Show me the money

Lifting the veil on education’s newest big donor: Inside Chan Zuckerberg’s $300 million push to reshape schools

Facebook CEO Mark Zuckerberg speaks in San Jose, California on May 1, 2018. (Photo by JOSH EDELSON / AFP)

Read the list of grants made by the Chan Zuckerberg Initiative that Chalkbeat has compiled.

In late 2015, Mark Zuckerberg and his wife Priscilla Chan promised to donate 99 percent of their Facebook shares to their philanthropy, which would focus part of its work on improving American education.

In the three years since, the Chan Zuckerberg Initiative has given away millions to groups working to “personalize” learning, reshape teacher training, and diversify the ranks of education leaders. But the full scope of that giving hasn’t been clear.

Now, the Chan Zuckerberg Initiative is putting a number on it: The organization has given $308 million in education grants since January 2016, when CZI took its current form. After inquiries from Chalkbeat, the organization provided that total, which has not been previously disclosed, as well as details of 19 specific grants.

The numbers offer new perspective on a philanthropy that has quickly become one of the biggest in U.S. education, thrusting itself into the ongoing debate over the appropriate role for private dollars in education policy. They also offer hints about how broadly CZI may try to extend its philanthropy in the years to come, as Zuckerberg’s billions position the organization to become even more influential. The Facebook founder, whose net worth is currently estimated at over $60 billion, is poised to transfer up to $13 billion to CZI by early 2019.

“Even given the fact it can be hard to pinpoint every dollar over time, $308 million over nearly three years would pretty easily make CZI a top-five grantmaker in pre-K-to-12 education,” said Jeff Snyder, a professor at Cleveland State University who has studied education philanthropy. Available data suggests that CZI’s donations may put it behind only the Bill and Melinda Gates Foundation and the Walton Family Foundation, he said.

(Chalkbeat receives support from the Chan Zuckerberg Initiative and other funders mentioned in this story, including the Gates Foundation, the Walton Family Foundation, and the Emerson Collective through the Silicon Valley Community Foundation.)

CZI’s education work is at an inflection point. Its head, former Obama administration official Jim Shelton, said in July that he was leaving the post. His replacement stands to become one of the most influential figures in education policy.

As for its past giving, CZI is being more open than it has ever been by providing the new data. But the organization remains one of the least transparent funders in education.

Unlike a number of other philanthropies, CZI does not publicly list its grants, instead announcing only certain awards on Facebook or in press releases.

The 19 grants that CZI disclosed to Chalkbeat account for about one-third of the $308 million it has spent on education.

As a limited liability company, CZI is not required to list donations on its tax forms, unlike private foundations. Still, the organization says its approach is changing. “We have begun sharing our learnings to date with the education community and news media as part of our commitment to transparency,” spokesperson Dakarai Aarons said in a statement. “As we continue to build our strategy and systems, we plan to share more information about our grants in the future in a way that respects our grantees and community partners.”

Based on the information from CZI, details provided by other organizations, and publicly available information, Chalkbeat compiled its own list of over 50 groups that have received grants from CZI since 2016. Of the $308 million CZI says it has given away, Chalkbeat was able to account for roughly 45 percent. (Find our full list here.)

A push for tech-based personalized learning

The organizations receiving money from the Chan Zuckerberg Initiative illustrate the scope of CZI’s efforts to personalize learning, the central focus of its known education giving. Shelton of CZI has suggested that the approach can produce massive gains in student learning; research hasn’t backed that up so far, but some programs have shown promise.

CZI’s giving includes expanding the use of technology in schools so that students can learn at their own pace or teachers can closely track student progress. CZI has also defined personalized learning as including “social-emotional and interpersonal skills, mental and physical health, and a child’s confident progress toward a sense of purpose,” as Shelton put it in 2017.

CZI has funded personalized learning efforts directly in a variety of places: statewide in Rhode Island ($1.5 million), in more than 100 Chicago-area schools ($14 million), and in a small district in California, Lindsay Unified ($775,000).

It has supported personalized learning-focused work by leadership groups Chiefs for Change ($3 million) and the Council of Chief State Schools Officers (nearly $400,000).

