Don’t Trust Jeff Bezos’s Preschool Philanthropy Scheme

Originally published in In These Times on September 19, 2018.
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The CEO of Amazon and the world’s richest man declared this month that he’ll be wading into the waters of philanthropy. In a high-profile announcement, Jeff Bezos described his vision for a “Day One Fund”—a $2 billion investment in organizations that provide homelessness assistance, and a new network of nonprofit preschools in low-income communities. This charitable gift will amount to just 1.2 percent of his net worth.

Bezos joins fellow tech billionaires Mark Zuckerberg, Bill Gates and Reed Hastings in championing corporate-style reform of American education. “We’ll use the same set of principles that have driven Amazon,” Bezos said of his future preschool chain. “Most important among those will be genuine, intense customer obsession. The child will be the customer.”

Preschool is a particularly appealing area for those who like conceptualizing problems in terms of market potential. Several years ago, a U.S. Chamber of Commerce affiliate reported that every dollar invested in high-quality early childhood education yields savings “from $2.50 to as much as $17 in the years ahead.” University of Chicago economist and Nobel Prize winner James Heckman published research in 2009 finding high-quality preschool can yield a 7-to-10 percent annual return.

Preschool is also one of the most popular target-areas for champions of “Pay for Success”—a branch of so-called impact investing which took off under the Obama administration. Under Pay for Success, private funders front money for social programs, and the government pays the investors back with interest if certain predetermined goals are met. Chicago launched a Pay for Success preschool program in 2014, funded by Goldman Sachs, Northern Trust and the J.B. and M.K. Pritzker Family Foundation. These private groups aim to roughly double their investment over the next 18 years.

It’s not clear at this point how Bezos’s Day One Fund will be structured; whether it will be a traditional family foundation like the Gates Foundation, some sort of limited-liability company like the Chan Zuckerberg Initiative, or perhaps one of the increasingly controversial “donor-advised funds” that other tech titans have embraced. CNBC reports that between thirty to fifty percent of Bezos’s gift could be tax-deductible.

It’s also not clear why exactly he chose this month to announce his plans, but it’s possible that Bezos is trying to improve his image, which has taken a public beating over the past year. This past June, the Seattle City Council rolled back its so-called “Amazon tax” which councilmembers had passed unanimously four weeks earlier. The tax, meant to generate new revenue to address the region’s growing homeless crisis, would have required Amazon to pay about $12 million per year in new taxes. The company helped fund an aggressive, unpopular, and ultimately successful campaign to repeal it.

Vermont Sen. Bernie Sanders has also been targeting Bezos, specifically on the gulf between the CEO’s ever-increasing wealth and the low-wages of Amazon’s many thousands of employees, who rely on all sorts of government aid to supplement their income. This month, just days before Bezos made his philanthropic announcement, Sen. Sanders and California Rep. Ro Khanna introduced new federal legislation to force large companies to help shoulder the cost of social services for low-paid staff. More than anything, though, the bill is understood as a vehicle to spotlight the issue of inequality between rich owners and their workers. It’s unsubtly named the Stop Bad Employers by Zeroing Out Subsidies Act, or “Stop BEZOS” for short.

While he’s offered little detail as to how he’d treat the educators in his forthcoming preschool network, Bezos’s other businesses offer some hints. The median compensation of Amazon’s more than 566,000 global employees at the end of 2017 was $28,446. Thousands of Amazon workers in Europe launched a strike this past summer to protest their working conditions, following an exposé of a journalist who had toiled undercover at an Amazon warehouse. Workers in Minnesota also demanded safer Amazon conditions this past summer, alleging dehydration, injuries and exhaustion on the job. A spokesperson for the company dismissed the employees’ complaints, calling theirs a “positive and accommodating” workplace.

The national median income for preschool teachers in 2016 was $28,570. While a growing number of education policy experts have called for increasing salaries as a way to attract and retain better teaching talent, there’s no guarantee that Bezos’s “customer” focused-model will prioritize competitive wages.

And to put Bezos’s gift in perspective, Head Start, the federal government’s high-quality early-childhood education program which serves nearly one million low-income children every year, runs on a strained budget of more than $9 billion annually. Bezos’s Day One Fund, meanwhile, is $2 billion, to be divided amongst both pre-K and homelessness.

