The Real Estate Investor Betting on Big Returns from a Local Early Reading Program

photo: Rido/shutterstock

photo: Rido/shutterstock

Sonny Kalsi came across the education nonprofit Teaching Matters about four years ago when he asked a friend how to get more involved in philanthropy at home in New York City. Since then, the real estate investor has donated and helped raise nearly $1 million in support of the organization’s early literacy program, Early Reading Matters

Kalsi is a partner at Green Oak, a real estate investment firm he co-founded in 2010. Kalsi doesn’t have a background in education, but says he has a soft spot for kids and puppies. When it came time to give back, K-12 education seemed like a natural fit.

Kalsi grew up in Tennessee, the son of Indian immigrants. Much of his interest in giving back to education comes from the value placed on it by his family.

“In my family, education was always—my dad has a PhD—it was one of those things like, ‘Of course, you’re going to go to college,’ and, ‘Of course, you’re going to get a graduate degree’—even though I didn’t,” he said. “It was a given.”

When Kalsi first got involved in philanthropy, most of his giving supported kids and education in India. But after a while, he felt he had to do more at home.

“I’ve been in and around New York City, other than the time I spent abroad, since 1990. I kind of feel like I’m not doing a whole lot to help people here in New York City,” Kalsi said. “We know there’s a lot of poverty here in the city and a lot of opportunity to try to help people.” 

What drew Kalsi to the Early Reading Matters initiative was its results. “I’m an investor. I’m a numbers person,” he said. “The thing that really struck me about the early literacy program was how tangible the outcomes were—how measurable they were.”

It’s a response that’s become common among education philanthropists, as more research shows that when it comes to education, early investments have the best returns. A study funded by the Annie E. Casey Foundation found that kids who are behind in reading by third grade are four times less likely to graduate high school.

Kalsi is far from the only donor paying attention to those numbers. As we've reported, a number of funders—most notably the Kellogg Foundation but also newer players like the Chan Zuckerberg Initiative and the Kenneth Rainin Foundation—have focused attention on helping children read by third grade. Meanwhile, early childhood learning has become the signature cause of several big players in philanthropy, most notably J.B. Pritzker, one of the heirs to the Hyatt hotel fortune.

Kalsi isn’t the only funder in New York backing the Early Reading Matters initiative. The New York Community Trust put up $3.6 million in support of the program earlier this year, tapping a fund created through the estate of the late Brooke Astor.

Creating School-Level Change

To get kids reading by the third grade benchmark, interventions have to start earlier. Early Reading Matters works with schools to make sure that teachers of kindergarten through second grade have the skills they need to teach kids how to read.

“Teaching reading is actually incredibly complex work,” said Lynette Guastaferro, the nonprofit’s CEO. “It’s one of the most difficult things you can do in education.”

“We’re targeting one of the most important skills and one of the biggest deficit gaps in teacher knowledge, which is the teaching of reading, which is really, really hard to do,” she said.  “In kindergarten, first and second grade, there’s a real gap in high-needs neighborhoods around teachers’ skills and knowledge around how to teach reading.”

Public schools in low-income neighborhoods are hit hardest by the literacy knowledge gap because they get stuck with more than their fair share of new teachers.

“In education, people learn how to teach by teaching. We have a system where teachers come out of ed school. They’ve had one course in reading.” Guastaferro said.  “They learn to teach on our poorest children, often in the highest-need neighborhoods, and improve over time, ideally.”

“But our kids have one shot. We have too many kids who are being taught by people who do not actually have sufficient knowledge and training in how to teach reading, the science of reading and the practices of reading.” 

To solve the problem, Teaching Matters focuses on school-level change. The nonprofit provides literacy coaches to schools for three years. The goal is to foster a school-wide approach that ensures that not only does every kindergarten, first and second grade teacher understand key practices they need to teach reading, but teachers also learn how to support each other and any new teacher that joins.

