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Newsmax Trumpets Terrible Idea Proffered by Blackrock Billionaire… Business Insider Blows Holes in it

February 26, 2018

Two outlets reported recently on a speech to a group of public school superintendents given by billionaire Steven Schwarzman. Newsmax, a libertarian-conservative outlet, published an short synopsis of Mr. Schwarzman’s speech titled “Billionaire Warns Public Schools Need Private Financing”. The Newsmax article, which is based on an extended piece from Business Insider, trumpets Schwarzman’s terrible idea, which is that public schools seek private funding from billionaires like him to augment their funding. Why? Because, according to Schwarzman,

“The middle class economically has shrunk,” he told B.I. “The monies aren’t there in the same way. I think we have to recognize that and figure out what to do about it.”

And things will only get worse, according to Schwarzman.

“I think the roadblocks are basically just tradition,” Schwarzman told B.I. “What I’m talking about is just typically not done.

“Sometimes in life you just have to adapt.”

But Business Insider’s article flags the problem with Mr. Schwarzman’s idea, a problem is underplayed in Newsmax:

Regardless of fortitude and determination, some districts will have more potential funds to mine than others. Not every school has an alumnus like Schwarzman, who has deep pockets and an enduring commitment to education — he has donated hundreds of millions to a variety of education causes.

Such a model has the potential to exacerbate school inequality, according to Sean Corcoran, who studies education financing issues as an a ssociate professor of economics and education policy at NYU Steinhardt.

“School districts’ reliance on private funding is slim-to-none,” Corcoran said, “but where it does exist it tends to be in wealthier communities.”

Astonishingly, Mr. Corcoran seems open to the idea of having billionaires make contributions despite the dis-equalizing impact it would have on public schools and despite the fact that the billionaire’s largesse would have the effect of setting spending priorities for publicly governed institutions. And even more astonishingly, the Superintendents in attendance were “ebullient”, giving Mr. Schwarzman a standing ovation. And no mention was made that the Abington PA school district that benefitted from Mr. Schwarzman’s largesse was one of the most affluent in PA: Abington spends more per pupil than 95% of the other districts in the State!

In the end, though, neither Mr. Corcoran nor the Abington Superintendent see the philanthropy of billionaires as a panacea.

But (Mr. Corcoran) doesn’t believe the notion represents a realistic cure for public school funding ills, and he says it would become a problem if people started treating private donations as a substitute for local tax dollars and state aid.

(Abington Superintendent) Sichel, despite her district’s recent good fortune, isn’t convinced private donations are a magic elixir or a replacement for public funding, either. She points out that Schwarzman’s gift is not a substitute for a district operating budget, which in Abington currently stands at $159 million, 28% of which comes from local funds.

“In Abington, this is not replacing an operating budget at all. This is $25 million for a targeted gift for building and renovating a high school. It’s a very targeted gift,” she said.

But, she says, to stay competitive and offer students the best programs and opportunities, public schools have to give it a try.

“This may not be a panacea, but it sure is another avenue to pursue,” she said.

Spoken like a Superintendent in a very affluent district where such an avenue exists… but having worked in both affluent and needy districts I feel it is inherently unfair for billionaires to make gifts to districts that are already well off compared to their neighbors and even “distant relatives”… especially if those gifts are “very targeted”. I am reminded of the response to a question raised at a meeting with the president of a college with a large endowment about “his decision” to spend millions on a golf shooting range in a student athletic facility. He remarked that a large gift for the overall facility was contingent on including this feature. That’s where “very targeted” donations lead.

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