Let’s be clear about the scale of the problem. In 2016, just 42 percent of 3-year-olds and 66 percent of 4-year-olds in the United States were enrolled in preschool programs, and these figures were not measurably different from the percentages enrolled in 2000. Demand for early childhood education far exceeds existing capacity in this country, and the cost to change that will require significantly more than what Bezos has so far offered to contribute.

The world’s richest man may sincerely view his new philanthropic project as a way to positively impact the world, but what we know is that Bezos has built up his company and personal fortune by aggressively avoiding taxes for years. In 2017 alone, Amazon paid literally nothing in federal income tax, while reporting $5.6 billion in U.S. profits.

Instead of creating his own new private network, which might run in direct competition with Head Start and other existing state programs, Bezos could help the government expand its proven models: A combination of higher taxes and philanthropy could help early childhood educators cover the cost of school supplies, help program providers extend their school days, construct and refurbish school buildings, supplement teacher salaries, and improve teacher training programs. There are even Montessori-inspired Head Start programs, the progressive pedagogical model Bezos seems most interested in expanding on his own.

Giving more kids access to good schools can be an uncomfortable thing to criticize. But we have to be able to recognize when something even seemingly generous is nowhere near enough. Last year Bezos said he wants his philanthropy to help “people in the here and now.” This month he said he wants to ensure our great-grandchildren have “lives better than ours.” Whether he means it or not, it’s on all of us to push for more.

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Education Interviews, 2016

I published six education Q&As this year. I’d recommend all of them 🙂

1. Learning from History: The Prospects for School Desegregation9780226025254
 An interview with historian Ansley Erickson

2. The Economic Consequences of Denying Teachers Tenure
An interview with economist Jesse Rothstein

3. 
It’s Not the Cost of College — It’s the Price
An interview with sociologist Sara Goldrick-Rab

4. How to Stop For-Profit Colleges
An interview with sociologist Tressie McMillan Cottom

516yzaplyl-_sx332_bo1204203200_5. Pulling Back the Curtain on Education Philanthropy
An interview with political scientist Megan Tompkins-Stange

6. College, the Skills Gap, and the Student Loan Crisis
An interview with economist Marshall Steinbaum

CeEreKsWoAAnbjJ.jpg           9780226404349

Q&A: Pulling Back the Curtain on Education Philanthropy

Originally published in The American Prospect on September 21, 2016.
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Private foundations give millions of dollars to public education every year, but these powerful institutions typically operate behind a curtain of secrecy. In a new book, Policy Patrons: Philanthropy, Education Reform, and the Politics of Influence, University of Michigan public policy professor Megan Tompkins-Stange sheds new light on the role philanthropy plays in public education, particularly in the arena of charter schools and other market-based reforms. 

Tompkins-Stange spent five years conducting confidential interviews with foundation insiders at the Ford Foundation, the W. K. Kellogg Foundation, the Bill & Melinda Gates Foundation, and the Eli and Edythe Broad Foundation. Analyzing their diverse, and sometimes competing, approaches to grant-giving, she raises important questions about the influence that philanthropic interests wield in American education and public life. This is an edited transcript of that interview.

Rachel Cohen: You chose to dive into a controversial topic—education reform. What kind of feedback has your book received?

Megan Tompkins-Stange: Honestly I was really scared building up to the book’s release date, especially since I am a junior scholar. For months I was like, what am I doing? Why did I decide to do this? I was terrified. But honestly, most of the response to the book has been really supportive and positive, including from the foundations. I still haven’t heard anything from the Broad Foundation, but I’ve also heard from retired teachers, and people who experienced some of the politics first-hand.

One major critique I’ve received is that I’m not vocal enough about whether philanthropic giving is good or bad. But I did this intentionally—I wanted it to be accepted as an academic and empirical book, as opposed to a piece of advocacy. I’ve taken a more critical stance in the press though, I’m now more comfortable to do so.

Your book talks about the secrecy of foundations. Can you say more?