This includes the 19 grants that CZI provided details about to Chalkbeat.

CZI has backed efforts to infuse the concept into teacher training, including through the Woodrow Wilson Teaching and Learning Academy ($3 million), the New Teacher Center ($1.7 million), and the Harvard Graduate School of Education ($1.1 million).

CZI teamed up with the Gates Foundation to each send about $6 million to New Profit, which used that money to fund groups including iNACOL, an online learning association, and Valor Collegiate, a Tennessee-based charter network that uses a curriculum that students move through at their own pace.

CZI has built a unique relationship with Summit Public Schools, a charter network in California, which created a tool known as the Summit Learning Platform. Now being used in hundreds of schools across the country, the platform got early engineering help from Facebook and gets ongoing support from CZI.

Both CZI and Summit declined to say how much CZI has spent supporting the effort, though the details of their partnership form a long — and likely expensive — list.

Summit schools have received CZI money to launch and operate a teacher residency program and to buy and build school facilities, according to a Summit spokesperson. CZI support also allows the network to distribute its learning platform to schools, put on three free trainings each year for more than 2,500 educators, and pay for mentors who coach schools using the platform.

Expanding the definition of personalized learning and the pipeline of leaders

CZI has also supported efforts to give poor children eyeglasses through Vision to Learn ($3 million) and a partnership that includes Community in Schools ($2.2 million).

One of CZI’s priorities has been expanding what we know about how students learn, and it’s backed research on the science of learning by both the Learning Policy Institute and Turnaround for Children ($7 million).

It has funded initiatives focusing on non-academic skills, including the Character Lab — led by Angela Duckworth, the professor who popularized the concept of “grit” — and the Collaborative for Academic, Social, and Emotional Learning ($750,000).

CZI awarded $750,000 over two years to Common Sense Media to review the privacy protections offered by education technology products.

The College Board won nearly $14 million for initiatives including expanding access to SAT practice using Khan Academy; an expansion of AP computer science courses, particularly in rural areas; and a college advising program.

CZI has also placed a major emphasis on growing the number of leaders of color in education, with grants to Teach For America ($10 million), The Surge Institute ($1 million), Camelback Ventures, Education Leaders of Color ($300,000), and Latinos for Education.

CZI has supported media and communications ventures, too, including personalized learning and other coverage at EdSurge (at least $700,000), a video series on social and emotional learning by Edutopia ($500,000), and “future of learning” coverage by The Hechinger Report. Education Post, a communications firm and blog, netted $1 million from CZI, half of which went to its California-focused outlet. Chalkbeat received a $250,000 grant from CZI in 2018; the grant is not for a coverage of a particular topic.

The grants illustrate how Chan and Zuckerberg have adjusted their approach since their first major foray into education philanthropy, a $100 million gift to Newark schools in 2010. Used to expand charter schools and implement a performance pay system for that city’s teachers, the donation proved deeply controversial.

Although CZI has given to traditional districts, other grants remain tied to charter schools. In addition to its work with Summit, it has donated to the Charter School Growth Fund and given at least $5 million to New Schools Venture Fund, which supports charter schools and efforts to grow the number of leaders of color in education. Achievement First, a charter network, got $350,000 for its “Greenfield” schools, which have an online learning component.

Meanwhile, CZI continues to be involved in Newark. Chalkbeat reported last month that CZI provided funding meant to ease the school district’s transition from state to local control.

Big influence but limited transparency

The Chan Zuckerberg Initiative’s recent giving vaults CZI into the top echelon of education funders, though it remains behind the Gates Foundation and Walton Family Foundation for now. Whereas CZI averaged a bit over $100 million in grants each of the last three years, Walton spent $191 million on U.S. education programs in 2016 and the Gates spent about $367 million.

That kind of funding is dwarfed by the public dollars spent on education. But philanthropic money can have an outsized influence on policy: think the rapid spread of teacher evaluation changes, the Common Core standards, and charter schools, all catalyzed by funding from major philanthropies in the last decade.

For now, the entirety of CZI’s grantmaking strategy is unknown. A number of organizations that Chalkbeat contacted declined to say how much money they’ve received from CZI or whether they have received funding at all.

