The Washington PostDemocracy Dies in Darkness

A mega-wealthy philanthropist changes his mind about school reform and what kids really need — and Barack Obama has a surprising reaction

President Barack Obama and his education secretary, Arne Duncan, in 2009. (Jewel Samad/AFP/Getty Images)
Placeholder while article actions load

(Correction: Earlier version said Nick Hanauer is a billionaire. A spokesman said he “is close” to billionaire status but not there yet, a spokesman says.)

For years, many of the United States’ wealthiest people have poured money into school “reform” efforts that some predicted would lift generations of the poor out of poverty.

Now, one of the mega-wealthy philanthropists says he doesn’t believe it anymore. He is Nick Hanauer, a venture capitalist and entrepreneur who has been funding education initiatives for years.

This is what he says now:

“I woke up one day and realized that it is false to say that education is the principal way of distributing opportunity in this country,” he said in an interview. What will work, he said, is paying Americans a livable wage — and that is now his philanthropic focus.

And, perhaps surprisingly, his support for a $15-an-hour minimum wage has come to the attention of former president Barack Obama, who urged his Twitter followers to read a piece Hanauer wrote in the Atlantic titled “Better Schools Won’t Fix America."

What makes that surprising is that Obama called education reform “the civil rights issue of our time,” as did his education secretary, Arne Duncan (and, for that matter, a number of Republicans). Duncan repeatedly said education was the best way to lift people out of poverty — and repeated that in this 2018 piece.

Obama and Duncan pushed a strident education overhaul initiative to expand charter schools, evaluate teachers by students’ standardized test scores and adopt the Common Core State Standards, a set of math and English language-arts standards. They did not make teacher salaries or wraparound services for students a priority.

Hanauer’s revelation came after he spent a small fortune promoting charter schools and other education causes. In 2016, I published a piece in which Hanauer was mentioned, titled “A case study of how the ultra-wealthy spend millions to get what they want in school reform.” It was about an effort to allow charter schools to open in Washington state and began this way:

In 1996, 2000 and 2004, voters rejected allowing charter schools in the state. In 2012, a referendum allowing them was narrowly passed with major financial support from philanthropists such as Microsoft founder Bill Gates; Alice Walton of Walmart Stores (who, unlike Gates, doesn’t live in Washington state); entrepreneur Nicolas J. Hanauer of Seattle, with $1 million; and Jackie and Mike Bezos, about $750,000 (parents of Jeff Bezos, founder of and owner of The Washington Post).
The law was challenged by a coalition of organizations which argued that the law “improperly” diverted public school funds to organizations that are private and “not subject to local voter control.” Those groups include the Washington Education Association, the League of Women Voters of Washington, El Centro de la Raza and the Washington Association of School Administrators.
Last year, the Washington state Supreme Court ruled that the 2012 referendum was unconstitutional. It violated the state’s constitution, which explicitly says that public school funds can be used only to support “common schools.” The justices voted, 6 to 3, that charter schools — which are publicly funded but privately run — are not “common schools” because their governing boards are not elected but are appointed by the founders of the individual schools. But in March 2016, the state legislature passed a bill that would fund charter schools with state lottery revenue — and Gov. Jay Inslee, a Democrat, allowed it become law without his signature.

This was part of a larger trend in philanthropy in which the country’s wealthiest citizens for a few decades poured billions of dollars into efforts to change public education. Their reasons varied — some believed the public system was inefficient; some thought that it would lift generations of people out of poverty; others didn’t believe in the public sector. But they all managed to drive the public education agenda toward their pet projects.

Critics argued such philanthropy is fundamentally undemocratic, because it allows wealthy private individuals, who have not been elected and who are not accountable to anybody but themselves, to set a public agenda. And, in the case of school reform, they have noted that much of the money has been wasted. Microsoft founder Bill Gates, who has spent more on education philanthropy than anybody else, has conceded that his efforts have failed to produce the results he wanted.

As it turned out, their efforts dovetailed with the Obama administration, which launched a $4.3 billion education initiative called Race to the Top. It dangled federal funds in front of resource-starved states if they embraced the administration’s education priorities. Those included charter school expansion, the Common Core and revamping of teacher evaluation systems that used student standardized test scores as a measure of effectiveness — even for teachers who did not teach the subjects covered by tests. (Here’s how that worked, or, rather, didn’t.)