Foundations are private nonprofit corporations. There’s very little they have to do in order to be accountable to the public. They publish their tax forms, they have their 990s. They’ve established some professional norms over the past 50 years, so many will publish their grants in a database, or put out annual reports. That’s more just good practice, though. Foundations don’t have boards that are democratically accountable, and they are very private by nature of their organizational form. They don’t have to talk to anyone.

Of course, the argument that comes up again and again is, well is that a good thing? That’s a debate that’s gone on for many years. My position is that foundations need to be much more legally accountable. They have enough power in the public realm that they need to be held to some accountability procedures beyond the ones they institute on their own. That could be a formal mechanism, or creating space for people to weigh in on efforts they’re pushing that will impact the public at large. They could have boards with some kind of public member component, or make some investments subject to an external review.

People often lump the Gates and Broad Foundations together, but you explore some differences between these two education reform-friendly foundations.

Eli Broad is the only person to have founded two Fortune 500 companies, and part of his theory of change is about getting the right people into the right positions. So Broad focuses on pipelines: training superintendents, creating leadership positions for individuals to then shape school districts. He very intentionally talks about “venture philanthropy” and having “dramatic results” and creating “transformative breakthroughs.” The Broad Foundation moves unapologetically with urgency; that is their core value.

Gates is a little more skittish about where the public stands on them, they’re more careful. They have legions of lawyers who work to make sure their advocacy doesn’t cross any line. The Gates Foundation also has a sense of urgency, but they’ve always been a bit more cautious. Some people say this may be due to some things Microsoft went through with antitrust—Bill Gates has always just been much more public and attracts more criticism and critique than Eli Broad.

Many supporters of the Common Core insist that the standards originated from the states, not the federal government. Your book recounts the many ways in which they were actually pushed forward by the Gates Foundation, on both the state and the federal level.

Gates was very much about building up the power at the state and local level, and then bringing in the federal government. That was their strategy, and the main way they did that was by getting all the governors on board in ’08 and ’09. Gates made huge grants to The Council of Chief State School Officers and the National Governors Association designed to build political will.

The grants were basically for instituting standards, educating the public, and research. It was all very above-board, but they really played that convener role to get everyone on the same page. Their strategy was to give money to elites to move the effort efficiently and quickly.

HistPhil, a blog about the history of philanthropy, hosts debates about what’s changed in the modern landscape of philanthropic giving. Your book describes some shifts in education philanthropy over the past few decades. What do you think has changed?

HistPhil is such a valuable website, I really appreciate the role that they’ve taken in advancing the conversation and bringing it back to history. There’s a tendency in political discussions about philanthropy to argue that today is the biggest it’s ever been. The truth is that foundations have been really powerful for more than a century; if you look back at some of the press from the 1920s and 1930s, there are very similar arguments being made about the influence of the Rockefellers.

All that’s old is new again. I think that what’s changed is that people today are more concerned about the size of foundations. It’s the first time in many decades we’ve seen foundations that are in excess of a billion dollars, and the growth of their assets has also grown significantly. The presence of market-based values and the influences of neoliberalism over the past 30 years is a big deal, too. People tend to get hyperbolic because there are wealthy people in tech and business who are more assertive in ways that foundations haven’t been in the past.

Your book suggests “evidenced-based” policies are often far less rigorous, and far more political, than their proponents suggest.

Right, what is evidence? I’m working on a book proposal now with [political scientist] Sarah Reckhow about teacher quality debates. We look at the new industry of advocacy research, and its influence on policy discussions. So many ideological arguments have the veneer of neutrality confirmed by the label “evidenced-based.”

We’re in the midst of a presidential election that actually has a significant focus on philanthropy. Both Clinton and Trump have foundations, and particularly the Clinton Foundation’s influence is regularly in the media. Do you see this having any import for the education philanthropy conversation?

It’s an interesting question because the broad public doesn’t really know what a foundation is, or what it does. Clinton’s foundation doesn’t make that many grants, it’s more like brokering and convening. I teach a class on philanthropy and I start by asking my class “what is the foundation you most admire?” Students will say things like the Salvation Army. Most people really conflate foundations and public charities, and there’s not a real understanding of who gives the money and who does the work on the ground. There’s a real lack of knowledge about what power these different groups have, which also carries implications for our democracy.

