Who are Head Start’s ‘angel investors?’

The Houston-based couple who stepped in with a $10 million loan to reopen Head Start programs shuttered by the federal government shutdown are an increasingly influential force in education philanthropy.

Laura and John Arnold, who amassed wealth through the oil and hedge fund industries, helped pay for the District of Columbia’s “IMPACTplus” contracts that award high-performing teachers hefty bonuses, and they have been major supporters of Michelle Rhee’s StudentsFirst campaign and KIPP public charter schools, among many other education reform organizations.

The couple contacted the National Head Start Association last Friday with an offer to help the potentially 19,000 children and their families that had lost access to or were in danger of losing access to Head Start programs and services this month, said Sally Aman, a spokeswoman for the National Head Start Association.

“We believe that it is especially unfair that young children from underprivileged communities and working families pay the price for the legislature’s collective failures,” the couple said in a statement. “We sincerely hope that our government gets back to work in short order, as private dollars cannot in the long term replace government commitments.”

Under the agreement, if the programs receive a full year’s worth of funding when the government reopens, they can repay the loan interest-free.

Yasmina Vinci, executive director of the Alexandria-based association, which is administering the loans, said the Arnolds’ generous act “epitomizes what it means to be an angel investor.”

The Arnolds have a foundation dedicated in part to improving public education, but they made this loan from their personal accounts.

John Arnold was included in the Forbes 400 list of richest people in America, with a net worth estimated at $2.8 billion as of September 2013. The former energy trader worked for Enron before starting his own hedge fund. His wife, Laura, is an attorney and former oil executive.

He retired in 2012 at age 38, and he and his wife have since focused largely on philanthropy, according to the Forbes profile. They signed the Giving Pledge, an effort launched by Bill Gates and Warren Buffet to encourage the wealthiest people to commit to giving away the majority of their money to charitable causes.

Their foundation focuses on improving public schools, reforming the criminal justice system and improving public pension systems.

The majority of the foundation’s 2011 grants, according to the most recent 990 tax form available, went to education, including $7 million for StudentsFirst Institute, $6 million for YES Prep Public Schools, $5 million for Teach for America Inc. (plus an additional $1.1 million for Teach for America Houston), $1.6 million for the D.C. Public Education Fund, $1.1 million to the KIPP Foundation, and $2.5 million for the New Teacher Project.

A profile in the Houston Chronicle pointed out that the Arnolds “cut a different profile” in the “small world of Houston ultra-wealthy” because they are not on the political right.

John Arnold’s political contributions have heavily favored Democrats. In 2008, he donated between $50,000 and $100,000 to the Obama campaign.

Their Head Start contribution, one of a growing number of private donations helping to backfill stalled federal funding, came as a relief to many Head Start families.

“I’m thrilled that someone has stepped forward to help us,” said Dora Jones, a program director for the Cheaha Regional Head Start program based in Talledega, Ala.

Her center in central Alabama closed down at midnight Sept. 30. That meant no preschool for 800 children and no day care or social services for their parents.

On Friday, Jones and her head custodian spent the day driving around to each of her 16 Head Start centers to make sure doors and windows were locked, electrical appliances unplugged and air conditioners turned off “in case they are closed down for a while,” she said.

Jones also had to furlough more than 200 employees, and she was worried that they would not all be available to come back. “People have to take care of their families,” she said.

But, Jones said, by Wednesday, all 16 centers in six counties were open again thanks to the emergency funds.

This was welcome news to Jazmine Myers, 26, a family advocate at Head Start, who was already furloughed for two weeks this summer due to the mandatory cuts required by sequestration. During her second furlough, she said she stayed at home for most of the week with her 2-year old son, who attends one of the centers that shut down, she said.

“I don’t have money for gas, so we don’t really go anywhere,” she said Monday. By Wednesday, they were able to go back to work and school.

Michael Alison Chandler writes about schools and families in the Washington region.
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