How is this fair? Art teacher is evaluated by students’ math standardized test scores

Gates, who worked with Duncan to push measures aimed at making public schools operate more like businesses than civic institutions, was one of the original members of this group of philanthropists. Education historian and activist Diane Ravitch dubbed it the “Billionaire Boys Club” in 2010, although it came to include women and people who weren’t quite billionaires but were mega-wealthy. These philanthropists included members of the Walton family; Eli and Edythe Broad; Mark Zuckerberg and Priscilla Chan; Michael Bloomberg; and Hanauer.

School reform efforts ignited a backlash in states as the amount of standardized testing became overwhelming and as experts warned against using the results for high-stakes purposes. Obama and Duncan conceded in 2015 that standardized testing had gone too far, while critics accused the administration of helping to “privatize” public education. Congress decided to stop what it regarded as federal micromanaging of local education issues and passed a K-12 law in late 2015 giving back power to the states.

Charter schools did not turn out to be the panacea some supporters had predicted, although Gates and other wealthy Americans continued to shower money on charters and other efforts to change public education.

Hanauer isn’t with them anymore. In his piece in the Atlantic and in an interview with me, Hanauer said that while he still supports charter schools as a “tool of innovation,” he no longer thinks education reform will accomplish what many philanthropists say it will.

“I’ve run a ton of businesses, and I can tell you from experience that if smart, hard-working people work on something for a long time and make no progress, it is wise to question the strategy,” he said in an email. “And so, with reluctance I began to question mine.”

After years of spending a lot of money on school reform, he concluded that while improving schools is important, it isn’t what the country needs most.

“There were zero charter schools when I began ‘helping’ our education system. Today, there are over 7,000,” he said. “But our country has never been more unequal, polarized and angry.”

The dissolution of the middle class, he said, “overwhelmed anything we did in schools,” even as the wealthiest Americans saw their fortunes balloon. “I realized that the idea that education reform is going to make this society more equal isn’t going to work,” he said.

Hanauer has now put his philanthropic efforts behind the initiative for a $15-an-hour minimum wage, saying that putting more money in the hands of the poor is what will drive improvement in schools and across society. For one thing, he said, it would increase what Americans can pay in local taxes to improve their schools, because schools are funded largely by local and state taxes.

“This will help kids get an education more than any other thing we can do,” he said, noting that he is the only person he knows who has “written a seven-figure check for a minimum-wage campaign.”

“Charters, or whatever magic idea you have about education reform, none of it will work in a community in poverty,” he said. “There are, of course, always exceptions, people who can escape their surroundings, but it can’t work at scale."

“I feel that someone with the resources and influence that I have should look up and see if what we are doing makes sense,” he said. “And if not, we have to change policies.”

Hanauer called Obama’s tweet “amazing.” Some Obama critics were less impressed.

Here is a detailed version, provided by Hanauer in an email, about what changed his mind:

In 2009 or thereabouts, I had an awakening. A friend sent me the IRS tax tables that showed the changes in income distribution that had occurred over the decades I had been working on education. The story those numbers told was devastating. When I graduated from high school in 1977, the top 1% of earners got less than 8% of national income. In 2007, 30 years later, that number had increased to 22.86%. Worse, the bottom 50% of American’s share of national income had fallen from approximately 18% to 12%.
I was horrified by these trends, and frankly, shocked. I had put so much work and so much faith in the Educationist theory of change, and all my work had amounted to nothing, or, if you were being brutally honest, less than nothing. Nevertheless, I was under pressure to keep grinding on the same stuff in the same way, only harder. You get a lot of strokes in the community for working on public education, and I did. I was “the education guy”. But it just didn’t feel right.
I’ve run a ton of businesses, and I can tell you from experience that if smart, hard-working people work on something for a long time and make no progress, it is wise to question the strategy. And so, with reluctance I began to question mine. There were zero charter schools when I began “helping” our education system. Today there are over 7,000. But our country has never been more unequal, polarized and angry.

Hanauer won praise from Obama but not, apparently, from everybody: