Why Annenberg’s School Plan Failed

In December 1993, when the philanthropist Walter Annenberg announced a five-year, $500-million effort to reform the nation’s public schools, few people doubted that he had made a great social investment. The self-proclaimed “Annenberg Challenge,” which sought to match the former publisher and diplo mat’s largesse with additional contributions from government, foundations, and corporations, appeared certain to improve children’s lives and America’s future.

But as the grant program nears its end, it is increasingly apparent that the effort has failed. Observers cite significant problems in several of its programs, including mismanagement, lack of effective leadership, lack of teacher commitment, staffing difficulties, poor facilities, and inflexible curricula — all of which are endemic to the public-school system. What’s more, there is no substantive sign of improvement in the area that should matter most — students’ academic performance.

If the Annenberg Challenge has failed to prompt significant school reform, there is one simple reason: Mr. Annenberg relies on the power of money to influence change in a government bureaucracy.

But, as Mr. Annenberg must now realize, providing large sums of money to a bureaucratic, inefficient education system is not going to improve student learning. Only reforms that apply external pressure on public schools, such as unfettered competition from private schools, are likely to make a difference.

While philanthropists like Mr. Annenberg and Ted Turner sink their fortunes into failing government bureaucracies, other donors and foundations should consider private, non-profit alternatives that embrace the efficiency and effectiveness of the free market.

From the outset, Mr. Annenberg, who turned 90 last month, appeared to accept the oft-repeated complaint that the public schools mostly lacked financial resources. Only two elements distinguish the Annenberg Challenge from other failed school-reform efforts: the large grants awarded by the Annenberg Foundation, and Mr. Annenberg’s success in gaining broad support by requiring matching contributions from government and private sources.

But money is not the answer. The problem runs far deeper, to the way the public-school system operates.

Instead of offering a new design for school improvement to replace failed programs or to supplement current reform efforts, the Annenberg Challenge simply increases the money flow to a system that diverts grants to serve the interests of politics and bureaucracy. Although Mr. Annenberg dictates how his money may be used, studies of Annenberg-backed programs find that some schools treat the programs as mere cash cows and ignore the higher goal of long-term improvement.

The figures clearly show that the public-school system is poorly managed. According to the National Center for Education Statistics, average per-pupil expenditures (excluding capital expenditures) in U.S. public schools increased, in constant 1995 dollars, from $2,153 in 1960 to $6,123 in 1995, without improved performance. By contrast, private schools, which tend to provide more-rigorous programs with better results, charged an average of $3,116 in 1993-94, the most recent year for which data were available. The tuition for Catholic schools was only $2,178.

Part of the problem lies in the inefficiencies of the government-run schools. Other industrial nations allocate 15 to 20 per cent of their education budgets for non-teaching personnel. By contrast, the United States allocates 25 per cent for such people. In 1993-94, only 54.5 per cent of the $231-billion spent by public schools was used for instruction.

Other problems, including budgetary and political considerations that limit schools’ autonomy, arise from trying to work within the public-school system. Some examples:

In Philadelphia, the Annenberg-financed program’s partial reliance on government funds endangered the program soon after it began, when the Board of Education decided to cut $67-million of its commitment because of its own budget woes. In addition, the Philadelphia program has had to contend with constant influence from the courts, which are handling a school-related desegregation case, and political opposition, especially from teachers’ unions.

New York City’s schools chancellor last year thwarted the Annenberg-backed effort to create smaller, experimental schools, claiming that he found the schools’ reliance on private and foundation resources to be “disturbing.”

Although Education Week’s 1998 national report card praised the infusion of cash into Detroit’s schools, it noted that taxpayer support was endangered by Michigan school districts that oppose a compromise to provide state funds for education-reform efforts while restricting future tax increases.

In short, reform has stalled and students have shown little, if any, signs of academic improvement.

The Annenberg Institute for School Reform, which was begun at Brown University in 1993 with funds from the challenge, points out several trends that it says provide cause for hope, including increased involvement in the schools at a local level by parents, educators, business executives, civic leaders, and average citizens. But on the projects’ generally poor results, both the institute and the foundation have remained largely silent. Neither publishes an annual report, and annual and comprehensive evaluations of the challenge’s progress, which were promised at the time of the program’s inception, have never been completed.

Without the evaluations — the foundation now promises one at the end of the year — no complete analysis can be made of the program’s success or failure in improving student learning.

However, the few independent studies that are available indicate that Mr. Annenberg’s $500-million gift has failed to have any significant impact on the quality of public schools.

Philanthropists who want to make their mark on America’s schools should follow instead the example of the investors Theodore Forstmann and John Walton, who each gave $3-million last year to a scholarship program for children of low-income families in Washington, D.C. At least 1,000 children will be able to receive a good education at private schools.

Patrick J. Reilly is editor of Foundation Watch, a monthly publication of the Capital Research Center, in Washington. This article is adapted from a report that appeared in last month’s issue.