Beyond the Holy Grail: Private Innovation, Public Funding, and What Comes Next

In 2005, just as I was settling into my new role as president of Communities In Schools (CIS), a nonprofit that aims to reduce dropout rates through community engagement, a book of essays came out that helped clarify my thinking about the role of private money in public education. With the Best of Intentions: How Philanthropy Is Reshaping K-12 Education was by turns constructive and combative, insightful and infuriating.

Those adjectives could apply to any essay in the book, but perhaps none more than “Buckets into the Sea: Why Philanthropy Isn't Changing Schools, and How It Could” by Jay P. Greene, head of the Department of Education Reform at the University of Arkansas. Though Greene focused specifically on philanthropy, I found his central insight also applied to nonprofits like CIS that contributed to improving public education on behalf of underserved students.

Greene’s message was not encouraging for any would-be social innovator. “Trying to reshape education with private philanthropy is like trying to reshape the ocean with buckets of water,” he wrote, explaining why $1.5 billion in private investment would have no lasting impact on a public education system that spent some $428 billion a year. (Since then, the gap has grown even wider, with public spending of more than $600 billion and private investment north of $1 billion.)

But Greene also offered a ray of hope: By investing in “high-leverage” strategies, including research and advocacy, organizations like CIS might be able to harness the power of the ocean by changing the way that public dollars are invested. A dozen years ago, that seemed like a wildly ambitious goal to me, because CIS essentially had been in “pilot” mode for its entire existence. We knew anecdotally that we could raise graduation rates by putting caring adults inside schools to help at-risk youth with non-academic needs, but different affiliates in our national network went about the task in various ways, with varying degrees of success.

My four previous years as executive vice president at CIS had convinced me that our network had enough experience and insight to develop a formalized model for our work, which I began calling “integrated student supports,” or ISS. If I had a single driving ambition, it was to build an understanding of what a scalable ISS model would look like, and then back it up with an evidence base worthy of public investment. With the help of several visionary philanthropic partners, we spent millions of dollars building internal performance management and research capabilities, and opened ourselves up to third-party evaluators. We were very intentional about becoming “a learning organization”—gathering data, analyzing results, iterating the model, and then starting the process all over again.

Cindy Torres, a site coordinator with the Communities In Schools affiliate in South Central Texas works with students at Church Hill Middle School. (Photo by Laura McKenzie)

The process wasn’t always smooth. We lost numerous affiliates along the way, who objected to our voracious appetite for data and transparent assessment of what worked and what didn’t. But year by year and study by study, the numbers guided and encouraged us; it was clear that we were onto something, with self-reported graduation rates consistently topping 90 percent among our toughest, case-managed students. After 13 third-party evaluations, we also had a substantial and compelling body of evidence that ISS could mitigate the effects of poverty on K-12 students, resulting in lower dropout rates and improved graduation rates. With increasing conviction and supporting evidence, we began telling that story to lawmakers and education experts, and the more evidence we offered, the more closely they listened.

Last December, a decade’s worth of high-leverage investment paid off when Congress passed the Every Student Succeeds Act, which specifies ISS as an evidence-based intervention eligible for some $15 billion in funding under Title I, the federal program designed to promote academic achievement among low-income students

Writing the Next Chapter

Many will question the political leanings of Jay P. Greene, but as a purely practical matter, the CIS experience would seem to validate his theory of leveraging private investment in public education:

[Research and advocacy] efforts are higher leverage because they attempt to inform policymakers and practitioners about effective reforms so that those reforms can be adopted and funded with public dollars … The benefit of persuading policymakers to adopt a particular reform is that the change can occur across many schools and for a very long time, all funded with public dollars.

Our case was a textbook example of that theory in action. Through significant investments in research and evaluation, we iterated and refined our model, took it to scale, and used our evidence to convince policymakers that it was worthy of public investment.

Unfortunately, that’s where the “textbook” ends, and I’m not sure anyone knows what happens in the next chapter. The question now is: Once we elevate a private innovation to the public sector, can we maintain the integrity of the model amidst a new array of political and fiscal pressures? ISS will provide an interesting case study. With federal funding now available, every superintendent and Title I director can decide whether to deliver ISS with existing personnel or to partner with outside, evidence-based providers. Either option comes with its own set of hazards.

Under constant financial pressure, many school districts will be inclined to provide ISS “in house” by naming a guidance counselor or administrator as the new expert and using federal funds to pay that person’s salary. Nothing about the model is inherently antithetical to such an approach; with the proper training, supervision, and data-driven decision-making support, any caring adult should be able to deliver ISS, regardless of employment status.

Under option two, a school district would partner with an outside, evidence-based provider to place trained ISS professionals inside the schools, allowing existing personnel to focus on their core duties. This is the approach that CIS pioneered almost 40 years ago, but not every partnership through the years proved equally successful. Only when our local affiliates clearly articulated the necessary training, supervision, and decision-making did we begin to see consistent, replicable increases in graduation rates.

No matter how a school district chooses to implement the ISS model, success will depend on quality implementation—exactly the kind of “overhead” expenses that are difficult to sustain under public funding. For districts that take an in-house approach, the temptation will be to allocate every available dollar for salaries. For districts that opt for a third-party provider, it will be to insist on contracts that artificially suppress the overhead rate for their nonprofit partners.

We know from our external studies that quality implementation of the ISS model results in higher graduation rates and lower dropout rates. But overhead costs are baked into the proven model, and if you change the recipe by skimping on training, supervision, and data-driven decision-making, the results simply won’t live up to expectations.

This situation is not unique to CIS. In fact, I believe it represents one of the major challenges facing the entire nonprofit and philanthropic sector—moving from private innovation to public implementation without any degradation in outcomes. A wing and a prayer won’t do the trick; we need a whole new set of structures and processes focused on communication, education, contract standards, and more.

Individual nonprofits can only do so much in this regard. It will take intentionality and investment by the sector as a whole to ensure that public funding is not a pyrrhic victory for social innovators. Fostering that sort of focus will be one of my top priorities as I make the move to lead Independent Sector after 17 years at CIS. It’s a new chapter for me, and any blank page is always a little scary. But this is something that we need to get right, and I look forward to the contributions of many “coauthors” as we figure out how to successfully transition the best private innovations into the public sector.

Read more stories by Dan Cardinali.