The national conversation around inequality has grown far more pronounced. Has this impacted the public’s focus on philanthropy?

That was fascinating for me. Literally I kept having to add things to the book as we were going to press. ESSA passed, Bernie Sanders became a real viable candidate. I think people are starting to realize that philanthropy is inextricably linked to an unequal society. You can’t have philanthropy without having some people who have a lot more than others.

 

 

Oprah Is Not Your Friend: A Q&A With Nicole Aschoff

Originally published in Dissent on August 18, 2015.
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Nicole Aschoff, the Managing Editor at Jacobin magazine, is author of The New Prophets of Capital, a book that examines the modern mythmaking central to twenty-first century capitalism. It’s a short and agitating book that aims to critically examine some of the rhetoric espoused by “new prophets” like Oprah Winfrey, Facebook COO Sheryl Sandberg, Bill and Melinda Gates, and Whole Foods CEO John Mackey.

Rachel Cohen: Your book makes the point that capitalism has always needed, and will always need stories for people to grasp on to, to “get us out of bed in the morning and remind us where we are going.” Why is this? Does socialism have its own prophets?

Nicole Aschoff: Stories, as a vehicle for norms, ideas, and morals, are important to all societies, and capitalist societies are no exception. In capitalist societies there is a disjuncture between the things we value highly—family, community, fulfillment, education, culture—and the architecture of our economy, which prioritizes profit. Stories about “creative capitalism” and positive thinking told by people like Bill Gates and Oprah Winfrey matter because they smooth over this disjuncture. They help to convince people that capitalism is the best, or only possible, way to organize society.

Just as there have always been people whose stories bolster capitalism—from Ben Franklin to John Mackey—there have also always been voices that challenge capitalism and the existing hierarchy of power. In the United States we can think about the stories told by people like Eugene V. Debs, Emma Goldman, Martin Luther King, Jr., Ella Baker, and Rachel Carson, to name a few. However, if we look at the history of the labor, civil rights, feminist, and environmental movements, the importance of collective actions and voices, rather than a few powerful prophets or hierarchical leadership structures, is striking. Successful social movements are made up of empowered, critical, ordinary people, and I think this is something to strive for.

Cohen: You explore the popularity of Whole Foods and discuss the rise of “lifestyle politics” whereby people conflate consumer choices with politics and citizenship. You acknowledge that for so many individuals, given that social change often feels incredibly elusive, there’s an aspect of empowerment that comes with modifying one’s consumer choices—like buying organic produce or going vegan. What, in your view, is wrong with this idea and what might be a better way to think about consumer action and social change?

Aschoff: It depends on what you want to get out of lifestyle politics. If your goal is to eat healthier, or simplify your life by reducing your possessions, then buying better things—if you have the money—can be quite empowering. But if your goal is to impact bigger processes, like environmental degradation or global poverty, lifestyle politics is not the answer. Companies that produce nice things like organic food or sustainable furniture are like all other companies, and must constantly expand and produce more to generate profits.

This does not mean that making better choices is useless or that we shouldn’t challenge the way things are being produced. It is simply a call for different kinds of projects. The environmental crisis is ultimately a social and political crisis that can only be solved by collective action.

Cohen: One chapter looks at the rise of “philanthrocapitalists” like the Gateses, Waltons, Broads, and Buffetts. In an era of scarce resources and shrinking government budgets, why should we be concerned about the growing influence of philanthropists?

Aschoff: Periods of increasing activity by philanthropic foundations, or these days “philanthrocapitalists,” are historically a symptom of social crisis associated with rising inequality. On the surface this might seem positive. But we can’t expect big foundations to solve inequality, or poverty, or any number of other social ills.

Foundations distract from how wealth creation works, by making it appear that philanthropists are doing people a favor out of the goodness of their hearts. This hides the fact that the wealth they have amassed was not simply the result of their own cunning or ability—it was made possible by all the people who worked for them, not to mention the public infrastructure made possible by taxpayers. By presenting themselves as do-gooders or charitable institutions, foundations erase the last four decades of aggressive lobbying for financial deregulation and tax-cuts and the concerted attacks on working people and unions by businesses and elites.