The initiative placed literacy coaches in 31 elementary schools in the Bronx. The nonprofit says that since starting the program, schools have experienced a 50 percent increase in kids reading at grade level by second grade.

Guastaferro understands firsthand the challenges teachers face. She started her career as a consultant at PricewaterhouseCoopers, but left to become a teacher after the firm started working with school districts.

“I just kept meeting individual teachers who I thought were excellent. I really couldn’t get my head around what the underlying problem was,” she said. “So I decided to actually become a teacher, sort of go in and understand the problem from the ground up.”

When Guastaferro started, she realized what a big part of the problem was. “I had this incredible experience where, in my first month or two on the job, I had no access to a copy machine,” she said. “I had no curriculum.”

In other words, teachers often lacked the support, structures and resources they needed to be effective. This realization is what pushed Guastaferro to focus Teaching Matters on the school level instead of targeting individual teachers.

She says it’s a lesson that’s starting to sink in for institutional philanthropy. Funders were right in identifying teachers as the most important in-school factor in determining student outcomes, Guastaferro said, but focused too much on individual teachers, while ignoring the environments where they worked.

“If you have a school that has many, many, many ineffectual teachers, it’s because they’ve been in the desert where there’s been no leadership and there’ve been no systems and supports,” she said.

For decades, philanthropic money poured into schools, funding programs to hold teachers accountable. Education reformers have little to show for their efforts. For a recent, high-profile example of the failure of this method, look no further than the Intensive Partnerships for Effective Teaching initiative backed by the Gates Foundation.

The $575 million initiative pushed schools to tie teacher evaluations to student test scores. In the seven years that it ran, the program failed to improve student graduation rates, the effectiveness of teachers, or retention of the most effective teachers.

Related: It's One of the Biggest Failures Yet in K-12 Philanthropy. What Are the Lessons?

Funders seem to be catching on. Bill Gates said last year that the foundation would stop directly funding teacher evaluation. Meanwhile, newer funders, like the Chan Zuckerberg Initiative, seem less interested in the punitive approaches long popular with reformers. CZI, for one, put out several grants earlier this year backing work on teachers’ mental and emotional well-being.

Guastaferro says focusing on making sure teachers are effective is the right call. But interventions should focus on the school, its structures, systems, and leadership to make sure teachers have the tools and support they need to be effective.

“We definitely have to support talent. There are teachers who are not bad. There are teachers who are completely unsupported and on their own. There are also teachers that are ineffective, don’t get me wrong, but you can’t fire your way to school excellence,” she said. “In my experience, excellent schools attract excellent teachers.”

Finding Investors

While her time as a teacher drives how Guastaferro approaches her work at Teaching Matters, it’s her time in business that jumped out to Kalsi. “Teaching Matters is top of the list in my mind of all the places I’ve been involved with. It’s well run; it’s well organized,” he said.

“You have to find people who are passionate about the cause, but also finding people who know how to run an organization is really important,” Kalsi said. “Because there are a lot of people out there who are trying to do a lot of good, but not everyone is really good at it.”

It’s one of the reasons that Kalsi introduced many of his friends to the organization. His tactics include events that raise money for the nonprofit, matching campaigns, school visits and informal conversations with interested friends.

The nonprofit is funded through a combination of public money, foundation dollars and donations from private individuals. Blending the three sources is key to Teaching Matters’ ability to survive and scale, Guastaferro says.

For Early Learning Matters, about 70 percent of the funding came from foundations, while 10 to 15 percent came from schools and public funding. The remainder came from individual donors like Kalsi.

For Guastaferro, school visits are a key tool to win over the third funding stream—individual donors like Kalsi and his friends. In a small way, visits recreate the experience she had as a teacher and the realizations that came with it.

“I think there’s a lot of misinformation about the inside of public schools and who’s in them,” she said. “It’s really important that people go and see the schools.”

“They see how hard folks are working in urban schools and what they’re trying to do. And meet the kids and realize these kids are our kids.”