That level of transparency differs from the two biggest foundations in U.S. education. The Gates Foundation has a searchable database of grants going back many years. The Walton Family Foundation posts annual giving reports reaching back to 2009. Other philanthropies, like the Broad Foundation, are somewhat less transparent — listing current grantees but not amounts, for instance, though more detail can be found on tax forms.

Chan Zuckerberg differs from those foundations in key ways, some reflecting changing preferences among philanthropists.

Unlike the Gates, Walton, and Broad foundations, CZI is a limited liability company. That allows it to make political donations, invest in for-profit companies, and not disclose the compensation of its top leaders. CZI is not alone in this approach: The Laurene Powell Jobs-funded Emerson Collective is also an LLC.

CZI says it has not made political donations pertaining to its education work. It has invested in a number of for-profit businesses, though, including RaiseMe, a software platform aimed at helping students access information about college scholarships; Ellevation, a product to help teachers of English language learners; and Panorama Education, which provides student surveys. Any profit earned will be put back into the organization, CZI says.

“Just constraining yourself to only nonprofit giving cuts off a lot of good options,” Zuckerberg told Education Week in 2016. “I believe that companies can do a lot of good stuff in the world.”

A complicated funding web

Adding a layer of complication, CZI has given much of its $308 million in education grants through a “donor-advised fund” at the Silicon Valley Community Foundation — an increasingly popular but controversial strategy offering tax benefits for funders and little transparency.

Such community foundations allow donors to reap substantial tax benefits by donating stock; Chan and Zuckerberg have given the Silicon Valley Community Foundation about $1.75 billion worth of it. CZI directs the community foundation to make grants, and those donations are listed on the community foundation’s tax forms and its website.

But, crucially, those disclosures don’t indicate which fund makes which donation — meaning grants directed by the Chan Zuckerberg Initiative through SVCF are not distinguishable from those made by more than 1,000 other funds.

For instance, the Silicon Valley Community Foundation lists $35 million, $20 million, and $16 million grants made to Summit Public Schools in 2016 and 2017, but offers no information on which fund made the donations.

The result of this trend? “Even as we’ve entered a period in which more donors are writing bigger checks to promote this or that cause, it’s become ever harder to follow the money,” Inside Philanthropy editor David Callahan wrote in a 2016 piece highlighting the rise of donor-advised funds. (He praises the Silicon Valley Community Foundation’s database of grants, while noting that it “doesn’t give us any clue” who is behind the donations.)

Those donor-advised funds also do not have to give away a specific share of their assets each year, unlike private foundations, which must donate 5 percent — a setup that has prompted criticism that they allow money meant for charity to sit idle.

To defenders, these funds are just a new vehicle for helping nonprofits improve their communities. The Silicon Valley Community Foundation says its donor-advised funds with more than $1 million pay out an average of over 15 percent each year.

Snyder of Cleveland State University said this new breed of philanthropy raises fresh questions about how groups like the Chan Zuckerberg Initiative will use their influence.

“Traditional philanthropy from private foundations has been critiqued for being anti-democratic, yet LLCs such as CZI have opportunity to be even more emblematic of this concern,” he said.

“That’s really the question: Can LLCs simultaneously be freed from constraints that are supposed to ensure they work in the public interest, and evolve into institutions that democratically work with communities they seek to shape?”

Amanda Zhou contributed reporting. Graphics by Sam Park.

Face-to-face

In ‘speed dating’ exercise, Detroiters grill school board candidates about third-grade reading, charter schools

PHOTO: Erin Einhorn
Corletta Vaughn, a candidate for Detroit school board, speaks to Detroiters at a forum Thursday evening as Nita Redmond (center) looks on. Vaughn says the district should be open to collaboration with charter schools and suburban districts.

On its face, the public forum Thursday night was about candidates for Detroit school board. In fact, the night belonged to the citizens.

Early in the evening, a tableful of Detroiters — most of them graduates of Detroit public schools, all of them concerned about the future of Michigan’s largest school district — set about deciding what they wanted to ask the candidates during a series of Q&A sessions that CitizenDetroit, which co-sponsored the forum with Chalkbeat, called “speed-dating.”

Shirley Corley, a first-grade reading teacher who retired from the city’s main district, honed in on the state’s “read-or-flunk” law, which could force schools in Detroit to hold back many of their third graders next year if they can’t pass a state reading exam.

“I heard that one on the TV, and I couldn’t believe my ears,” she said.

As a gong sounded, she hurried to shape her outrage into a question: “What are your plans about holding back third-grade readers, and why aren’t they reading better?”

Then Terrell George, one of the candidates for two openings on the school board, sat down across the table. She asked her question.

All across a packed union hall in Detroit’s historic Corktown neighborhood, similar scenes were playing out. Candidates rotated between tables, where they sat face-to-face with roughly 10 Detroit residents armed with prepared questions and many lifetimes-worth of combined experience with the city’s main school district. Every five minutes, someone hit a gong, and candidates got another chance to lay out their vision for the troubled district and impress the voters who will decide their future at the polls in November.

It is Detroit’s first school board election since the board regained control of Michigan’s largest district, which was run for nearly a decade by state-appointed emergency managers. And it marks a crucial milestone in the district turnaround effort led by Superintendent Nikolai Vitti, whose reforms have so far enjoyed the board’s support.

(Six of the nine candidates attended the event. Deborah Lemmons and M. Murray [the full name listed on the ballot] didn’t respond to an invitation, according to CitizenDetroit. Britney Sharp said she had a scheduling conflict and was unable to attend.)

From Natalya Henderson, a 2016 graduate of Cass Technical High School, to Reverend David Murray (his legal name), a retired social worker and minister who previously served a long, sometimes controversial stint on the school board, a broad field of candidates are vying to help steer a district through a historic turnaround effort. The winners will help decide what to do about the $500 million cost for urgent school renovations and test scores that are persistently among the worst in the nation.

(Click here to watch the candidates introduce themselves in two-minute videos, and here for short bios.)

candidate statements
PHOTO: Koby Levin
Deborah Hunter-Harvill, the lone incumbent running for school board, makes an opening statement. Candidates made one-minute opening statements, then rotated through a roomful of 130 people answering questions about their plans for the district. From left: Corletta Vaughn, Shannon Smith, Natalya Henderson, Hunter-Harvill.

The low scores are the reason the state’s third-grade reading law, which calls for students reading below grade level to be held back, will disproportionately affect Detroit. But at Table 1, Corley gleaned some hope from George’s answer to her question about the law. He said more attention should be paid to early literacy instruction: “We must start from the beginning in preschool and kindergarten.”

Corley shook her finger in approval: “That’s right.”

On the other side of the table, Viola Goolsby wanted to know how George would respond if the state attempted to close the district’s lowest-performing schools.

“I would be opposed to any school shutting down any school in any district…” George began.

Then the gong sounded. “That was quick,” George said, standing up.

The table had a five-minute break — with roughly 130 people in the room, there were more tables than the six candidates who attended — and then another candidate, Corletta Vaughn, slid into the seat reserved for candidates.

Lewis EL, a realtor who works in Detroit, read a question from the list provided by Chalkbeat and CitizenDetroit, the non-profit that hosted the event: “What are the pros and cons for the district in collaborating with charters and suburban school districts?”

Vaughn’s voice fell: “I firmly believe that the district alone is without resources. We just don’t have it. So I would like to see a collaboration.” She said other districts could help Detroit train its teachers: “I think we have to do a better job in terms of exposing our teachers to better development.”

“Are they not coming with that knowledge already?” Lula Gardfrey asked.

“But I think that we can support them more,” Vaughn replied. “Our students have mental health issues. They have economic issues. Just what the teacher learned in school isn’t going to be enough when that child arrives at 8 a.m. in the morning.”

detroiters
PHOTO: Koby Levin
Shirley Corley and Lula Gardfrey work on the questions they planned to put to candidates for Detroit school board.

When the gong sounded again, Nita Redmond felt torn. She believed Vaughn had good intentions but was suspicious of any collaboration with charter schools.

The rise of charter schools, which enroll about one-third of the city’s 100,000 students, “should have never happened,” she said. “It seems like it has lowered the regular schools.” When another candidate, Shannon Smith, joined the table, Corley got to hear a different take on her question about the third-grade reading law.