Unlike taxes, when foundations make philanthropic donations, they are choosing which projects they want to fund. These projects often have some progressive effects—poor children get vaccines when they wouldn’t otherwise. But they also often contain conservative goals—for example, the Gateses favor commoditizing health care rather than supporting universal health care, and many foundations support privatizing public education and reducing the voice of parents and teachers in how schools are run.

Whether we like foundation projects or not makes little difference because people like Bill and Melinda Gates are incredibly powerful and essentially unaccountable. We have no say over how foundation money is used, even when it impacts people’s lives profoundly.

Cohen: You note that challenging these stories about capitalism “require a fundamental rethinking of our current way of life, a prospect that evokes fears of violence and disorder, and a deeper apprehension that in the process of transforming our society, we might lose ourselves and the essence of who we are.” How do we overcome these fears?

Aschoff: Capitalism is a stressful system. People use up most of their energy just keeping their head above water, so telling them to imagine a different kind of society might seem silly or off-putting. But when we look back at U.S. history—at slavery, child labor, the oppression of women, Jim Crow, homophobia—these things didn’t get better by themselves. People fought and died to make them better, and they continue that struggle today. Capitalism is a historical development; there is nothing “natural” or inevitable about it. As renowned author Ursula Le Guin said recently: “We live in capitalism, its power seems inescapable—but then, so did the divine right of kings.” Reminding ourselves how change has happened in the past is important if we want to think seriously about creating a different kind of society.

Cohen: One chapter of your book explores Facebook CEO Sheryl Sandberg’s particular brand of feminism. Your argument, which I’ve also seen made by writers like Sarah JaffeElizabeth Stoker Bruenig, Sarah Leonard, and Tressie McMillan Cottom, suggests that Sandberg’s approach of encouraging women to “lean in” may help a small slice of elite women access power, but ultimately won’t help women at the bottom of the economic ladder. Why does it have to be an either/or discussion?

Aschoff: Nearly everyone is dependent upon wages to pay for all the things they need to survive, but those wages come directly out of the profits of the businesses they work for. The job of a head of a company—whether male or female—is to maximize profits, and one way they can do this is by paying as little as possible in wages and taxes. This means the goals of women leaders are often at odds with the needs of working-class women. Having women at the top may help in the fight against sexism and smooth the way for other women to step into leadership positions, but the idea that women leaders will implement better conditions for women more broadly has little historical precedent.

Sandberg’s manifesto aligns perfectly with the needs of capital by encouraging women to map their dreams onto the growth trajectories of corporate America. Sure, seeing women in leadership positions can be aspirational, but turning this into the mechanism for achieving feminism hides the structural barriers preventing most women from achieving security and success, while simultaneously burnishing the meritocratic façade of big business. Real feminism—the idea that everyone, regardless of gender, should get decent pay and a voice in their workplace, dignity, respect, quality healthcare and childcare, the right to higher education and housing, and a robust support network for old age, illness, or disability—is incompatible with scaling the corporate jungle gym.

Cohen: When we hear about an anti-union company announcing they will raise their minimum wage, or give more flexible commuting options, or expand their paid maternity leave, how should we be thinking about these employers and business models? In an era where everything can seem bad and getting worse, how should we be thinking about these bouts of “conscious capitalism” in the marketplace?

Aschoff: Capitalism’s overwhelming power often inspires a feeling of helplessness or despair, so it is understandable to feel hopeful when businesses make small decisions that improve people’s lives, like raising wages or improving working conditions. At the end of the day, the goal of any political movement should always be about making people’s lives better. But there is a difference between gains granted by “conscious” companies and gains that are won through struggle.

Take for example the Fight for 15. Winning $15 an hour won’t change the fact these companies exist to make a profit—they can absorb higher wage costs and continue going about their business essentially unchanged—but that certainly doesn’t mean that $15 isn’t worth fighting for. It would represent a huge change for people living in poverty. Victories like the recent one in NY are exciting, and show that not only can workers win when they fight together, but also the potential of their struggles to build solidarity and confidence that can be channeled into a much broader, democratic movement for change.