitude to the Chan Zuckerberg Initiative’s annual education giving, and about half the size of the Walton Family Foundation’s annual K-12 education giving. (Walton also backs The City Fund, and CZI and Walton are both supporters of Chalkbeat.)

Janelle Scott, a Berkeley education professor, noted that many of The City Fund’s large grants are for general operating expenses, crucial for nonprofits. “This is an attempt at institution building,” she said.

Kingsland, who declined an interview request but answered questions by email, said the group’s emphasis is supporting local organizations. “Our goal is to work with local leaders in the cities so that every child has access to a high-quality school, regardless of governance,” he said. “The goal is 100% great public schools.”

Why the approach is controversial, and in some cities facing backlash

In some of The City Fund’s target cities, the political winds are shifting in ways that could complicate its efforts.

Denver, for example, has pursued portfolio-style reforms for well over a decade. But union-backed candidates recently took control of the school board. Since then, the board has effectively halted closures of low-performing schools and a working group has recommended scrapping the district’s system of measuring school performance.

“The new local school board has expressed skepticism on certain aspects of the reforms, such as intervening in lower performing schools,” said Kingsland. “To the extent this skepticism is widespread within Denver and across other cities, that will be an important sign on which types of policies are sustainable and which are not. Ultimately, we only want to support policies that are backed by local leaders.”

In Indianapolis’ central school district, two critics of the innovation schools model were recently elected to the school board. And nationally, charter schools face challenges as more states and cities limit their growth and support among Democrats wanes.

“Charter schools are more polarized both in local politics and national politics,” said Reckhow.

Critics note that the growth of alternative schools can place financial strain on existing schools and can lead them to close. Both Oakland and St. Louis are facing district school closures now.

For districts, it comes down to “how much they can absorb new schools without having to close existing schools,” said Reckhow. “Closing existing schools is unpopular.” (Kingsland acknowledged those financial pressures, and said The City Fund will help local leaders with financial planning and to push for more overall school funding.)

In elections where The City Fund’s political arm has gotten involved, the local teachers union has often been on the other side. Charter schools are rarely unionized.

The City Fund makes its case

The key argument made by The City Fund is a straightforward one: its approach works.

The organization’s new website cites evidence that nonprofit charter schools in urban areas outperform district schools, that district students aren’t hurt academically by charter expansion, and that in New Orleans and Washington, D.C., where charter schools have rapidly grown, overall student performance has improved. These claims are generally supported by research.

But it’s hard to say whether overall changes in performance in certain cities are due to portfolio-style policies or other reasons, like the infusion of more money into schools in New Orleans post-Hurricane Katrina.

And The City Fund omits other research that is less favorable to its approach, including a study of the Achievement School District in Tennessee, in which charter operators attempted to turn around struggling schools, predominantly in Memphis. This initiative, led by Chris Barbic, now a City Fund partner, did not produce gains in student achievement.

Another study in Atlanta, again looking at charter takeovers of low-performing district schools, showed mixed results after two years.

Kingsland said the Memphis results were disappointing and reflect “the challenges of whole school turnarounds,” while the study in Atlanta was early and based on a small number of schools.

Meanwhile, Hastings argued in a recent speech to a Louisiana business group that having nonprofits run schools promotes stable leadership. He repeatedly pointed to the widely cited statistic that big-city schools superintendents leave every three years as evidence. But this figure is not accurate. Superintendents of large districts turn over about every six years or so, according to a recent analysis.