“We need to communicate with parents,” Smith said. “There are a lot of parents that aren’t aware. Second, we need to work together with the administrators and the teachers on the curriculum, and figure out which curriculum would best support the students in reading.”

On the opposite side of the hall, another table asked Deborah Hunter-Harvill, the only incumbent in the race, about her plans for improving instruction in the district.

“Because nationally we’re at the bottom in reading and math, I start from the bottom,” she said. One of our policies is that parents attend parent training free to understand what their kids are being taught. All of our parents don’t come, but if you just get 40 in one classroom in one day, they go home and tell other parents.”

Theresa White had a seat right next to Hunter-Harvill, and she liked what she saw. “That has been a culprit, the lack of participation by parents,” she said.

In the next seat over, Rainelle Burton, who attended high school in Detroit and has lived in the city for decades, came to a different conclusion.

“I’m not hearing anything that says, ‘this is inventive and creative,’” she said.

The up-close-and-personal format didn’t make things easy for the candidates.

“It was definitely not comfortable,” Vaughn said, adding that she wished she’d had access to the pre-written questions beforehand.

reverend david murray
PHOTO: Erin Einhorn
Reverend David Murray, who served on the school board member for 16 years during a period when the district was largely controlled by emergency managers, said those managers were responsible for the district’s decline.

But for voters in the room, the format made things easy. In a straw poll after the event, virtually everyone in attendance said they planned to vote.

“We were able to talk to them one-on-one, it’s not just looking on TV,” Nita Redmond said, adding that she came away with a good idea of who would get her vote (she declined to say who). “We were able to talk to them and evaluate ourselves if this would be the best person to lead my district.”

Surveying the room as the forum wound down, Michelle Broughton was of two minds. She carries with her four generations of experience with the district — she is a computer instructor at Renaissance High School, her father graduated from Chatsey High School, a Detroit Public School, in 1961, her children attended the district, and her grandson is in the eighth grade at McKinsey Elementary — and she said she’d heard a lot of what she called “pie-in-the-sky” ideas at the forum.

No one had offered a solution for the roughly 90 classrooms in the district that were without a teacher on the first day of school — a problem that had affected her family in the past.

“If my child goes to school every day and comes home and says, ‘Grandma, I don’t have a math teacher,’ that child is losing weeks,” she said.

But she said the event gave her a feel for the candidates — and reminded her how many Detroiters share her dream of a thriving school district.

“I’m here because I have hope,” she said. “I see a brighter future, and I hope that I pick somebody who will help.”

Future of Schools

Here’s how new federal rules could impact Indiana’s $14M private school tax credit scholarship program

PHOTO: Dylan Peers McCoy
Students at the Oaks Academy in Indianapolis, a private school, play during music practice. The Oaks accepts tax credit scholarships.

Some school choice advocates are uneasy that new federal tax rules could be detrimental to Indiana’s $14 million tax credit scholarship program.

In August, the U.S. Department of the Treasury released rules clarifying new tax law that limited how much state and local taxes an individuals could deduct from their federal taxes. Some fear the changes might discourage donors from contributing to charities like the state’s tax credit scholarship program, in which individuals and businesses can give money to fund students’ private school tuition in exchange for a tax credit from the state.

“Our primary concern is to make sure that the families who are relying on these scholarships, that they can continue to do so,” said Leslie Hiner, vice president of legal affairs for EdChoice, a national school choice advocacy organization based in Indianapolis. “There are a lot of unknowns.”

Jerry Stayton, superintendent of Elkhart Christian School, submitted a public comment about the regulations saying the scholarships are vital to helping private schools stay afloat and give opportunities to low-income families. The tax incentives have “encouraged giving to schools on a scale never before seen.”

“For the federal government to impose a tax on a state tax credit represents a strange and dangerous precedent,” Stayton wrote. “While the federal government is supreme in the United States, its strength is derived from strong, growing, supportive states with great local economies and excellent education.”

There’s optimism, though, that the regulations’ impact could be far more limited in Indiana than in other states,  given how established its scholarship program is, how low income taxes are here, and how many donors are individuals making smaller contributions.

“So far, Indiana is in a better position, I’d say, than some of the high-tax states,” Hiner said. “Nonetheless, that uncertainty is the thing … I have a lot of faith that people in Indiana, and I’m hoping, that any impact in Indiana because of its long history of charitable giving will not be great.”

Below, we break down how this news could impact Indiana’s school choice programs, as well as how the program works and got its start.

First, what are tax credit scholarships?

Indiana’s tax credit scholarship program, which lawmakers passed in 2009, lets taxpayers donate money to nonprofit, state-approved “scholarship granting organizations” in exchange for a 50 percent credit on their state taxes.

Those donations are then distributed to the nonprofits and given out to income-eligible Hoosier families as private school tuition scholarships. To participate, a family of four can’t make more than $92,870 per year.

In 2018-19, the program could distribute as much as $14 million in tax credits, though the amount that can be donated has no cap. Indiana’s tax credit cap has steadily increased up from $2.5 million since 2009.

While the use of vouchers far outstrips the tax credit scholarships, the program is still sizable. It serves 348 private schools across the state. In 2017, the program awarded 9,349 scholarships totaling more than $16 million.

The National Conference of State Legislatures reports that as of 2017, 17 states had tax credit scholarship programs. The largest one in the country is in Florida, where many corporations participate and the program collects and doles out hundreds of millions of dollars each year.

Is the program controversial?

Yes, though it gets far less attention than Indiana’s voucher program, where families use state tax dollars to pay for private school tuition. It also predates vouchers, which weren’t allowed in the state until 2011.

Tax credit scholarship supporters say the donations benefit students in need who otherwise could attend the school of their choice. They also argue the programs can results in savings for states, as the cost for the tax credits is lower than the cost to educate students in public schools.

Critics of the program say it’s just another version of state-subsidized private school, not unlike vouchers. They also point out it is unclear whether these programs allow states to save money — partially because data on where students go to school and how they transfer between public and private schools can be hard to track.

In Indiana, students do not need to have attended a public school before receiving a tax credit scholarship, and the scholarships can pay up to the full tuition amount at their desired school.

What’s the IRS rule change that is causing the concerns?

It comes in response to a part of the 2017 federal tax bill that limited how much state and local taxes someone could deduct from their federal taxes — up to $10,000. Hiner said federal officials proposed the change to allow the government to get more revenue. Giving fewer opportunities for deductions means the government collects more in tax dollars.

In order to get around the $10,000 cap, some high-tax states, such as New York, California, and New Jersey, took advantage of tax credit programs. As a result, the IRS proposed new rules that prohibit the tax credit workaround, and that’s what has school choice supporters up in arms.

“The IRS had a good reason for taking action, but unfortunately in taking action against those bad actors, they swept in thousands of nonprofits across the country,” Hiner said.

How will the rule change affect Indiana?

Advocates hope is that Indiana won’t take as big a hit as other states with higher taxes.

In a press release, the treasury department said most taxpayers will not be affected by the change, with about 1 percent of taxpayers seeing “an effect on tax benefits for donations to school choice tax credit programs.”

It’s really not clear yet if that will come to pass, Hiner said, because taxes won’t be filed until next year. No one can really say now how donors might change their behavior.

The state-approved nonprofit “scholarship granting organizations” that manage private tuition scholarship funds are already fielding questions from donors. Indiana has seven such organizations, six of which are currently granting scholarships.

“The one thing we’re stressing with everyone is to always contact your accountant, financial advisor, or tax preparer to walk through what the impacts could be,” said Betsy Wiley, executive director of the Institute for Quality Education, one of the state’s scholarship granting organizations.

But in Indiana, according to an analysis from CNBC, taxpayers on average don’t claim deductions over $10,000. While the rule change could impact corporations or very large individual donors, most Hoosiers don’t fall in those categories. The vast majority of donors are individuals, and 43 percent of those donations are for less than $1,000, Wiley said.

Wiley hopes the federal government decides to pause implementing these new rules until after taxes for 2018 are filed. This would give donors and nonprofits more time to understand what the effect might be so they can adjust at the state level.

Federal officials are collecting feedback through November, when there will be another hearing on the rules.